“Whatever that budget decline looks like will set the context for whatever else Hagel wants to do as defense secretary,” said Gordon Adams, an international-relations professor at American University who served as a White House budget official during the Clinton administration. “We know the cuts are coming. This is a drawdown.”
Unlike current Defense Secretary Leon E. Panetta, who previously served as chairman of the House Budget Committee and as budget director under President Bill Clinton, Hagel has little experience in the arcane but high-stakes world of defense spending. During his two terms in the Senate, the Nebraska Republican sat on the Foreign Relations and intelligence committees, but not on the Armed Services panel.
In September 2011, Hagel told the Financial Times that the Defense Department was “bloated,” adding: “The Pentagon needs to be pared down. I don’t think our military has really looked at themselves strategically, critically in a long time.”
Last year, Hagel endorsed a report by the advocacy group Global Zero that called for an 80 percent reduction in the U.S. nuclear-weapons arsenal. Such a cut could save $100 billion over 10 years, the group estimated.
Otherwise, he has given few specific indications of where he would look to save money. Many conservatives, however, suspect that he would be more willing to impose cuts than Panetta or his predecessor, Robert M. Gates.
“If the picture was gloomy before, the clouds just got darker,” said Thomas Donnelly, a defense and security policy analyst at the American Enterprise Institute in Washington. “Hagel’s just been recruited to be a front man for further budget cuts.”
Swollen by a decade of war spending, the Pentagon’s annual budget peaked in 2010 at $690 billion and has gradually begun to recede. Most of the cuts imposed, however, have merely rolled back projected increases or reflected savings from reduced war-fighting expenses. This year’s Defense Department budget declined to $616 billion.
Few major weapons programs have been canceled since 2009. The Army and the Marine Corps are each shedding tens of thousands of troops, but only back to levels last seen in 2007, during the height of the fighting in Iraq.
The Joint Chiefs of Staff and other senior military brass have accepted the budget trimming with minimal fuss, closing ranks behind Panetta as he has tried to manage an orderly downsizing.
But that could change almost as soon as his successor takes office. Unless Congress and the White House come up with an alternate savings plan by March, the Pentagon will be forced to cut as much as $500 billion more over the next 10 years.
Even if that outcome is avoided, many defense officials and analysts assume that the Pentagon’s budget will gradually dwindle as lawmakers and Obama haggle over ways to improve the country’s finances.
As defense secretary, Hagel would take on one of the biggest managerial jobs in the United States, overseeing 1.4 million active-duty service members and about 800,000 civilian employees.
Hagel is highly familiar with veterans’ issues. He served for two years as an enlisted soldier during the Vietnam War and was decorated with two Purple Hearts for wounds sustained during combat. He was deputy director of the Veterans Administration during the Reagan administration and later served as president of the United Service Organizations.
In announcing the nomination at the White House on Monday, Obama alluded to the pressures on the Pentagon’s bottom line by highlighting Hagel’s experience in the private sector. Among other jobs, Hagel has been a venture capitalist and became wealthy as a cellphone company pioneer in the 1980s.
“As a successful businessman, he also knows that even as we make tough fiscal choices, we have to do so wisely, guided by our strategy, and keep our military the strongest fighting force the world has ever known,” Obama said.
Although examples of wasteful military spending are commonly cited, virtually every defense program has a political or business constituency that will vigorously lobby Congress to keep the money flowing — even when the Pentagon doesn’t want it.
Last year, Panetta proposed a new round of military base closures, but the idea was immediately shot down by lawmakers, virtually all of whom have a base in their district. Congress also routinely gives troops bigger annual raises than the Pentagon requests.
During his time at the Pentagon, Gates complained that health-care costs were “eating us alive,” but lawmakers have been reluctant to approve modest increases in co-payments for military retirees.
Arnold Punaro, a retired Marine Corps major general and former staff director of the Senate Armed Services Committee, said soaring compensation costs, inefficient weapons-acquisition programs and bloated overhead expenses are “ticking time bombs” in the defense budget that the new defense secretary will have to address.
“These things are like rust on a bridge,” he said. “They’re basically eating away at our national security.”