Gates Budget Review to ‘Force Discussion’ of Risk Analysis

WASHINGTON, May 18, 2011 — Defense Sec­re­tary Robert M. Gates today announced the frame­work for a com­pre­hen­sive review of mil­i­tary spend­ing designed to put nation­al secu­ri­ty needs ahead of arbi­trary bud­get cuts.

“We must reject the tra­di­tion­al approach of apply­ing across-the-board cuts — the sim­plest and most polit­i­cal­ly expe­di­ent approach, both inside this build­ing and out­side of it,” Gates said at a Pen­ta­gon news brief­ing. “That kind of an approach pre­serves over­head and main­tains force struc­ture on paper. But it results in a hol­low­ing out of the force from a lack of prop­er train­ing, main­te­nance and equip­ment. We’ve been there before in the 1970s and in the 1990s.”

Pres­i­dent Barack Oba­ma, in an April 13 speech on the nation’s fis­cal chal­lenges, set a goal of sav­ing $400 bil­lion over 12 years, most­ly from the Defense Depart­ment and beyond sav­ings already iden­ti­fied. To do that, he direct­ed Gates and oth­er Pen­ta­gon lead­ers to con­duct a “fun­da­men­tal review of America’s mil­i­tary mis­sions, capa­bil­i­ties, and secu­ri­ty role around the world,” Gates not­ed.

Defense lead­ers have worked for more than two years to find cost sav­ings in the depart­ment, Gates said. The effort began in acqui­si­tions, with more than 20 weapons sys­tems being cur­tailed or can­celled, then moved to cut­ting over­head costs and redi­rect­ing the sav­ings to sup­port warfight­ers and help to reduce the fed­er­al deficit. “The over­ar­ch­ing goal of these efforts was to carve out enough bud­get space to pre­serve and enhance key mil­i­tary capa­bil­i­ties in the face of declin­ing rates of bud­get growth,” he said. The goal of the new review, Gates said, is “to pre­serve a U.S. mil­i­tary capa­ble of meet­ing cru­cial nation­al secu­ri­ty pri­or­i­ties, even if fis­cal pres­sure requires reduc­tions in the force’s size.” The review will be guid­ed by the Nation­al Secu­ri­ty Review, the Nation­al Defense Strat­e­gy, the Nation­al Mil­i­tary Strat­e­gy, the Chairman’s Risk Assess­ment and the Qua­dren­ni­al Defense Review to ensure it is focused on “strate­gic pol­i­cy choic­es, first, and cor­re­spond­ing changes in the DOD bud­get, sec­ond,” the sec­re­tary said. The direc­tor of cost assess­ment and pro­gram review, the under­sec­re­tary of defense for pol­i­cy, and the chair­man of the Joint Chiefs of Staff will lead the effort joint­ly, he added.

The review will pro­vide a strong ana­lyt­i­cal link cur­rent­ly miss­ing between the QDR and the present make­up of the forces, the sec­re­tary said. Once com­pet­ing strat­e­gy options are iden­ti­fied, only then should the review con­sid­er fis­cal impli­ca­tions and options, he said.

The sec­re­tary out­lined a four-step process for sav­ing mon­ey in the depart­ment that would start with iden­ti­fy­ing addi­tion­al effi­cien­cies to be gained from elim­i­nat­ing bureau­crat­ic excess and over­head. But that alone won’t gen­er­ate enough sav­ings, Gates said, so exam­in­ers should then move on to look­ing at pro­grams, process­es and man­dates that dri­ve up costs, “to include the way we deliv­er health care, com­pen­sate mil­i­tary per­son­nel, pro­vide retire­ment ben­e­fits, sus­tain our infra­struc­ture and acquire goods and ser­vices.”

In the third cat­e­go­ry, offi­cials will review mis­sions and capa­bil­i­ties of mar­gin­al scope against over­all strat­e­gy. “They rep­re­sent mis­sions that the depart­ment car­ries out today that, while of val­ue, are not cen­tral to our core mis­sion or are of low­er pri­or­i­ty,” Gates explained.

Gates cit­ed the long-stand­ing U.S. strat­e­gy that calls for the mil­i­tary to be able to fight two major, region­al con­flicts simul­ta­ne­ous­ly as an exam­ple of review­ing strate­gic alter­na­tives.

“If you were to tell your­self the like­li­hood of hav­ing two such fights simul­ta­ne­ous­ly is low, and you could there­fore plan to fight sequen­tial­ly, that would have huge impli­ca­tions in terms of the size of force that you need to main­tain,” he said. “But the oth­er side of that is the risk involved if you’re wrong.”

The final area for con­sid­er­a­tion – “the hard­est cat­e­go­ry, strate­gi­cal­ly, and I would say intel­lec­tu­al­ly,” Gates said – is to con­sid­er alter­na­tives to the Qua­dren­ni­al Defense Review strat­e­gy that trans­late into options for reduc­tions in force struc­ture or capa­bil­i­ty need­ed to exe­cute the strat­e­gy, Gates said. Such con­sid­er­a­tion would be informed by all the oth­er activ­i­ties in the frame­work, he added.

“In the end, this process must be about iden­ti­fy­ing options for the pres­i­dent and the Con­gress where the nation is will­ing to accept risk in exchange for reduced invest­ment in the Depart­ment of Defense,” Gates said. No mat­ter what hap­pens in the review process, the sec­re­tary said, lead­ers must make tough deci­sions and avoid the “hol­low­ing out” of the forces.

“I want to force that kind of dis­cus­sion,” he said. “If we’re going to cut the mil­i­tary, if we’re going to reduce the resources and the size of the U.S. mil­i­tary, peo­ple need to make con­scious choic­es about what the impli­ca­tions of that are for the secu­ri­ty of the coun­try, as well as for the oper­a­tions that we have around the world.”

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs)

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