Law is law. US Secretary of Defense outlines possible ways to cut costs
At a briefing at the Pentagon Press Center, US Secretary of Defense Chuck Hagel told US media about the likely directions for reducing the military budget in the next 10 years. They were formulated in a document prepared by the IO experts called the Strategic Choices and Management Review (SCMR). As Hagel told reporters, before meeting with them this morning, he had already informed the chairmen of all the leading Congress committees about the results of the analysis of military spending and the proposed ways to reduce them. PROCESS OF CREATING AND APPOINTING A REVIEW
The review was prepared by order of the Minister, which he gave to 15 in March of this year. In accordance with the instructions, the deputies of Hagel, the ministers of the Armed Forces, the chairman of the JCS and his deputy, the commanders of the joint and special commands, and the heads of the independent departments of the MoD took part in the development of this document. These high-ranking military leaders created 11 working groups and several dozen subgroups, which included experts in various areas of military construction. Directly, the process of conducting financial and strategic assessments was headed by the Deputy Minister of War Ashton Carter, who worked closely with OKNSH Chairman Martin Dempsey.
The scope and structure of this document, since it is not publicly available, is unknown. But, according to the minister, the review was developed for almost four months and was created so that the Pentagon leaders would be prepared to meet the "unprecedented uncertainty of the military budget." He also noted that the Ministry of Defense fully supports the figures indicated in the President’s request for appropriations for the next fiscal year, and the long-term plan for reducing federal expenditures in the military sphere. According to Hagel, the substantial cuts in the federal budget, including defense spending, from March this year with the force of law, takes place in the absence of agreed legal norms that could replace the Law on Budget Control. The minister said that the process of reducing defense expenditures will continue under the same conditions.
The main objectives of the review were to achieve an understanding of how future cuts in the US military would affect and develop approaches to preserve their combat effectiveness in a similar financial situation. In this case, this document provided for the need to solve three well-defined tasks. First, the results of the work of analysts, who conducted a thorough analysis of the feasibility of spending every cent allocated for military needs, should help the Defense Ministry in finding ways to overcome the financial difficulties in the 2014 fiscal year, if the sequestration continues. Secondly, the ministries of the Armed Forces species should have received specific instructions on the development of their financial plans for the 2015 – 2019 financial years. And, thirdly, the conclusions and recommendations of the specialists should have been reflected in the Quadrennial Defense Review, which is currently being developed. This document will contain assessments of the US military strategy in the face of new financial realities, the growing number of military threats, and the difficulties and uncertainties that America will face in this century.
PRINCIPLES AND SCENARIOS OF THE SEQUESTRA
As the Minister of War announced, the basis of the developed document was four fundamental principles. First, the priority was set for the tasks and capabilities of the Armed Forces to ensure the defense capability of the United States. Secondly, such areas of allocations to the Pentagon were considered, the withdrawal of funds from which does not affect the reduction in the combat power of the troops. Thirdly, while reducing defense expenditures, it is necessary to ensure not only the preservation of the achieved level of combat readiness of the troops, but also its growth. Fourthly, cuts in the military budget should not affect the social and material well-being of servicemen and their families.
As a result of following these principles, Pentagon experts developed a number of proposals for savings, including increasing the efficiency of all levels of command, reducing unnecessary costs, reforming the payroll system for military personnel and civilian personnel of the Armed Forces, changing the structure of troops and modernizing weapons and military equipment.
As Hagel emphasized, SCMR is not a formal guide for all officials of the MoD, which must be enforced. Such a task was not set to its compilers. It simply includes a number of proposals, rather than strictly formulated solutions. Analysts have considered several possible options for reducing military spending.
The first scenario of cost reduction MO is detailed and balanced in the budget application of President Barack Obama on the 2014 fiscal year. Fulfilling all the wishes of the head of the White House will allow the Pentagon to reduce its costs of 10 billion in the coming 150 years.
In the second scenario, meeting the requirements for the marginal rates of reduction of military spending established by the Law on Expenditure Control will reduce the military budget for next year by another 52 billion. And for 10 years, the Defense Ministry can save 500 billion.
In accordance with the measures envisaged by the third scenario, which experts call intermediate, for years 10 MO will be able to reduce their expenditures only by 250 billion dollars. At the same time, financial resources will be saved to some extent by reducing allocations for programs implemented by other departments, but having defense value.
Hagel stressed that all the options for reducing defense expenditures proposed in the review are additional. At present, the Pentagon is strictly fulfilling the requirements to reduce its budget in the next 10 years by 487 billion, which are set out in the Law on Budget Control of the 2011 of the year, and are taking the necessary steps in this direction. While maintaining the norms of sequestration of defense expenditures, the Defense Ministry in the coming decade as a whole will be able to reduce its costs by almost 1 trillion. dollars, announced the Minister.
