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)