In this eye-opening episode of Budget Watchdog All Federal, host Steve Ellis sits down with TCS Policy Analyst Gabe Murphy to dissect President Trump’s recent executive order on “Modernizing Defense Acquisitions.” Despite promising language about cutting Pentagon waste, Murphy reveals how this order actually undermines transparency and accountability. The conversation exposes the stunning contrast between rhetoric and reality: while the Pentagon struggles to identify even $80 million in waste from its $850 billion budget, the administration simultaneously pushes for a trillion-dollar defense budget. Ellis and Murphy break down the alarming expansion of “commercial solutions” designation, problematic weapons systems like the F-35 fighter and Sentinel ICBM, and the parallel assault on acquisition regulations. This essential episode offers taxpayers a clear-eyed view of how the Pentagon’s wasteful spending persists despite promises of reform.

Transcript

Announcer:

Welcome to Budget Watchdog All Federal, the podcast dedicated to making sense of the budget spending and tax issues facing the nation. Cut through the partisan rhetoric and talking points for the facts about what’s being talked about, bandied about and pushed to Washington, brought to you by taxpayers for common sense. And now the host of Budget Watchdog AF TCS President Steve Ellis.

Steve Ellis:

Welcome to All American Taxpayers Seeking Common Sense. You’ve made it to the right place for 30 years. TCS that’s taxpayers for common sense, has served as an independent nonpartisan budget watchdog group based in Washington DC We believe in fiscal policy for America that is based on facts. We believe in transparency and accountability because no matter where you are in the political spectrum, no one wants to see their tax dollars wasted. It’s April, 2025 and dear podcast listeners, earlier this month, president Trump issued an executive order titled Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base. This order is the latest in a series of promises from the administration to cut Pentagon waste, but how much substance is there behind the rhetoric here? To help me pull all this into context is Gabe Murphy, TCS policy analyst and author of a recent op-ed in the Hill that examines this executive order. Gabe, thanks for having me, Steve. So Gabe, let’s start with the basics. What exactly does this executive order claim to do?

Gabe Murphy:

Well, Steve, this executive order requires the Pentagon to complete a comprehensive review within 90 days of all major defense acquisition programs. The key part that’s getting a lot of attention is that any program more than 15% over budget or behind schedule based on the current acquisition baseline or unable to meet key performance parameters or unaligned with the Secretary of Defense’s mission priorities, all of those could be considered for potential cancellation.

Steve Ellis:

All right. How significant is that? How many programs might fall into these categories?

Gabe Murphy:

It’s a stunning number actually, Steve. I mean, the list could include programs such as the Sentinel ICBM, the F 35 Constellation Class frigate, and many more programs that fail to meet their cost schedule or performance goals. And under normal circumstances, this would be caused for celebration as the current system for addressing over-budget weapon systems is woefully inadequate.

Steve Ellis:

You mentioned the current system being woefully inadequate. Tell our budget watchdog faithful about that. Isn’t there already a process for handling programs that go over budget?

Gabe Murphy:

Yes. So Congress passed the NUN McCurdy Act back in the 1980s, and it basically requires the Pentagon to review major programs that are significantly over budget. But the requirement has unfortunately become a little more than a box checking exercise. And the latest example of this was when the Pentagon realized that the Sentinel Intercontinental ballistic missile nuclear weapon was 37% over budget. NUR Act required that Congress be informed by the Pentagon about that cost overrun and review the program and then either cancel it or restructure it and certify it to move forward. And so last July, the Pentagon did clear it to continue, but not before admitting that the restructured program would actually come in 81% over budget.

Steve Ellis:

So they basically said, yes, it’s way over budget and guess what? It’s going to be even more over budget, but we’re going to continue to do it anyway. Not exactly what the Nun McCurdy Act named for. Senator Sam Nun of Georgia and Congressman Dave McCurdy of Oklahoma was designed to do

Gabe Murphy:

Exactly. And unfortunately, despite the seemingly promising language in this executive order, I really don’t believe President Trump is serious about cutting Pentagon waste. The Pentagon budget currently sets at about $850 billion. Yet after Doge took its first swing at waste in the budget, all it had to offer was $80 million in potential cuts at the Pentagon. And as of April 20th, the most recent update from Doge, the Department of Defense ranks 13th in its estimate of agency savings despite being number one in discretionary spending.

Steve Ellis:

So we’re looking at in 850 billion Pentagon budget and they found 80 million in cuts initially. That’s less than 100th of 1%.

