Robert Gates orders the Pentagon to tighten its belt in ways that could squeeze its massive bureaucracy. Gates: Spending 'gusher' now off

ABILENE, Kan. — Warning that the kind of massive budget increases seen since 2001 cannot continue, Defense Secretary Robert Gates is ordering the Pentagon to tighten its belt in ways that could squeeze its massive bureaucracy and create serious heartburn on Capitol Hill and in the defense industry.

“The attacks of Sept. 11, 2001, opened a gusher of defense spending that nearly doubled the base budget over the last decade, not counting supplemental appropriations for the wars in Iraq and Afghanistan,” Gates said Saturday during a speech at the Eisenhower Library. “Given America’s difficult economic circumstances and parlous fiscal condition, military spending on things large and small can and should expect closer, harsher scrutiny. The gusher has been turned off and will stay off for a good period of time.”


Since President Barack Obama took office, Gates, a Bush appointee kept on by the new administration, has preached the gospel of austerity, moving to rein in the cost of out-of-control weapons systems — but now he wants that restraint will spread more widely across the Pentagon.

It’s a matter of necessity, he said. The military’s nearly $700 billion war chest may still grow slightly, but not enough to properly equip the military at its current size.

Given the economic circumstances, Gates told reporters that the president and Congress would probably think very hard about whether to engage in another conflict that didn't directly threaten U.S. security. Iran isn’t one such conflict now, but said it could become one.

“I don't know. I think it depends on developments over the next year or two,” Gates said.

To maintain the size and health of the services, Gates is recommending a $10 billion cut in overhead costs for fiscal year 2012 that would upend how the Pentagon does business — reducing the number of general officers it promotes, consolidating agencies and increasing military health care premiums. And he’s continuing to tell the military it needs to change the way it thinks about weapons systems.

“I know after this speech every flag officer will think I’m after him or her. That’s just one example of where I think we haven’t exercised discipline,” Gates said. “They’re not necessarily a target; we just have to look at everything.”

“The goal is to cut our overhead costs and to transfer those savings to force structure and modernization within the programmed budget. In other words, to convert sufficient ‘tail' to ‘tooth’ to provide the equivalent of the roughly 2 to 3 percent real growth — resources needed to sustain America’s combat power at a time of war and make investments to prepare for an uncertain future,” Gates said in his speech. “Simply taking a few percent off the top of everything on a one-time basis will not do. These savings must stem from root-and-branch changes that can be sustained and added to over time.”

The hometown of President Dwight Eisenhower, still famous for warning about the danger of unchecked growth in the military industrial complex, provided an apt backdrop for words that pointed at all three corners of the Iron Triangle.

The speech built on a sharp warning he gave to the Navy and Marine Corps Monday at a Navy League conference, where he urged them to think more deeply about the challenges facing its costliest platforms — including aircraft carriers that run $11 billion each, future ballistic missile submarines costing $7 billion apiece and a Marine Corps amphibious assault vehicle.

Through the week, officials from the Navy and the Marine Corps and Sen. Jim Webb (D-Va.), who resigned as Navy secretary under President Ronald Reagan over cuts to the Navy’s force structure, defended the need for those programs.

“It would be a very serious mistake to cut back or alter the defense budget in order to fund ground forces in Iraq and Afghanistan — hopefully temporarily — and, at the same time, do that at the expense of vital shipbuilding programs that take years and years to put into place and are the envy of every other country,” Webb said in a statement.

In a conversation with reporters Friday, Gates sought to temper any claims that he was aiming to reduce the nation’s fleet of 11 aircraft carriers.

“I might want to change things, but I’m not crazy. I’m not going to cut a carrier, OK,” Gates said. “But people ought to start thinking about how they’re going to use carriers in a time when you have highly accurate cruise and ballistic missiles that can take out a carrier that costs between 10 [billion] and 15 billion dollars and has 6,000 lives on it.”

His speech laid into the Defense Department for maintaining a 20th-century, top-heavy organization so cumbersome that it takes five four-star command headquarters to sign off on a request for a dog-handling team in Afghanistan.

Gates told reporters before the speech that he didn’t have a number of officers to cut in mind but said he might consider consolidating commands but was unlikely to fight Congress over base realignments or closings.

The military’s health care system, called TRICARE, is another area that Gates said needs cutting.

“Leaving aside the sacred obligation we have to America’s wounded warriors, health care costs are eating the Defense Department alive, rising from $19 billion a decade ago to roughly $50 billion — about the entire foreign affairs and assistance budget of the State Department,” Gates said in his speech.

It’s a perennial fight between the Pentagon and Congress, which loathes cutting such benefits — particularly for soldiers who have been fighting the nation’s wars for nearly nine years and one the Pentagon tends to lose. But Gates wants Congress to back his request to raise the premium and co-pay.

“The increase we’re talking about would be laughable to those who have nongovernmental health care,” he told reporters, adding that a family of four under TRICARE pays $1,200, compared with what the same family would pay under the federal employee health insurance program: $3,200.

Gates stressed that he’s trying to lay down the kinds of cuts that will continue to save money in the long run.

Tackling the Pentagon’s bureaucracy is a task attempted by nearly every defense secretary — including his predecessor, Donald Rumsfeld. Gates said that he is under no illusions about the magnitude of the job, but nonetheless hopes to win cooperation from Congress and the military where others have met resistance.

“One of the reasons these exercises have failed in the past is there’s no incentive for the services. They come up with savings, and it gets hauled off and goes to someone else,” he said. This time, the services will be able to apply to their own programs what they save by cutting overhead costs.

“What I’m asking for is not a simple budget cut; [what] I’m talking about is changing the way we do business. It’s taking the savings from that and applying it to long-term investments,” he said. “This is a lot harder than cutting the budget for one year.”

Asked would he stay on longer than early next year to see these budget moves through, Gates didn’t close the door, responding with the cryptic: “We’ll see.”