Outgoing Defense Secretary Robert Gates said yesterday that he expects Pentagon officials to find additional savings from acquisition programs and through contractual changes with industry.
During his final congressional hearing before his upcoming retirement, Gates acknowledged to the Senate Appropriations Committee (SAC) that the results of his recent “efficiencies” drive, which some lawmakers are questioning, were “mixed.”
“While the services leaned forward and found nearly $100 billion in efficiency savings, efforts to trim overhead costs of (Department of Defense) DoD, components outside the military services were not as successful,” he said. “I believe there are more savings to be found by culling more overhead and better accounting for, and thus better managing, the funds and people we have.”
Still, Gates said efficiencies efforts will “not come close” to yielding the $400 billion in security savings President Barack Obama wants by 2023.
Gates said realizing those savings will require “real cuts” and “real choices.” He reiterated his warning against meeting savings targets by taking a percentage off the top of every part of the budget, which he said “results in a hollowing out of the force from a lack of proper training, maintenance and equipment, and manpower.”
“I’d rather have a smaller, superbly capable military than a larger, hollow, less capable one,” he told the SAC.
Gates said the Pentagon is looking at four ways to come up with $400 billion in reductions by 2023, with the first being looking “for additional efficiencies and changes in bureaucratic expenditures and the way we go about our business and the way we do business on a day-to-day basis.”
“We think there is still more money to be extracted out of overhead, but also in negotiating contracts on acquisitions and so on,” he said.
Another way the Pentagon hopes to identify the $400 billion in savings is by “looking for marginal missions and marginal capabilities that can be eliminated,” he said.
“This would be in situations where perhaps two services have comparable capabilities, and we can get by by having that capability in just one service, or there may be missions that we can set aside,” he said.
The third way the Pentagon hopes to find the $400 billion is through the comprehensive review of the Pentagon just getting underway now that is looking at options for reducing force structure.
The Pentagon, under Gates’ successor, also will look at politically tricky ways to save money, including reconsidering working-age-retiree healthcare and retirement compensation.
Gates and Chairman of the Joint Chiefs of Staff Adm. Michael Mullen, who also is retiring this year, testified before the SAC about the Pentagon’s fiscal year 2012 budget. The Obama administration requested a $553 billion base budget and $117.8 billion in war funding for the fiscal year that begins Oct. 1.
The House Appropriations Committee approved on Tuesday its version of the FY ’12 defense appropriations bill, cutting monies from the Pentagon’s base-budget request but boosting war funding.
Gates told the SAC yesterday that the cost of the Afghanistan war “is coming down dramatically.” The war budget, for “overseas contingency operations,” will likely drop by “several tens of billions of dollars” between FY ’12 and FY ’13, he said. The Pentagon has not estimated war costs for FY ’13 beyond putting in budget documents a placeholder figure of $50 billion that is not considered to be accurate.
Obama nominated Central Intelligence Agency Director Leon Panetta to replace Gates. The Senate Armed Services Committee approved Panetta’s nomination Tuesday, and a full Senate confirmation vote is expected soon.