November 10, 2008 – A senior Pentagon advisory group, in a series of bluntly worded briefings, is warning President-elect Barack Obama that the Defense Department’s current budget is “not sustainable,” and he must scale back or eliminate some of the military’s most prized weapons programs.
The briefings were prepared by the Defense Business Board, an internal management oversight body. It contends that the nation’s recent financial crisis makes it imperative that the Pentagon and Congress slash some of the nation’s most costly and troubled weapons to ensure they can finance the military’s most pressing priorities.
Those include rebuilding ground forces battered by multiple tours to Iraq and Afghanistan and expanding the ranks to wage the war on terrorism.
“Business as usual is no longer an option,” according to one of the internal briefings prepared in late October for the presidential transition, copies of which were provided to the Globe. “The current and future fiscal environments facing the department demand bold action.”
The briefings do not specify which programs should be cut, but defense analysts say that prime targets would probably include the new F-35 fight er jet, a series of Navy ship programs, and a massive Army project to build a new generation of ground combat vehicles, all of which have been skyrocketing in cost and suffering long development delays.
Such cuts would affect the New England economy. General Dynamics builds warships and submarines in Maine and Connecticut, while Raytheon, Massachusetts’ largest employer, is involved in numerous weapons programs from ships to missile defenses and satellites.
Pentagon insiders and defense budget specialists say the Pentagon has been on a largely unchecked spending spree since 2001 that will prove politically difficult to curtail but nevertheless must be reined in.
“The forces arrayed against terminating defense programs are today so powerful that if you try to do that it will be like the British Army at the Somme in World War I,” said Winslow Wheeler, director of the Straus Military Reform Project at the liberal Center for Defense Information in Washington. “You will just get mowed down by the defense industry and military services’ machine guns.”
Since the Sept. 11, 2001 terrorist attacks, funding has grown for both the annual defense budget and emergency spending for the wars in Iraq and Afghanistan. The latest Pentagon budget, for the fiscal year that began Oct. 1, is an estimated $512 billion, not including more than $800 billion in additional war spending that has been allotted since 2001.
But a series of forces are now at play that make such large expenditures untenable, according to the Defense Business Board, the Pentagon oversight group, which includes about 20 private sector executives appointed by the secretary of defense.
The board, which meets at least four times a year, has a full-time staff and is an official government body. Because the board’s report has not been made public, a Pentagon spokesman would not comment on it.
One factor is historical. Since the end of World War II there have a been four periods of significant increases in US defense spending and all were followed by significant decreases in funding from Congress, the group says.
Added pressure on the Pentagon budget comes from what the briefing calls “fiscal constraint in a tough economy” that is saddled with rising deficits and growing political support for increased government spending in other areas.
“We are all acutely aware there is a financial crisis going on,” said a senior defense official closely involved in the transition process.
Exacerbating the problem, according to the advisory group, are the rising costs of military personnel, their healthcare, and overhead. The documents estimate that more than half the annual defense budget now goes to “people costs,” including $60 billion a year for the healthcare of service members and retirees.
They will almost certainly grow, even with a reduction in US troops in Iraq, given that the Pentagon has said it will increase ground forces by more than 70,000 troops over the next few years.
That leaves dozens of weapons systems and other equipment under development as prime areas for cost-savings, according to Steven Kosiak, vice president of budget studies at the nonpartisan Center for Strategic and Budgetary Assessments in Washington.
“The areas most likely to get cut are acquisition and procurement,” Kosiak said. “As long as the administration is committed to increasing troop strength you have to pay those people costs, and there is not a lot of flexibility when it comes to benefits.”
A recent analysis by the Government Accountability Office, the investigative arm of Congress, assessed the Pentagon’s 95 largest weapons programs and found that as of March 2008 they had collectively increased in cost by nearly $300 billion over initial estimates.
“None had proceeded through development while meeting the best-practice standards for mature technologies, stable design, and mature production processes all prerequisites for achieving planned cost and schedule outcomes,” the GAO said in documents published last week to help guide the presidential transition.
It added: “Over the next five years, [the Defense Department] expects to invest more than $357 billion on major defense acquisition programs. Much of this investment will be used to address cost overruns rooted in poor planning, execution, and oversight.”
All the branches of the military are in a similar situation. The Army plans to invest an estimated $160 billion in the coming years on a set of new combat vehicles collectively known as the Future Combat System. But their capabilities “are still early in development and have not yet been demonstrated,” according to GAO.
The Navy, meanwhile, has continued to bust its budget for shipbuilding. The service’s six most recent new ship designs have experienced cumulative cost growth of $2.4 billion over original estimates, according to GAO. Their delivery has also been delayed, on average, by 97 months.
The Air Force’s portfolio for new equipment, meanwhile, “will demand unprecedented levels of funding,” according to GAO’s transition materials. Its development costs have increased nearly 50 percent above original estimates and eight separate programs have had to report cost breaches to Congress.
The F-35 Joint Strike Fighter – designed for the Air Force, Navy and Marine Corps and the most costly aircraft procurement effort in history – “faces considerable risks stemming from its decision to reduce test assets and the flight-test program to pay for development and manufacturing cost increases,” according to the GAO.
Other programs suffering from big cost increases and delays include space systems such as satellites and the national missile defense system, the largest research and development program on the Pentagon’s books.
Together these programs constitute a military crisis in their own right, according to the internal Pentagon documents.
The Pentagon, one document states, “cannot reset the current force, modernize and transform in all portfolios at the same time. Choices must be made across capabilities and within systems to deliver capability at known prices within a specific period of time.”
And a few cuts here or there won’t do the trick, they add. “Taking cuts at the margin won’t work this time, nor will pushing things off to later years.”