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Gates Trims Senior Ranks in Major Cost Cutting Initiative

by Greg on August 9, 2010

In his continuing war on the “culture of endless money that has taken hold” within the Department of Defense since 2001, Defense Secretary Robert Gates announced today plans to eliminate Joint Forces Command, based at Norfolk, Va., curtail the use of contractors and eliminate up to 50 flag officers and 150 senior civilian positions over the next two years.

The cost cutting efforts announced today are not a budget cut drill, rather, he is trying to get ahead of deficit hawks in Congress that may be tempted to look to the defense budget as a source of money to cure the federal government’s fiscal woes. Seeking a “peace dividend,” Congress has slashed defense spending four times in the past, he said; he worries they’ll try it again.

“It’s about protecting money for the future.” Gates is struggling to free up money within the defense budget top line to spend on force structure and modernization to meet what he said were future threats, including failed and failing states and countries that are rapidly modernizing their militaries; which is the common euphemism for China. He singled out “precision ballistic missiles” as a looming threat to U.S. forces.

Current and planned defense budgets represent the minimum level of spending needed to prepare the military to counter such threats, he said. He hopes to find 2 to 3 percent in savings that can be reinvested in weapons systems. He highlighted shipbuilding as one area where more money is needed.

Where savings can be found, Gates said, is in the military’s bloated executive suites which have become “cumbersome” and overly reliant on contractors. While the wide ranging cuts he proposed today focused on trimming labor costs, Gates said he was mindful that at some point DoD must address the rampaging elephant in the defense budget: rising health care costs. “We’re being eaten alive by health care,” he said. The military’s health care costs have risen from $19 billion in 2001 to over $50 billion in 2011.

Gates said the services get to keep any savings they can come up with to spend on new weapons. He hinted that the services may propose significant personnel cuts of their own to free up money.

The initiatives announced today to reduce overhead duplication and excess include:

• Reduce funding for support contractors by 10 percent a year for the next three years.

• Close JFCOM, a command that includes some 2,800 military and civilian personnel and 3,000 contractors at an annual cost of $240 million.

• As part of a re-base lining, freeze the number of OSD, defense agency and Combatant Command billets at the fiscal 2010 levels for the next three years. No additional full time OSD positions will be created after 2010 to replace contractors except for critical needs.

• Freeze at FY2010 levels the number of flag officer, senior executive and political appointee positions.

• Consolidate IT infrastructure facilities.

• Freeze the number of DoD required oversight reports and cut the dollars for advisory studies by 25 percent.

– Greg Grant

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