December 2, 2012
The Post-Downturn Pentagon Is Going to Be Very Ugly
Quagmire on the Potomac
BY WINSLOW WHEELER | NOVEMBER 30, 2012
Amidst the many uncertainties and machinations in the negotiations in Washington on the "fiscal cliff," a few things are beginning to emerge as certain. Among them: the defense budget will be going down. Another is that none of the parties to the negotiations is seeking the kind of change that the Pentagon must undergo to survive effectively, even prosper, under significantly reduced budgets.
The new, post-election reality of a declining Department of Defense (DOD) budget was signaled by a conglomeration of mainstream think tank pundits, Capitol Hill staffers from both political parties, industry and executive branch defense specialists, and retired military officers put together by the Center for Strategic and Budgetary Assessments: They opined on not whether the defense budget was about to decline significantly but on how to do it. (Some of them had some pretty horrible ideas; more on that later.) The new reality of less money for DOD was also made clear in a provocative summary of five different think tanks reports at Foreign Policy by Gordon Adams.
The emerging view on the dimension of the coming DOD cuts, summarized by Adams, is they will be substantial, perhaps "as much as another $500 billion below the 10-year forecast Secretary Panetta offered last February -- making the overall reduction, including his budget request, at least $1 trillion." These new cuts will not be the automatic, across the board ones scheduled by Congress in the Budget Control Act of 2011, now known as sequestration, but instead will be more gradually implemented and perhaps even lower, ultimately, than those programmed in the sequester.
To meet the clamor for plans, multiple think tanks are putting out their cut lists, and many of them are also specifying goodies to protect: Anything with the words "cyber security" or "unmanned" top those lists. The authors mostly seem to assume that it is reasonable to prepare for an austere Pentagon by simply eliminating and/or paring back a selection of programs and to dial back, perhaps a little, national strategy. They are doing little more than maneuvering over what is on and off the cut lists and how to wordsmith the next White House declaration of national security strategy.
They are laying the groundwork for the same Pentagon as the one we have now, just at somewhat lower spending levels with several fewer programs -- and more of the remaining ones funded at unrealistically lower levels than usual.
All through the George W. Bush and first Obama terms, we witnessed dramatic growth in the Pentagon's "base" budget, adding about $1 trillion to planned DOD spending for non-war basics -- that is not including the additional monies spent on the wars in Iraq and Afghanistan. With 44 percent more money, the Navy's fleet shrank by ten percent; with a budget 43 percent larger, the Air Force's air combat fleet shrank 51 percent. And, in both cases, their equipment inventories became older, not modernized. The Army grew by a grand total of two brigade combat teams as its base budget grew 53 percent in real terms.
How on earth is a Pentagon that permits most of its forces to shrink and age with increased budgets going to be a healthy asset for national defense with smaller budgets? All the negative trends will accelerate: the shrinking, the aging, the underfunding for training and readiness, and much more at increased cost -- unless three simple but fundamental things change in the Pentagon.
The needed changes involve coming to 1) understand what the Pentagon does with its money, 2) put the health of the combat forces, people, and equipment above all other considerations, and 3) have DOD leadership that effectively insists on the first two things.
Sometimes it is the simplest things that are the hardest to do.
Today, the Pentagon does not know how it spends its money; neither does anyone else. As the Government Accountability Office, DOD's Inspector General, and even Congress have reported for decades, the Pentagon cannot pass an audit. It is not just a question of satisfying a pedantic desire for tracking pennies. Today, the Pentagon does not reliably know if it has paid contractors once, twice, or not at all: we rely on those friendly contractors to tell us if there is a problem. We don't have a provable record of where all the ships, tanks, aircraft, and all other equipment are, and which items need what repair parts -- a real problem, for example, in Afghanistan. We never get audits of any of the Pentagon's 83 Major Defense Acquisition Programs, which according the last tabulation cost $1.618 trillion -- itself an unverifiable estimate.
Twenty-two years ago in the Chief Financial Officers Act of 1990, Congress required the Pentagon to clean up its financial management act; it has yet to comply. There is a plan to fix some, but not all, of this: by 2014, the Pentagon says it will have an auditable record of its incoming budget resources, and in 2017 it promises to have an accurate count of all its physical assets. It should not surprise you that DOD has slipped its previous deadlines for these, which constitute watered down goals, and that the DOD Inspector General has real doubt the 2014 deadline will be met.
