Panetta: DOD Must Preserve Essential Capabilities

WASHINGTON, Oct. 11, 2011 — The Defense Depart­ment must pre­serve its essen­tial mil­i­tary capa­bil­i­ties as it tight­ens its belt over the next decade, Defense Sec­re­tary Leon E. Panet­ta said here today.

Defense mod­ern­iza­tion and oper­at­ing funds offer the most options for the Pentagon’s strat­e­gy-based plan to achieve more than $450 bil­lion in spend­ing cuts over the next 10 years, but force size, mil­i­tary pay and ben­e­fits also must be addressed, Panet­ta told the audi­ence at the Woodrow Wil­son Inter­na­tion­al Cen­ter for Schol­ars’ Lee H. Hamil­ton lec­ture. The effort that then-Defense Sec­re­tary Robert M. Gates launched last year to elim­i­nate over­head infra­struc­ture, waste and dupli­ca­tion has result­ed in $150 bil­lion in sav­ings and may yield up to an addi­tion­al $60 bil­lion, but loom­ing bud­get reduc­tions require much more, Panet­ta said.

“Every pro­gram, every con­tract, every facil­i­ty will be scru­ti­nized for sav­ings that won’t reduce readi­ness or our abil­i­ty to per­form essen­tial mis­sions,” he said.

DOD must pre­serve essen­tial mil­i­tary capa­bil­i­ties, the sec­re­tary said, and main­tain a robust defense indus­tri­al base � the busi­ness­es that man­u­fac­ture or main­tain U.S. mil­i­tary weapons, equip­ment, muni­tions, hard­ware and soft­ware. How­ev­er, bud­get con­straints like­ly will mean reduced mod­ern­iza­tion in some areas, along with pro­cure­ment reform to con­trol cost, improve deliv­ery times and increase com­pe­ti­tion, he added.

Also, per­son­nel costs are “a major dri­ver of bud­get growth and … are on an unsus­tain­able course,” Panet­ta acknowl­edged. Mil­i­tary end strength has increased by 5 per­cent since 2001, but pay and health care costs are up about 80 per­cent over that time, he not­ed.

“This will be an area of extreme chal­lenge, because my high­est pri­or­i­ty is obvi­ous­ly to main­tain the vital­i­ty of our all-vol­un­teer force, and keep faith with the men and women who have put their lives on the line to defend the coun­try,” he said.

In a tight bud­get, the cost of pay and ben­e­fits to a degree rep­re­sents a trade-off against funds for nec­es­sary train­ing and equip­ment, the sec­re­tary said. Still, he vowed that any changes to com­pen­sa­tion will be “grand­fa­thered” where pos­si­ble so as not to affect peo­ple cur­rent­ly serv­ing.

Ground forces will be small­er after U.S. forces leave Iraq and Afghanistan, Panet­ta said, but the nation still faces a wide array of threats, “from ter­ror­ism to nuclear pro­lif­er­a­tion; from rogue states to cyber attacks; from rev­o­lu­tions in the Mid­dle East to eco­nom­ic cri­sis in Europe to the rise of new pow­ers like Chi­na and India.”

All of those ele­ments rep­re­sent secu­ri­ty — geopo­lit­i­cal, eco­nom­ic and demo­graph­ic shifts that make the world “more unpre­dictable, more volatile and, yes, more dan­ger­ous,” the sec­re­tary said.

“I must be able to main­tain a suf­fi­cient force to … fight in more than one area,” he told the audi­ence.

Nation­al Guard and Reserve forces have proven them­selves in the past decade’s com­bat the­aters, and can respond when future crises occur, the sec­re­tary said. But the nation must have a mil­i­tary trained and equipped to respond to an uncer­tain and sur­pris­ing secu­ri­ty envi­ron­ment.

“Look­ing at all these areas, the poten­tial exists, if we make the right strat­e­gy-based deci­sions, to build a mod­ern force that sus­tains our lead­er­ship in the world, and under­writes our secu­ri­ty and pros­per­i­ty,” he said. “But to accom­plish this will require that we nav­i­gate through some very per­ilous polit­i­cal waters � there are seri­ous dan­gers ahead and very lit­tle mar­gin for error.”

Panet­ta said the sequester mech­a­nism built into the Bud­get Con­trol Act of 2011 could trig­ger “dis­as­trous” cuts — not only for DOD, but also for the State Depart­ment, the U.S. Agency for Inter­na­tion­al Devel­op­ment and oth­er agen­cies crit­i­cal to the nation’s secu­ri­ty inter­ests.

Nation­al secu­ri­ty depends on defense, diplo­ma­cy and the abil­i­ty to help oth­er coun­tries while invest­ing in domes­tic qual­i­ty-of-life issues such as edu­ca­tion and employ­ment, the sec­re­tary said.

“We must remem­ber that the Amer­i­can peo­ple and our part­ners across the globe are safer, more sta­ble, and more pros­per­ous because of our glob­al lead­er­ship, and the strength of our mil­i­tary,” he added.

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