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Five ways to save money at the Pentagon
By William D. Hartung - 2015-02-05 12:00:02 PM ET

The Obama administration’s budget proposal for FY 2016 is $35 billion higher than the caps set out in current law.  Over the next decade the mismatch between what the Pentagon wishes it had and what it is likely to get is even greater.  Something will have to give.  There are at least five ways the Pentagon’s proposal can be brought into line with budgetary reality.

First, the Department of Defense should scale back the overpriced, underperforming F-35 combat aircraft. At $1.5 trillion to build and operate over its lifetime, the F-35 combat aircraft is the most expensive weapons program ever undertaken by the Pentagon.  Scaling back or canceling the program could save tens of billions of dollars over the next decade.

The F-35 program was doomed from the start because the Pentagon is expecting one plane to do too many different things.  The same plane can’t be a bomber, a close air support system, a fighter plane that can operate from the ground or land on an aircraft carrier, and a vertical-takeoff-and-landing aircraft to serve the needs of the Marines.  By trying to do everything, the F-35 will do none of its missions well.  In many cases it is likely to be inferior to existing aircraft at particular tasks, like close air support for troops on the ground, where the existing A-10 can do a far better job at a fraction of the price.

For its part, the Navy wants to buy 12 new ballistic missile submarines at a cost of at least $100 billion.  It is one of the most expensive components of an unaffordable plan to modernize the entire nuclear arsenal at a cost of $1 trillion dollars between now and the mid-2030s.  An analysis by the Arms Control Association has found that the Navy can scale back from 12 new ballistic missile subs to 8 while preserving the same number of targetable warheads.  Doing so would save $16 billion in this decade.

Unfortunately, rather than facing  the fact that its shipbuilding plans can’t possibly fit into its projected shipbuilding budgets over the next two decades, the Navy has pressed for a separate “Sea-Based Deterrence Fund” outside the Navy budget to pay for the 12 new ballistic missile subs.  But this is just a budget gimmick.  It distracts from making tough, smart budgetary choices. Congress should reject it.

Military compensation, especially military health care costs, has been the fastest growing part of the Pentagon budget in the 2000s.  Last week a commission on military compensation reform made suggestions for changes in military pensions and military health care that could save $30 billion over the next five years.  Congress should carefully review the commission’s recommendations with any eye towards implementing the best elements of their report.

One of the biggest potential sources of savings in the Pentagon budget is reducing its massive bureaucracy, or what former White House budget analyst Gordon Adams refers to as the Pentagon’s “back office.”  The back offices consist of personnel who are not part of the fighting force.  The Pentagon currently has 800,000 civilian employees, and an estimated 700,000 contractor employees, along with over 300,000 military personnel who are engaged in civilian or commercial activities.  Yet this year’s budget calls for a reduction just 3,500 Pentagon civilians. Much more can be done in this area.

Over the past few years the Pentagon and the Congress have used the war budget – known formally as the Overseas Contingency Operations account, or OCO --as a slush fund to pay for items that have nothing to do with fighting wars, to the tune of $20 to $30 billion in excess spending per year.  Using OCO as a slush fund is the ultimate budget gimmick.  It seriously undermines any effort to reduce the deficit or stem the rate of growth of the federal budget.  Congress should move toward eliminating the “slush” from OCO and making it what it was meant to be – an emergency fund to be used only in the event of war.  One place to start would be to require a detailed accounting of how OCO funds have been spent over the past several years.

Before the Pentagon is allowed to bust the budget caps, sensible measures like the ones outlined here should be implemented.

Hartung is the director of the Arms and Security Project at the Center for International Policy.

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