Pentagon Will Examine All Budget Areas, Official Says

WASHINGTON, Nov. 17, 2011 — The Defense Depart­ment will do its part to cut the fed­er­al deficit and will look at all areas of its bud­get, the Pentagon’s comp­trol­ler said here today.

Prin­ci­pal Deputy Under­sec­re­tary of Defense Mike McCord addressed the Excel­lence in Gov­ern­ment con­fer­ence at the Ronald Rea­gan Build­ing. He also spoke to Fed­er­al News Radio.

The new fis­cal envi­ron­ment has forced a long, hard look at mil­i­tary com­pen­sa­tion, McCord said. Over­all troop com­pen­sa­tion has gone up, he said.

But now, hav­ing to elim­i­nate $450 bil­lion from the defense bud­get over the next 10 years, the comp­trol­ler said depart­ment offi­cials are look­ing at com­pen­sa­tion more close­ly.

McCord said it is pos­si­ble that “we might have to stop or slow some of the increas­es.”

For­mer and cur­rent defense sec­re­taries Robert M. Gates and Leon E. Panet­ta have dis­cussed the fis­cal issues caused by esca­lat­ing mil­i­tary health care costs. In fis­cal 2001, the price was $19 bil­lion. The annu­al mil­i­tary health bill now tops $50 bil­lion.

“That’s prob­a­bly the one peo­ple think of first, but our entire com­pen­sa­tion pack­age is a pret­ty big part of our bud­get and has to be looked at,” McCord said.

Pick­ing whether to look at pay or allowances in addi­tion to health care costs, he said, is “some­thing we have spent a great deal of time on and a lot of care with.”

Some fis­cal restraints will prob­a­bly occur next year, he said.

If the Joint Select Com­mit­tee on Deficit Reduc­tion can­not reach agree­ment before Novem­ber 23, the seques­tra­tion mech­a­nism starts. The process would not kick into gear until Jan­u­ary 2013, but the Defense Depart­ment is so big that plan­ning would have to begin almost imme­di­ate­ly.

“The sec­re­tary has been very clear his oppo­si­tion to seques­tra­tion,” McCord said.

If seques­tra­tion is trig­gered, DOD offi­cials will “spend an enor­mous amount of time doing what-if drills,” the comp­trol­ler said.

Panet­ta has direct­ed lead­ers to think strate­gi­cal­ly and to pro­tect the department’s core inter­ests, McCord said.

“We’ve grouped our think­ing into how to make our­selves small­er,” he said, “[and] where to make our­selves small­er and the com­pen­sa­tion side.”

DOD con­tin­ues to seek effi­cien­cies, McCord said, and iden­ti­fy where to invest shrink­ing resources.

The depart­ment will pro­tect fund­ing for oper­a­tions in Afghanistan and resources in the Asia-Pacif­ic region, he empha­sized.

DOD also is look­ing at “where we can take added risks, and in some cas­es where we might need more capa­bil­i­ties,” McCord said.

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