In SCMR, the military department presented the results of a detailed study of all possible ways to implement these scenarios so that the heads of various military structures, receiving allocations from the federal treasury, could choose the best methods to reduce their expenses while fulfilling the requirements of the military strategy. The experts examined areas of military construction, such as planning the size and development of the Armed Forces structure, doing business with contractors, maintaining personnel and defense personnel, managing weapons and military equipment development and procurement programs, and implementing programs for developing, purchasing and modernizing existing weapons.
ANALYTIC OFFERS
Over the past few years, the leaders of the Ministry of Defense have given paramount importance to increasing the efficiency of administrative management and reducing unjustified expenses in this area. Former Secretary of Defense Robert Gates developed a five-year plan to reduce this type of military spending. Leon Panetta, who replaced him, added another 60 billion to this amount. And the savings in administrative expenses in accordance with the latest budget of the Ministry of Defense should increase by another 34 billion dollars.
Currently, MoD continues to carry out activities to improve the efficiency of the administrative management system. However, as Hagel said, despite some progress in this area, not all proposals of the Defense Ministry brought the expected savings, and some of them, and above all the proposal to restructure and close military bases in the United States, were not approved by Congress. .
According to the minister, the review showed that the Pentagon has far from exhausted its ability to increase the efficiency of administrative management and reduce this type of its expenses and can still do a lot in this area. Although every year it becomes more difficult to achieve savings in administrative funds, and the implementation of measures in this area, which can lead to a significant reduction in costs, can take quite a long time. Hagel stressed that after studying the proposals of specialists, he realized that the implementation of measures to improve the efficiency of management structures should continue, regardless of any financial circumstances. And in the end, this can provide substantial savings in the financial means required by the MoD.
As the main areas of action of the Pentagon in this area, the Minister of War called the reduction in the number of administrative personnel of the Defense Ministry, the ministries of the Armed Forces, the military commando staff, staffs of joint and special commands, independent departments of the Defense Ministry and administrative structures in the army. In addition to reducing the number of hardware and commanding staff of the Defense Ministry, it is planned to reduce the size of the structures involved in the collection, processing and analysis of intelligence data in the field by combining the functions of managers of various levels of management.
The head of the Ministry of Defense said that in dollar terms this would be 20%. The number of military and civilian personnel employed in this field will also be reduced by 20%. As a result of all these measures, according to specialists, the military department will be able to save about 10 billion in the next five years. In 10 years, this amount will reach 40 billion.
In addition to the proposed measures, the minister noted, the drafters of the document presented to him considered a number of activities involving the unification of regional military commands, reducing the number of tasks solved by the Defense Ministry, and further consolidating the systems and means of automated control of the Armed Forces.
Such measures during 10 will allow MOs to reduce only 60 billions of dollars, which, as Hagel announced, is a very small part of the total ministerial spending cuts established by the sequestration law. Therefore, its specialists will need to explore other ways to achieve the necessary financial savings in these areas.
He also noted that the review does not envisage any serious measures to reduce the allowances of military personnel and civilian personnel and the benefits provided to these categories of Defense Ministry personnel. But these types of payments make up about half of the military budget, and therefore experts could not ignore this area of financial expenses of the Pentagon.
In general, since 2001, MO expenditures for this item of the military budget increased by 40%, not including annual supplements providing for compensation for the growth of inflation. But in modern conditions, the defense ministry cannot afford a similar rate of growth of this type of cost. Therefore, the president’s request for the next fiscal year does not provide for a sufficiently substantial increase in the monetary support of the Armed Forces and employees of the Armed Forces, as well as the benefits provided to them and their families.
In the compiled review, it is proposed to increase in fairly modest amounts payments for medical care to military pensioners of working age and their household members. Such retirees are invited, when possible, to use health insurance provided by their employers.
PENTAGON SAVE ON SQUARE-FREE AND PENSIONERS
The dogs of war would like to keep the budget of the US military in the same amount
Analysts believe that in the future it is necessary to change to some extent the formulas for calculating compensation paid to servicemen for rental housing, and somewhat increase their own expenses for these purposes.
They also propose to reduce payments to soldiers and officers serving outside the United States, as well as to a certain extent, to reduce the rate of increase in the salaries of servicemen and the salaries of civilian personnel of the Defense Ministry. There are other suggestions in this area.
