Fiscal Commission Defense Cuts: Strong Start, More Can be Done

Nov 12, 2010 | 6 min read | Print Article

The draft recommendations released this week by the co-chairs of the National Commission on Fiscal Responsibility and Reform propose options for saving $100 billion from the defense budget by FY2015. This puts defense on parity with non-defense discretionary spending cuts, which also received a $100 billion trim—appropriate since defense accounts for nearly 56 percent of the discretionary budget. Many of the cuts echo those advocated by TCS for a long time. Here’s our take on the defense spending recommendations, along with links to resources for more information.

Apply the overhead savings Secretary Gates has promised to debt reduction.

Since Gates introduced his plans for saving $100 billion through “efficiency” reforms last spring, we have argued that money should go back to the taxpayers rather than maintaining the one to two percent defense budget growth that Gates wants. The base budget has more than doubled over the past decade and trillions more gone to war funding, much of it used for equipment and upgrades, so DOD has plenty to work with. Besides, we’re still not convinced that Gates’ reforms will result in the kinds of savings he promised.

Freeze salaries for DOD civilian and non-combatant military workforces.

Taxpayers across the country have seen their wages stall or drop (or disappear), and government must sacrifice as well.

Double Secretary Gates’ cuts to defense contracting.

Gates is right to trim contractors who provide vague support services to the Pentagon, but there’s more places to cut contractors that perform duplicative or unneeded functions.

Reduce procurement by 15 percent

These are the cuts that will prompt the most howls from parties with stakes in the game, such as defense companies and members of Congress with major facilities in their districts. But the six weapons marked for termination, including the Expeditionary Fighting Vehicle, V-22 Osprey and the Marines’ vertical-landing version of the Joint Strike Fighter, have long sat on the endangered list. The cuts to the Army’s tactical vehicle program are in fact delays that will save money by getting the requirements right. We would also delay the contract bid on the Air Force’s refueling tanker until the next-generation planes come on line, potentially saving taxpayers billions in future maintenance and parts. And shrinking our nuclear arsenal would allow us to eliminate delivery platforms such as submarines and missiles that would save more than $10 billion per year.

Reduce planned levels for “other procurement.”

This part of the military budget, a hodgepodge of smaller items such as radios and night-vision goggles, is a major repository of earmarks. We believe the commission when they note that extra wartime spending has resulted in a “buildup of inventory.”

Cut military personnel at bases in Europe and Asia by one-third.

Reductions along these lines have been discussed for years, most recently by former Defense Secretary Donald Rumsfeld and National Security Adviser Jim Jones.

Modernize Tricare, DOD health.

Gates said recently that health care costs were “eating the military alive.” The fact that the current system is unsustainable is no secret: Several studies and panels have proposed remedies in recent years, and this option is actually one of the milder ones.

Replace military personnel performing commercial activities with civilians.

While contractors are not always cheaper than government employees, military personnel are significantly more expensive than the average government worker, so should perform military functions as much as possible.

Reduce spending on Research, Development, Test & Evaluation by 10 percent.

This is another part of the military budget that has swelled with politically-directed dollars over the years in the form of earmarks and other new funding for often esoteric technologies. It is also the location of a large amount of the funding for missile defense and space, two accounts we think the Commission should have looked at further. The Congressional Budget Office estimates that simply freezing new missile defense program development until current systems are proven would save $1.2 billion per year of precious taxpayer dollars. And curtailing the mega-satellites many experts say are out-of-date before even getting off the ground could save $4 billion over the next five years.

Reduce spending on maintenance and other operations

This includes reductions in base support, facilities maintenance, retail activities such as grocery and PX stores and DOD-run schools. Independent reports by organizations including the Government Accountability Office show there’s lots of waste here.

The authors of the report deserve kudos for resisting calls to exempt defense spending from fiscal discipline. Although the commission steered clear of any recommendations that would reflect decisions on national security strategy, we must emphasize that achieving true fiscal accountability means incorporating it into every step of the defense budgeting process, from making DOD pass an audit to including resource considerations in defense strategy planning.