The Cable

What's really behind the Gates cuts

Defense Secretary Robert Gates's bombshell announcement that he will close Joint Forces Command as part of sweeping reforms of the defense bureaucracy is being seen around the defense community as a preemptive move against congressional efforts to cut the defense budget.

The moves, which also include shutting down DOD's Business Transformation Agency, closing the office of networks and information integration, cutting contractors, general officers, and the size of the Pentagon's administrative staff, all come only weeks after Congress proposed $8 billion of cuts in the defense budget for next year, manifested in the Senate Appropriations Committee's markup of the fiscal 2011 spending allocations.

Gates was clear that his goal is protect at least 1 percent growth in the defense budget in perpetuity, by showing Congress and the greater defense community that his department is managing its money well and therefore deserves to receive increasing budgets even though defense funding has more than doubled since 2001.

Joint Chiefs Vice Chairman Gen. James Cartwright referred directly to the Senate committee's recent action in his follow-up briefing with reporters Monday.

"We have to do something to accommodate those [proposed cuts]. We oppose that. But it looks as though in '11 it will happen," said Cartwright.

Pentagon Comptroller Robert Hale described Gates's proposals as needed to head off this and other attempts to reduce defense spending.

"My sense is that if we don't do these things, then the consequence is pretty significant," he said. "We need to make a strong case to the American people and to the Congress that we are tightening our belts. I think without that case, they won't support the 1 percent."

Some former officials noted that Gates's initiatives attempt to preempt the ongoing national discussion over whether the defense budget should actually go down after years of huge increases. The president's debt commission is said to be looking at defense as part of its effort to find savings.

"You don't get a deal on the deficit unless you deal with defense," said Gordon Adams, who headed national-security budgeting in the Clinton White House. "What he's asking to do is freeze the defense budget at the absolute peak of the curve."

With the rising deficits, the growing debt, and the increased pressures on all parts of the federal budget, members of both parties are looking at the defense budget for savings. Even inside the Republican Party, the debate over whether to cut defense budgets is raging now.

But Gates's cost-cutting initiatives all are focused on spending money more wisely, not spending less money. He is trying to incentivize the military services to find $100 billion of savings over 5 years by promising them they can "keep what they catch."

"Nothing incentivizes people like losing money," said Adams. "As long as you are still arguing for growing budgets, you are still moving deck chairs on the Titanic."

Many of Gates's decisions stem from the recommendations of the Defense Business Board, an internal panel of outside experts appointed by the secretary, but even its members warn that the devil is in the details.

"It's a giant step in the right direction," said former Pentagon comptroller and DBB member Dov Zakheim. "Whether this really means a lot is a function of time, whether this gets implemented, and whether or not [Gates] stays on."

Maneuver warfare

Gates's strategy for getting his reforms underway shows skill in navigating the bureaucracy but also calls into question whether his proposed moves will really have the desired impact.

Similar to the way Gates has rolled out other controversial decisions, such as his announcement last year that he would end several big-ticket weapons projects, Gates made his move when Congress was out of town, ensuring a muted congressional reaction. Gates also held a number of background meetings and briefings with experts and other interested parties to answer questions and get some buy-in.

But the real indication of Gates's savvy was in the fact that he left the recommendations vague enough as to not give any specific interest groups a good reason to oppose them in the near term. A 10 percent reduction in contractors sounds great, but without knowing which contractors, it's hard to find a lawmaker or corporation that is willing to raise a protest.

"Who can argue for maintaining redundancy or paying for contractors, which has become synonymous for all things bad?," said Maren Leed, director of the New Defense Approaches Project at the Center for Strategic and International Studies. "Industry is likely to take a wait-and- see approach because we don't know what any of this means."

For Congress, most lawmakers can't know yet which districts will be affected so they can't yet protest. Gates has been successful in portraying congressional objections as just more pork-barrel politics, whether that's the case or not, said Leed. Gates also avoided dealing with military entitlements, such as health care, which lawmakers always strongly defend.

Gates also didn't mention any move to transfer missions and money from the Defense Department to the State Department -- an idea he has promoted in the past but made little progress in implementing.

The National Security Strategy, which talks about a whole of government approach, didn't seem to factor into Gates's decisions either. "All that NSS rhetoric doesn't seem to be a part of this. I don't blame him for it based on the political realities, but it is a disconnect," Reed said. "The assumption that the DOD is the most efficient and appropriate tool in our national-security kit for doing a lot of these things is a very arguable position."

Moreover, many of Gates's announcements on Monday seem to have more psychological appeal than prospects for real cost savings. For example, cutting 50 general officers sounds like a bold move, but they will likely be replaced by lower-ranking officers and the difference in salaries is not significant.

"Everybody likes to see cuts in general officers. It's a crowd pleaser but it doesn't result in any cost savings at all," said John Pike, director of Globalsecurity.org, "Ask yourself, what congressional district produces generals? There isn't one."

Even the most controversial decision, shutting down Joint Forces Command in southern Virginia, isn't likely to produce savings on the scale that is really needed, said Pike. The command costs only about $240 million per year.

"It's certainly a headline grabber, but the more I study it, the less I understand it," he said. "There seems to be a difference between the diagnosis and the prescription."

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