POGO Obtains DoD Memo on 20 Percent HQ Spending Cut

A July 31, 2013, memorandum from the Deputy Secretary of Defense Ashton Carter outlines Secretary of Defense Chuck Hagel’s decision to instate “a 20% cut in management headquarters spending throughout the Department of Defense (DoD).” The Project On Government Oversight was able to obtain the memo, which can be found here.

According to the memo:

The 20% cut applies to the total headquarters budgets. Total headquarters budgets include government civilian personnel who work at headquarters and associated costs including contract services, facilities, information technology, and others that support headquarters functions.

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This 20% reduction represents an additional cut, which I know will be challenging. However, in this period of additional downward pressure on defense spending, we must continue to reduce our headquarters budgets and staffing.

These reductions will likely hit staff the hardest; offices are directed to attempt to cut 20 percent of both civilian and military headquarter staff.

While the memo urges for the cuts to be “made aggressively and as soon as possible,” it also recommends a gradual implementation in which affected offices cut one-fifth of their budget each year for the next five years.

These cuts are part of the Strategic Choices and Management Review initiated by Hagel to “help ensure the Department of Defense is prepared in the face of unprecedented budget uncertainty.” His announcement comes as lawmakers battle over the creation of a deficit-reduction plan, a continuance of talks that led to March’s sequestration. If an agreement cannot be reached, $52 billion is scheduled to be cut from the 2014 DoD budget request.

But how noteworthy are these headquarters spending cuts? A DoD spokesperson stated that over the next five years, these cuts to headquarters could save the Department $1.5 to $2 billion dollars. With gargantuan budget cuts looming, Hagel needs to make more significant cuts. Twenty percent is barely a significant start; it will not make a dent in the bloated defense budget.

Additionally, it will be interesting to see whether these cuts are biased towards lower-grade employees (which is typically the trend). Hagel should also reconsider whether any legitimate reason exists for delaying the total implementation of these cuts for the five years recommended in the memo.

It is encouraging that these cuts are reducing DoD’s budget. It is unfortunate, however, that the memo recommends reducing federal civilian staff while making no similar recommendation regarding contractors. We already know the Department wastes money on contracted services; it’s time for the DoD to start focusing on that area, as well.