Defense budget: to cut $100 billion, Army and Marines will shrink

The Pentagon budget, rolled out Thursday, is the realization of a warning Defense Secretary Robert Gates issued shortly after America’s economy took a turn for the worse – that the “culture of endless money” created in the booming post-9/11 defense budget would soon be coming to an end.

It is also the Pentagon’s bid to preempt even larger cuts from the White House or Congress, which were expected if the military did not curtail what Mr. Gates Thursday called the department’s often “wasteful, excessive, and unneeded spending.”

At $553 billion, the budget is some $13 billion less than the Pentagon expected for 2012, says Gates, but still represents 3 percent growth over fiscal year 2011, and the Pentagon remains the largest single spender of federal dollars.

Indeed it’s all relative. While the Pentagon has identified $178 billion in cuts for the five years from fiscal year 2012 to 2016, it plans to reinvest about $100 billion of that into its own services, leaving the remainder for deficit reduction. Overall, the defense budget – which does not including the costs of the wars in Iraq and Afghanistan – will continue to increase until 2015, when it flattens.

Cuts to Army and Marines – after 2014

The 2015 cuts will include shrinking the size of the US Army and Marine Corps. The 2015 date is significant. Afghan forces are to assume responsibility for security in their country in 2014 – presumably allowing US forces to depart in large numbers. This is expected to save the Defense Department roughly $6 billion over the course of the five-year budget plan.

Cuts proposed for this fiscal year are likely to include programs that the services hold dear, including the Marine Corps' Expeditionary Fighting Vehicle, a high-speed landing craft conceived during the Reagan administration and plagued with cost overruns.

Some cuts may face stiff opposition in Congress, such as a proposal to increase premiums among military retirees for Tricare, the Pentagon’s health-care program. Defense officials point out that premiums have not increased since 1995, when they were set at some $490 per year for a family of four. Nonetheless, it is a politically unpopular move that has been repeatedly rejected on Capitol Hill.

Other moves include:

• The Pentagon will also cut down on the use of contractors, on which the Defense Department has become “far too dependent,” says Gates.

• The budget proposes dramatically cutting and consolidating what Gates calls the “sprawling” network of intelligence organizations.

• It also freezes the salaries of civilian Defense Department employees and eliminates some 100 general officer positions created after 9/11.

While the reductions in these senior personnel will be relatively modest, Gates concedes, the cuts are significant because such positions are traditionally accompanied by amenities, and the elimination of the positions will help to create “flatter, more agile” organizations.

Gates's carrot

To help motivate the services, Gates challenged them to find $100 billion in cuts, which they could then reinvest into their branches or use to pay unexpected bills.

The Army, for example, proposed roughly $29 billion in cuts, which it will use, among other things, to expand suicide-prevention and substance-abuse programs, as well as to buy more armored vehicles and unmanned drones like the Predator and Reaper.

The Air Force will use its projected $34 in savings to develop a long-range nuclear penetrating bomber, a project that Gates had earlier put on hold due to the costs of the current wars.

The Navy, for its part, will continue to work on a new generation of electronic jammers and a line of unmanned sea craft.

The military must also still pay off some unexpected costs overruns, including the cost of fuel, health care, and the repair of equipment that has been heavily worn by the wars in Iraq and Afghanistan.

Pentagon officials warned that while they can take flat budgets in 2015 and 2016, they would like to see a return to at least 2 or 3 percent growth after that. Gates argued that the Pentagon’s proposed budget represents the “minimum level of defense spending necessary” given the threats that the United States faces around the globe, and that drastic reduction in the American defense budget would make armed conflict “more likely.”

That said, he added that the Pentagon “cannot presume to exempt itself” from budget cuts in the face of the “extreme fiscal duress” the United States currently faces. “Not every defense dollar,” he said, “is sacred and well spent.”