Gabe Murphy:

That’s right, Steven. I should caveat this between when we pitched this op-ed and when it was published, secretary of Defense, Pete Haggett issued a memo claiming to have saved $4 billion through the cancellation of a number of Pentagon contracts for IT services in favor of shifting those responsibilities to Pentagon employees. And that’s something we theoretically could support moving away from private contractors, which typically cost more than government employees, and it could theoretically lead to some meaningful savings, but it also needs some context and a heavy dose of salt.

Steve Ellis:

Alright, let me get my salt

Gabe Murphy:

Shaker. So for one, the memo is only a page long and doesn’t actually name the canceled contracts. The estimated savings of $4 billion represent less than half a percent of the current Pentagon budget and they also may be exaggerated. Exaggerated. How so? Well, many contracts contain provisions that require the government to pay out a certain amount if the contract is canceled, essentially cancellation fees. So we may end up paying some of the costs for services will no longer be getting. Also, the federal government pays in arrears, meaning the contractors don’t get paid until after their work is done. So we may still be on the hook for some of their work. Alright. Speaking of work, how is this work actually going to be done?

Right. I mean, theoretically these are contracts that we’re serving a purpose. So this memo does not address the cost of shifting these services to the Pentagon’s workforce, which is clearly a problem in terms of identifying actual savings. And then lastly, I would just say that while this is the kind of thing that we think the Pentagon should be looking at doing more work in-house where possible to reduce costs, the memo explicitly says that savings will be reallocated to quote our mission critical priorities to revive the warrior ethos, rebuild the military and reestablish deterrence. So this is not a cut, it’s simply a reshuffling of funds. Exactly. And if those funds are put towards wasteful projects like President Trump’s Golden Dome for instance, then this really should not be read as a cut of Pentagon waste. But it is an opportunity

Steve Ellis:

For Secretary Hegseth to say warrior ethos. Again. I think he really likes that word. Alright. It’s fair to say that the administration is not actually taking on Pentagon waste in a meaningful way,

Gabe Murphy:

Right? Yeah, I’d say it’s more than fair. In fact, further evidence is all over the place. If you look at President Trump, he recently called for a trillion dollar Pentagon budget for fiscal year 2026. That’s a 17% increase. And he’s also warmly embraced these proposals from Congress to add anywhere from a hundred to 150 billion to the Pentagon budget through reconciliation. The a hundred billion was the house number initially and the 150 was the Senate. But now the House is actually saying that they’re good with the 150 numbers. So they’re looking at potentially because the Pentagon budget says that 850 billion, if they get both the reconciliation money and the increase, that could be an extra 300 billion for the Pentagon that they’re talking about.

Steve Ellis:

Yeah, it’s pretty hard to tackle waste at the Pentagon when you’re talking about pumping hundreds of billions of dollars more into the agency that can’t pass an audit. Alright, let’s turn back to this executive order. Beyond the review of major acquisition programs, what else does the EO call for?

Gabe Murphy:

Right. Well, section three caught my eye. It calls for utilization of existing authorities to expedite acquisitions throughout the defense department, and this includes preference for commercial solutions, general preference for other transaction authorities, the application of rapid capabilities, office policies and policies from the adaptive acquisition framework. All of this is basically code for less transparency and less accountability.

Steve Ellis:

Alright. So what exactly does commercial solutions mean in Pentagon speak?

Gabe Murphy:

Well, over the years, Congress has significantly expanded the definition of commercial products and services to the benefit of Pentagon contractors. The commercial designation effectively exempts contractors from sharing certified cost and pricing data with the Pentagon, which is really the only effective means the Pentagon has for assessing the true cost of products and services it buys. Alright, we’ll break it down. What

Steve Ellis:

Is the practical impact of

Gabe Murphy:

That? Well, as a result, contractors have been able to overcharge the Pentagon for supposedly commercial products by resting on the premise that these products are competitively priced. But in reality, because this definition has been stretched by Congress so far, many of these products aren’t available to the public and actually aren’t used in commercial settings. So these claims that these products are competitively priced are highly dubious and impossible to verify given the lack of a requirement for certified costs and pricing data.

