Gates: Reinvest defense savings in weapons systems
A Pentagon plan to reduce spending on civilian contractors could free up more than $10 billion in the next four years, according to Defense Secretary Robert M. Gates, who wants the savings to be spent on new ships, fighters and other weapons systems rather than on reducing the federal budget deficit.
The internal Pentagon savings estimate, disclosed by Gates in an interview, represents a small slice of the overall defense budget, but it is a big part of his effort to find savings and to stave off calls in Congress for deep cuts in military spending to reduce the deficit.
By going after civilian contractors, Gates is targeting one of the symbols of the Pentagon’s massive expansion since 2001 — the private companies that in many cases have lucrative, open-ended contracts to provide the military with such basic requirements as food, fuel and transportation, and more sensitive needs such as intelligence analysis and security guards.
“In three years, there will be 70% as much money [for support contracts] as there is today,” Gates said, adding that his goal was to reduce the number of contractor personnel from the current 39% of the Pentagon’s civilian workforce to 26%, where it was in 2000.
But much about Gates’ effort remains unclear, including which specific contracts and companies would be targeted or whether the effort will be blocked by members of Congress defending companies in their home districts.
The plan, announced by Gates last week, mandates a 10% annual reduction over the next three years in contract spending. He is leaving it up to the military services and the Pentagon bureaucracy to choose which contracts will be terminated or reduced.
In addition to the $10 billion from contracting cutbacks, Gates said he would find another $10 billion by eliminating overhead and duplication. He is also counting on the military services and other Pentagon components to come up with an additional $80 billion, for a total of $100 billion in savings over the next five years.
Amid growing signs that even some conservative Republicans are looking to the defense budget for deficit reductions, Gates has launched a public relations blitz this month to show that the Pentagon is eliminating duplication and waste, and that it would be unwise to further trim the Pentagon budget, which is likely to top $700 billion this year.
With a war underway in Afghanistan and one winding down in Iraq, as well as threats from Iran, North Korea and other potential adversaries, Gates argues that the Pentagon budget needs to grow by more than 3% annually, a level he says he can reach by 1% annual growth in the Pentagon budget combined with $100 billion in belt-tightening by the Pentagon over the next five years.
“What I am trying to do is to get control of our spending and to be much more disciplined in how we spend the taxpayers’ dollars,” Gates said, and “to make the case credibly that in the very dangerous world we face today and are going to face in the years to come, it would be a terrible mistake to look to the Defense Department to solve the deficit problem.”
Whether Gates can achieve the savings remains unclear, as does his ability to protect the Defense budget from deficit reduction efforts that are gathering steam in Congress.
Gates said he had President Obama’s support for the annual 1% increase for the next five years. But the White House is under growing pressure to address the deficit, and Gates acknowledges that he does not know how hard the White House will fight for the increase.
“We haven’t had that conversation yet,” Gates said when asked whether Obama was prepared not just to support an additional 1% increase in defense spending but to use his veto if defense spending bills do not meet this goal.
Nor is it clear that the savings within the Pentagon budget that Gates is seeking can be achieved, or whether Gates will be around to make sure the five-year effort is completed. He has committed to staying in his position only through early 2011.
Gates, who is on a two-day visit to California, acknowledged that achieving the savings targets will require eliminating whole programs and potentially even some weapons systems.
But as an inducement, he has promised to plow whatever savings the Army, Air Force, Navy and Marines find back into their budgets to help pay for additional ships, planes and tanks.
“Let’s say I could add a billion or a billion and a half a year to the shipbuilding budget,” Gates said. “That’s not too bad.”