How can you responsibly save money if you don't know where it came from, where it went, and what it did when it got there? How can you effect the unending proposals to reduce overhead, bloat, waste, fraud, and abuse if you don't know where it is, how much of it is there, or even what it is? In Washington, none of that is needed: It's much more important to be a player with a plan.
It's not just that we don't know what programs and policies in the Pentagon actually cost, we don't seem to care how well the weapons work or whether the battle-readiness of our forces is going forwards or backwards.
Accept or reject, as you please, the arguments I and others make about what we regard as ineffective weapons at unaffordable prices; that is not the point. What is indisputable is that the Pentagon's leadership commits to their purchase and buys prolific numbers of them before any battlefield-realistic testing is even begun, let alone finished. Pick an example from DOD's list of major weapons programs. Try to find a single one where large-scale production did not precede the operational testing. The F-35 Joint Strike Fighter is a compelling example: over 350 will be purchased before the operational testing starts in 2017; it will be over 500 when that testing, the empirical basis for a competent, ethical production decision, will finish its initial stages. Don't be distracted by all the failures already uncovered by the F-35 flight testing to date -- that's just the "developmental," or laboratory, testing. The rigorous part -- and plenty more horror stories -- are yet to come. Think the Navy is any different? It and Congress are rushing ahead to buy 20 of the 55 planned Littoral Combat Ships while the program still has a long way to go to finish its preliminary, developmental testing.
They call this acquisition behavior "concurrency," and my favorite, "spiral development," but it is really what one DOD manager called "acquisition malpractice;" better to call it gross incompetence, if you don't want to address the broken ethics of it all.
Similar perverse thoughtlessness pervades even more important issues, such as the readiness of our forces to fight and otherwise perform their missions. In 2010, the Navy, to its credit, completed a blistering review of the readiness of its surface fleet. The Balisle Report found ship maintenance went underfunded and had been declining for years; fewer than one-half of deployed combat aircraft are fully mission capable at any given time; training throughout the surface fleet has been inadequate; and ships are routinely undermanned and cannibalized for parts to keep others running. The fleet was in substantially worse shape than it was in 2001. GAO found several of the same problems. Even one of the Navy's biggest stalwarts, Congressman Randy Forbes (R-VA), reported in 2012, "The Readiness trends for full mission capability rates suggest less than satisfactory performance." And yet, that new CSBA report mentioned above came to the remarkable conclusion that readiness is so high throughout the military services that money can be shifted from those spending accounts "with little risk" to free up cash to buy hardware. (Whether that hardware should actually be realistically tested before it is bought is an idea that seems to have escaped the report authors' purview.) Nonetheless, the CSBA report is sure to be taken most seriously in Washington; it gives decision-makers an easy out for keeping hardware programs -- and their multiple constituencies in the Pentagon, industry, Congress, the press, and think tanks -- fat and happy.
Putting hardware through the testing wringer on a schedule that makes a difference, refusing to cheat maintenance and training to maintain forces ready to fight, and insisting on knowing what things cost -- along with where all the rest of the money went -- are fundamentally important things that don't typically happen in today's Pentagon.
Acute awareness of such matters should be the acid test for who should replace Secretary of Defense Leon Panetta when he leaves the Pentagon in 2013. That is not going to happen; given the names reported to be under consideration in the White House, the issues raised here are very clearly quite irrelevant.
Four names are reported to be at play; all four fail my criteria badly. Two of the names are senators, John Kerry, the current Democratic Chairman of the Senate Foreign Relations Committee (from Massachusetts) and Chuck Hagel, the retired Republican senator from Nebraska, who was also a member of the Foreign Relations Committee. Both are veterans of the Vietnam War, but as senators neither has evidenced serious interest in DOD issues and certainly not at the nuts and bolts level where knowledge and toughness are so clearly needed. Indeed, as politicians, both are the kind of individual that the Pentagon bureaucracy loves to have at the very top: having lived professional political lives, they are all too frequently satisfied to subsist at an extremely superficial level of knowledge on the kinds of questions that cost billions of dollars in the Pentagon. The bureaucracy has a term for these people when they come to DOD: "mushrooms," and as they say, "we keep them in the dark and feed them bulls-t." As long term denizens of the Senate Foreign Relations Committee, either Kerry or Hagel can be presumed to have the knowledge base to operate as Secretary of State, but in the Pentagon, they will be little more than potted plants as the bureaucracy runs circles around them.
