Defense Secretary Gates's war of necessity against wasteful spending

Wednesday, May 26, 2010

DEFENSE SECRETARY Robert M. Gates spent his first two years focused on the wars in Iraq and Afghanistan, in each case backing a "surge" to turn around U.S. fortunes. Now, with his time in office probably dwindling, he's taken on a final mission: reforming Pentagon spending so that the United States will be able to maintain its military forces in an era of fiscal austerity. Though the outcome of a war isn't at stake, it's crucial that Mr. Gates succeed.

The secretary's campaign is motivated by some simple math. Maintaining the current number of Army divisions, Navy ships and Air Force wings -- which Mr. Gates rightly believes is essential at a time of growing international insecurity -- requires spending increases of 2 to 3 percent each year in real terms. While the Pentagon is budgeted for modest growth through 2015, it can hardly count on that continuing when Congress will be -- or should be -- trying to reduce or eliminate the dangerous structural gap between federal revenue and spending.

Mr. Gates's aim is to find the spending increases needed for U.S. forces -- the "tooth" -- by cutting the military's "tail": administrative costs, excessive bureaucracy and wasteful weapons systems. This is, to use some military jargon, a target-rich environment. Since Sept. 11, 2001, the Pentagon budget has nearly doubled, not counting the costs of Iraq and Afghanistan. Much has gone to non-military ends. Health-care costs, for example, have risen from $19 billion to $51 billion and make up nearly a tenth of the entire budget. A military family of four pays an average of $1,200 annually for health care, compared with $3,200 for other federal employees. Wages have risen 43 percent, compared with 32 percent in the private sector.

While the military's overall size has shrunk since the Cold War, generals, admirals and their headquarters have remained intact. The private sector has flattened and streamlined management since 2000, but the number of levels of staff between the secretary of defense and a line officer has grown from 17 under Donald Rumsfeld to as many as 30 under Mr. Gates. The latter likes to point out that a request for a dog-handling team in Afghanistan must be approved by five four-star headquarters.

A seasoned veteran of Washington, Mr. Gates doesn't aim for radical change. He'd like to cut $15 billion or so from these costs in the 2012 defense budget. The problem, of course, is Congress. Legislators have regularly added to Pentagon pay raises -- a House subcommittee has tacked on half a percentage point to the 1.4 percent increase Mr. Gates proposed for next year. And they have refused to allow an increase in health premiums for retirees, though premiums haven't gone up in 15 years.

The main battles over these costs may not come until next year. But Mr. Gates faces a preliminary test: The House Armed Services Committee this month voted to add funding for a second engine for the F-35 fighter despite the Pentagon's insistence that it did not want and could not afford it. Mr. Gates has repeatedly said he will recommend a presidential veto if the defense bill passes with this blatantly wasteful spending, and President Obama should back him up. It's a good way for the administration to demonstrate its seriousness about restraining spending -- and to shape the battlefield for the bigger fights to come.

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