Steve Ellis:

So in TCS speak, expanding the pentagon’s reliance on these so-called commercial solutions would lead to even more waste,

Gabe Murphy:

Not

Steve Ellis:

Less

Gabe Murphy:

Exactly, Steve. It will lead to more overpriced contracts and absolutely more waste. I should also mention that since my op-ed came out, there was another executive order. This one was called Restoring Common Sense to Federal Procurement. Now we know a thing or two about common sense budgeting practices over here at TCS, and this is not one of them. It would basically gut the federal acquisition regulation or far a set of rules about how the federal government buys goods and services. And specifically it aims to remove any rules that are not required by law to sunset other rules within four years unless they’re renewed and to rewrite the rest of the rules in simpler verbiage,

Steve Ellis:

This isn’t the only ill advised attack on

Gabe Murphy:

Far under the guise of reform, right? That’s right, Steve. We might take some cold comfort in noting that the EO does not target rules that are required by law, but there’s also a parallel effort in Congress. Senate Armed Services Committee chair Roger Wicker’s Forged Act would repeal many of the laws that require these regulations. So taken together between the Forged Act and this executive order, this represents a fullthroated assault on regulations meant to prevent the federal government from overpaying for contracts and services and squandering taxpayer dollars.

Steve Ellis:

Well, as somebody who actually worked as a contracting officer’s technical representative when I was in the Coast Guard in an acquisition, there are some reforms that could be done to far that would make it easier to understand, easier to comply and to get a better result for taxpayers.

Gabe Murphy:

Yeah, of course. I mean, look, there are legitimate concerns within the industry and in Congress around ensuring that contracts are competitive, which is very important, and ensuring smaller businesses are actually able to compete. So targeted thoughtful fixes to the far could address some of that, but that’s really not what this is about. This is about giving the military industry free reign to rip off the Pentagon by gutting regulations that prevent that kind of abuse. Wow, that sounds like another exciting

Steve Ellis:

Episode of Budget Watchdog af Far Reform. Alright, just joking. It’s a very serious issue. I get it. We spend upwards of 800 billion a year across the federal government on goods and services and the far regulates that, but the hits just keep on coming. Alright, let’s take a step back and talk about some of the specific programs you mentioned earlier. Why should the Sentinel ICBM replacement and the F 35 be considered for

Gabe Murphy:

Cuts? Well, the Sentinel is the replacement program for the ground-based portion of our nuclear arsenal. But the whole land-based leg of the triad is frankly outdated and obsolete given technological advancements. The Sentinel offers no meaningful capabilities that are not covered by our nation’s nuclear bombers and sub marines, and it’s going to cost over 325 billion over the course of its lifecycle.

Steve Ellis:

So that’s the sentinel. And let’s go to everyone’s failing fighter, the F 35.

Gabe Murphy:

The F 35 is only fully mission capable 30% of the time. That means only 30% of the time can it fly and perform all of its missions. It’s outperformed by some of its predecessors as well because it was built to take on too many missions. So the A 10, for instance, is far better at close air support than the F 35. Beyond that, it’s also projected to cost $2 trillion over the course of its lifecycle. So if this executive order that calls for potential cuts actually leads to cuts to these programs, and frankly that’s a big if that would be a welcome development. But even if it does, if these funds are just redirected to other wasteful programs, that’s not really a win in my book, and they managed to make a bonfire out of the federal acquisition regulation in the interim, then I think yesterday’s waste is going to look quaint compared to tomorrow’s.

Steve Ellis:

So you talked about how Congress’s role in potentially harmful deregulation. What about the other side of this? What can Congress do to actually take on Pentagon waste in ways that the Trump administration just isn’t?

Gabe Murphy:

It’s a good question, and if lawmakers want to make good on the president’s so far hollow promise to cut Pentagon waste, then they can cut funding and future budgets for the over budget underperforming programs we’ve been discussing, the F 35, the Sentinel, and many others, they can also bring more scrutiny and skepticism to funding requests for emerging technologies. Look, AI is here to stay, but we have to be really thoughtful about the technologies that we’re throwing money at right now and make sure that there is some strong oversight. They can also strengthen the Numa Curdy Act. Really, the first step would be requiring Congress to vote on programs experiencing critical cost overruns rather than just letting the Pentagon Recertify programs whenever they want. And perhaps most importantly, they can reject proposals to dramatically increase the Pentagon’s top line budget, whether that’s in reconciliation or considering the president’s trillion dollar FY 26 Pentagon budget request. Gabe Murphy, thank you for joining me

Steve Ellis:

On Budget Watchdog All Federal. Thanks for having me, Steve. Well, there you have a podcast listeners. When it comes to cutting Pentagon waste, we need more than just executive orders. We need genuine accountability and oversight. This is the frequency market on your dial, subscribe and share and know this taxpayers for common sense has your back America. We read the bills, monitor the earmarks, and highlight those wasteful programs that poorly spent our money and shift long-term risk to taxpayers. We’ll be back with the new episode soon. I hope you’ll meet us right here to learn.