Another widely reported candidate to be SecDef is Michèle Flournoy, the founder of the Center for a New American Security (CNAS) and a recently retired undersecretary of defense for policy. Showing herself to be intelligent and articulate on policy issues in, for example, congressional hearings where she handles superficially informed and politically driven questions quite easily, she too is more than out of her element as the master of the Pentagon bureaucracy on the kinds of issues addressed here. She made that all too clear as the driving force behind DOD's 2010 Quadrennial Defense Review (QDR), which was supposed to be a top-to-bottom review of Pentagon strategy, programs, and policy. Chuck Spinney, a Pentagon veteran who is more than well informed on these kinds of nuts and bolts issues, wrote a devastating critique of that same 2010 QDR, which evidenced its authors to be quite oblivious to the core issues.
One might think that people like Kerry, Hagel, or Flournoy can compensate for their absence of meaningful expertise and program-related bureaucratic skill in the Pentagon by appointing people below them who are. Unfortunately, they each have a well-documented track record of not doing that, instead selecting staff that reflect their own background and outlook, rather than compensate for their weaknesses. I and others have known many of the people with whom they each surround themselves; my lack of optimism on this dimension is experience-based.
Lastly, Ashton Carter, the sitting deputy secretary of defense who has worked in the Pentagon for years, is also reported as a candidate to succeed Leon Panetta. Finally, you might say, a master of the Pentagon bureaucracy. Unfortunately, that very clearly is not the case; he is more a product of Pentagon bureaucratic behavior than the master of it. As the man in charge of the acquisition bureaucracy in his previous job as undersecretary for acquisition, technology, and logistics, and as the top administrator as deputy secretary, Carter has been the one who has laid before Congress and the public the various plans that retain the fundamentally concurrent nature of F-35 and Littoral Combat Ship acquisition plans, the inadequate, overdue financial management plans, and all the rest that have added up to a shrinking, aging, less ready to fight force -- at increasing cost. Moreover, he is not one who on the inside fought the negative trends, only to have to be the one who reluctantly talks gently about them to the outside world. He has been observed up close and personal in meeting after meeting by other insiders, and the back channel reporting on his performance is not exactly heartening.
The obvious question is: Who should lead the Pentagon into the coming, extremely difficult changes that are needed to prosper in an era of lower budgets? Clearly, someone with a successful background in downsizing from the corporate world or someone from inside the Pentagon who has demonstrated mastery of the bureaucracy's perverse games is needed. These people do exist; however, for someone like myself who is frequently regarded as a gadfly by the people at the top of government on such matters, it would be the kiss of death for me to be the one floating their names.
The cuts in the defense budget are coming; they will mean an acceleration of decades-long, negative trends. Expect stunning amounts of shrinking, aging, and declining readiness throughout the force. It should not have to be this way, but it is going to be. The people who are likely to be the ones making the decisions do not operate at a level of knowledge to outsmart the mushroom farmers, and they do not have the demonstrated bureaucratic spine to face down business as usual, or even the moral courage to head in directions to which conventional wisdom in Washington is not already pointing.
Winslow T. Wheeler is director of the Straus Military Reform Project of the Center for Defense Information, which recently moved to the Project on Government Oversight. For 31 years he worked on national security issues for U.S. senators from both political parties and for the Government Accountability Office.
Director, Straus Military Reform Project, CDI at POGO, POGO
Mr. Wheeler's areas of expertise include Congress, the Defense Budget, National Security, Pentagon Reform and Weapons Systems
The goal of the Straus Military Reform Project is to secure far more effective military forces and much more ethical and professional military and civilian leadership at significantly lower budget levels.
We would like to thank Philip A. Straus Jr. and family for their generous support.