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The Pentagon’s Budget Sky Isn’t Falling

Posted by John Grady on


The weeping and gnashing of teeth – that so descriptive phrase from the New Testament — is the end-of-days tone that grips the Congress, Defense Department and defense industry every time there is a change in strategic direction.

Coffee mugs with program names on them are being considered for endangered species status.

You can take the apocalyptic clamor all the way back to Dwight David Eisenhower’s 1953 “New Look” strategy, unveiled only five years after the department was created, the Central Intelligence Agency was born and the Air Force took wing from the Army.

The “New Look” threatened the thermonuclear annihilation of our enemies (read the Soviet Union and maybe “Red China,” but not in Korea where we were then fighting them) and using the CIA to overthrow regimes we thought dangerous — a Guatemalan leftist government (buying guns from the Czechs and seizing United Fruit holdings) and Mohammed Mossadegh’s government in Iran (with a little help from the shah).

Simply put, a conventional well-equipped and well-trained Army kept at 3.5 million by the draft to fight in Korea and protect the Fulda Gap in 1953 and a conventional Navy of aging battleships and their escorts and leftover World War II aircraft carriers and their escorts, plus prop planes, a few jets and helicopters, were too costly to sustain. The Truman administration had already taken the Marine Corps down from 475,000 in 1945 to 75,000 in 1950.

AS NATO commander, Eisenhower confided to his diary in 1951 as the Korean War raged that we can have national “security without paying the price of national bankruptcy.” He added tellingly: “if we will put brains in the balance” in a thorough top-to-bottom “professional examination” of what the country needs and what it can afford.

What was needed was: “More bang for the buck!”

The former General Motors president, “Engine Charlie” Wilson, Eisenhower’s first defense secretary, regarded that as holy writ. A “New Era” Navy – Forrestal, the first of the attack carriers and Nautilus, the first nuclear-powered submarine, were on the way. The “‘Pentomic Divisions” with their short-range nuclear-tipped missiles were in the Army’s future. Onward with the hydrogen bomb. There were the bangs.

Wilson told Time Magazine when leaving office in 1957 that he gave the job of running the Pentagon “the darndest whirl it ever had,” and to that he was man of his word. The department came down from spending about $550 billion in constant 2010 dollars in 1952 (still fighting in Korea) to less than $300 billion when he gave that interview. There were the cuts.

Fast forward 40 years.

President Bill Clinton has tapped the brilliant Les Aspin, a maverick within his own party who possessed few management skills, often thought out loud in public, and owned all manner of disheveled suits, as his secretary of defense.

Having advised Clinton on national security issues during the campaign, Aspin already was skeptical about the “Star Wars” claims surrounding the Strategic Defense Initiative. With the Cold War over and having boxed in Saddam Hussein in Iraq, he questioned the Navy’s obsession with so many carrier battle groups and “boomers,” the Army’s insistence on keeping so many soldiers in Europe and the Air Force argument for so many fighter wings. End-strength in all the services was too high in this “New World Order,” a phrase borrowed from the first Bush administration, was plain to see. The corollary to all those “facts:” fewer people need fewer bases in and out of the United States. It was time to harvest the “Peace Dividend,” $100 billion to be precise, over the next five years.

Unlike Eisenhower, Aspin wanted for his top-to-bottom review of the Defense Department a total “Bottom-Up Review” of Pentagon priorities. Instead of reaching far outside the building or even far away from the E-Ring, his steering group was led by John Deutch, undersecretary for acquisition and technology, with representatives from the Office of the Secretary of Defense, the Joint Chiefs and the services.

To many in the Pentagon, the process was known as the “Bottoms-Up Review,” their toast to the end of the world as they knew it. This was one of the more polite references to the work that was released in September 1993.

The review’s scorecard read: 10 active Army divisions; 11 carrier battle groups; 45 to 55 attack subs; about 345 warships; five active Marine brigades and 13 active and seven reserve Air Force fighter wings. This was the force that could fight and win two regional wars, so it was said.

Earlier Aspin had released a plan to close 31 large installations and consolidate more than 130 others. He also gave SDI a new name and made it answer to Deutch with its new priority of theater missile defense. Those were the cuts.

To the participants’ credit, the review called for more investment in prepositioned equipment and better airlift and sealift – “power projection” with extremely strong Army backing. It also wanted more investment in anti-armor and precision-guided munitions – Desert Storm showed their value. Of major significance, but little appreciated at the time, was the creation of the Separate Enhanced Brigades in the National Guard. There were to be no more months-long validation drills before Guard soldiers would be ready for the fight. By the time the Georgia guardsmen were validated, the shooting in Kuwait and Iraq had stopped. The enhanced brigades were to have the equipment and training necessary to be deployed quickly.

Those were the bangs.

But the promised $100 billion savings never materialized. Somalia, Haiti and Bosnia popped up and there were bad guesses on inflation, an unexpected military pay raise, etc. Aspin put the savings – largely cost avoidance — at maybe $50 billion over five years.

The point is that those reviews, the ritualized Quadrennial Defense Reviews and President Barack Obama’s Defense Strategic Guidance are really “budget drills” – not a bad phrase – for the future. Some sought opinions from many sources in and out of the department, the government, business and academia. Some were very close-hold. All sought consensus.
Strategic reviews are not engraved in stone. They necessarily reflect changing circumstances – politically, economically, militarily and diplomatically.

The sky isn’t falling just because Secretary Leon Panetta confirmed two brigades assigned to Europe will be returning to bases in the United States, the Army is coming down 70,000 soldiers in the next 10 years, or the size of the fleet is shrinking and drones are doing more than intelligence, surveillance and reconnaissance.

For years, the coming cuts have been obvious. The financial crisis that drove the economy almost into the ground is the largest factor. Smaller tax revenue coming in should mean less money for government to spend in rational times. (We live in often irrational times when spending never slows even when income plummets.) Ending military operations in Iraq and setting a timetable for a drawdown in Afghanistan are major secondary factors.

Defense Secretary Robert Gates in 2009 axed the Army’s Future Combat Systems program and said “hold on a minute, Air Force” in looking at fighters. In 2010, he set about finding $100 billion in savings to be put into weapons programs. When he was told to find ways to make cuts and not just make re-investments, he did it.

Panetta, a former director of the Office of Management and Budget, is doing the same.
Let’s go back to year that Aspin held office and to the thoughts of a man directly affected by the coming Clinton budget cuts.

Norman Augustine, retired chairman and chief executive officer of Lockheed Martin, recalled in Defense News the so-called “Last Supper” meeting at the Pentagon called by Aspin, Deputy Defense Secretary William Perry and Deutch. In no uncertain terms, Perry told the assembled defense industry executives that the department was going to be spending less. In times like that, the Pentagon would need fewer, but financially-healthier contractors. He said the department would not oppose mergers that would lead to keeping “a small number of healthy competitors.”

Augustine put the savings to the government after the consolidation of Lockheed Martin at $3 billion, about the same as a single round of Base Realignment and Closure. The price, he added, were painful layoffs and plant closings. The reward was “the industry is stronger than it would have been” without the mergers.

That is the lesson today, as well.

Instead of the “weeping and gnashing of teeth,” the Cassandras in Congress, the Pentagon and defense industry should take, in Augustine’s words, “Rolaids along with the dessert” when the fiscal year 2013 budget is unveiled in February.

The budget wasn’t handed down on Mount Sinai either. It can be changed to reflect the circumstances.

John Grady was the longtime communications director for the Association of the United States Army. An Air Force veteran, he also worked as managing editor of Navy Times.

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