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The Affordability The Pentagon Says It Wants

The July 19 Defense News ran a commentary by DOD's Ashton Carter describing the Pentagon's efforts to achieve what he called "affordability." Those efforts, if successful, will accomplish no such thing. Six other individuals, who are affiliated with six other organizations (see below), joined with me to respond to Mr. Carter. Our piece appears in the July 26 Defense News. We recommend five essential steps to achieve the "affordability" the Pentagon says it wants—and the reform necessary to ensure our defenses are viable, rather than merely business-as-usual at lower budget levels.

Find Carter's commentary at the Defense News Web site here.

Building Affordability: 5 Steps Can Help Put Pentagon on Sustainable Path

Ashton Carter, U.S. undersecretary for acquisition, technology and logistics, wrote a July 19 commentary about "the need to restore affordability to defense spending." His were fine words, and Defense Secretary Robert Gates has taken some noteworthy steps to cancel the F-22 fighter jet and other superfluous hardware, suggest rethinking of previously unquestioned programs, and seek $102 billion in efficiency savings over five years.

However, unless these are just the first steps in a far larger program of reform, history will regard them as too little, too late.

Gates' plan to sustain 1 percent "real" growth in a defense budget already at its highest level since the end of World War II constitutes a "gusher" that has been stuck at full on, not turned off. The one thing that has been truly constrained is the size of our armed forces, now at or near their post-1946 lows.

Five essential steps are needed:

1) The first is real spending and strategic restraint.

Some members of the President's National Commission on Fiscal Responsibility and Reform, convened to contain all federal spending, apparently understand that no one department of government can beggar the others. They consider the question not to be whether to reduce defense spending, but by how much. One important proposal would freeze spending at this year's level with no adjustment for inflation—only exempting the war in Afghanistan.

Essential accompaniment is a national strategy that recognizes the atrocious cost—moral, mental and physical— of the interventionist, nation-occupying tasks the American political leadership has imposed on our armed forces.

To ensure that budget restraint means Pentagon reform, not just business as usual at lower spending levels, four other steps are necessary.

2) The DoD budget freeze proposed by Sen. Tom Coburn, R-Okla., would hold spending unless and until all components and programs in the Pentagon have passed complete audits for finances, cost and performance. Twenty years have passed since the Chief Financial Officers Act of 1990 required minimal financial management integrity; the Pentagon has not fulfilled even that initial requirement, and the current plan to achieve a modest level of audit readiness by 2017 for some elements of DoD spending is inadequate.

Time and patience have run out. It will be impossible to intelligently select savings without knowing precisely how all programs and policies spend our resources. You cannot reform what you cannot measure.

3) Next, as is well known, DoD's pay and benefits system is unaffordable. Since the mid-1990s, Congress has increased spending by hundreds of billions of dollars for higher military pensions, concurrent pensions and disability payments, arbitrary military and civilian pay raises, and hugely generous health care and family benefits plans. The nation's everlasting appreciation for the real sacrifices of war veterans and their families justifies these expenses, especially now, but altogether, they are not affordable.

They also constitute a "third rail" that no politician will touch. Accordingly, an extraordinary panel should compose a comprehensive DoD pay and benefits package that fits into the constrained budget plan addressed here. The panel should have special powers to propose a plan that the president and Congress must act on.

4) Next, DoD needs a scrupulously independent review of all hardware. We reject the notion of some that the purpose of reducing spending on people is to increase spending on hardware. The department's spending path for weapons is just as unaffordable as for pay and benefits.

Study after study—most recently "Debt, Deficits, and Defense: A Way Forward," commissioned by Rep. Barney Frank, D-Mass.—have shown the department still has a long way to go to unburden itself of all overpriced, underperforming, unsupportable and marginally relevant hardware programs.

Another special panel should fit hardware costs into the newly constrained budget path. To make credible recommendations to the secretary of defense, it must be free of any taint of vested interest. No panel member should have any connection with a defense manufacturer, consulting or investing firm, or any other entity that receives Defense Department or defense contractor support.

5) Finally, for decades the defense community has implemented innumerable Pentagon reforms. The most recent is the Weapon System Acquisition Reform Act of 2009. After all of their work, the Government Accountability Office has measured major hardware cost growth as larger now than ever before.

The dominant reason for the failure of these efforts is the persistent insertion and assiduous exploitation of loopholes in the laws and regulations intended to foster defense reform. For example, a cost estimating shop stated to be "independent" cannot be sovereign and autonomous if it is inserted into the line of the department's acquisition bureaucracy. A requirement to procure weapons based on competitive prototype fly-offs can only work if the requirement is observed routinely, not waived routinely.

The spending path the Pentagon is now on is unsustainable and will not, in fact, be sustained. Top Defense Department managers and most of Congress have until now been looking for ways to sustain business as usual, not seek fundamental reform. To continue on that path only means more decay in our forces at ever-increasing cost.