The Minister of Defense noted that currently the Pentagon does not plan to introduce any changes in the procedure for payment of military labor. He said that he had instructed the Chief Executive Officer to lead a more detailed review of the proposals of reviewers, who believe that in this area 10 can reduce military spending on 50 billion dollars in 2015 years. Under his leadership, the ministers of the Armed Forces and their advisers should prepare a package of such proposals which will allow to keep in the troops highly qualified military specialists and to recruit new professionals in the required quantity. Implementation of the proposals of this group of experts is scheduled to begin in the XNUMX fiscal year. Hagel also said that a high-ranking military experts would conduct a similar study in the field of studying the salaries and benefits of the civilian staff of his ministry.
The head of the Pentagon said that the review examined the possibilities for reducing the military budget for 100 billion dollars over 10 years. This can be done by reducing the size of pensions to retirees who are moving to serve in federal structures, ceasing the issuance of grants to recruitment points for military personnel and reducing benefits paid to unemployed Americans who served in the MoD. But all these measures, as emphasized by Hagel, must be carefully evaluated in terms of the possibility of causing unacceptable damage to US national security.
However, as the leader of the military department noted, all the measures listed above would reduce the budget by only 100 – 150 billion. Therefore, the military experts reviewed other areas of military construction and suggested additional measures that could bring this figure to 500 billion. as required by sequestration law.
The reviewers also studied options for reducing the military budget by changing the size and structure of the Armed Forces and modernizing IWT. At the same time, in accordance with the instructions of the Pentagon leadership, the capabilities of the troops to ensure US national security, address strategic and current tasks and conduct activities to expand America’s military presence in the Asia-Pacific region should remain at the same level and even increase.
Analysts came to the conclusion that in order to save money, the Ministry of Defense does not need to proportionally reduce the number of all types of aircraft. It can significantly reduce the number and size of SV and tactical units aviation. But at the same time, his leadership has all the necessary capabilities to maintain the combat readiness of the troops and the ability to solve all the tasks facing them now and in the future.
The Minister of Defense said that his department does not yet have any specific program to change the structure of the Armed Forces and that making final decisions on this issue will require additional research. However, due to the end of the war in Iraq, with the impending withdrawal of troops from Afghanistan and the reduction in the need for large-scale operations, according to one of the expert scenarios, the Pentagon can reduce the combat troops of the Ground Forces to 420 – 450 thousand people. The number of reserve components of this type of aircraft can be reduced to 490 – 530 thousand. At the same time, the Air Force can reduce five squadrons of C-130 transport aircraft with minimal risk.
BETTER LESS, BETTER
Over the next few months, as announced by Hagel, he will be consulting with the chairman of the OKNSH and his colleagues in the ministries of the Armed Forces in order to assess the real number of troops needed by the US for solving military tasks in an increasingly dangerous world, and make a final decision on this issue .
A slight reduction in the Armed Forces, combined with an increase in the efficiency of management structures and measures to reduce the expenses for the material support of the Armed Forces personnel, can bring about $ 150 billion to the federal treasury, as required by the president’s budget application. At the same time, the troops will be fully able to defend the United States and fulfill all their obligations to the world community.
Based on the realities of modernity and the requirements for sequestration, the experts who prepared the review formulated two main approaches to reducing the number of troops and modernizing weapons and military equipment. In accordance with them, planning agencies will have the opportunity to make informed and balanced decisions on the composition of the ground forces, air force and navy, as well as on the choice of areas for the development, production and procurement of weapons and military equipment, as well as the scale of weapons modernization in order to ensure the technological superiority of American troops.
If the first of the proposed approaches were implemented, the Pentagon would have to reduce the SV to 380 – 450 thousand people, reduce the number of carrier-based attack groups from 11 to 8 – 9, reduce the number of KMP personnel to 150 – 175 thousand people and remove the outdated strategic weapons bombers. But this will allow preserving the amount of appropriations needed to counter threats from a potential enemy and prevent strikes on US territory, including the development of long-range systems and facilities, upgrading submarine-launched cruise missiles, and the creation of the F-35 fighter. In addition, in this case, the Defense Ministry will be able to preserve the priority development of the systems and means necessary for waging cyber warfare, and special forces. This approach may lead to the creation of an Armed Forces with technological superiority, but due to the insufficient number of people unable to solve a wide range of tasks, especially in conditions when crises occur in various regions of the planet.
The second approach to reducing military expenditures, proposed by analysts, involves a certain loss of the combat capabilities of the troops, but maintaining their numbers necessary for solving numerous tasks and organizing the US military presence in various countries or maintaining it at the required level. At the same time, the Pentagon will not conduct large-scale reductions of land forces, ships and aircraft. However, in this case, the Defense Ministry will have to close or reduce the funding of many programs for creating and modernizing weapons and military equipment, slow down the growth of the capabilities of the Armed Forces in the cybernetic field and curtail a number of measures to develop special forces.
For many years this could halt the process of creating and upgrading weapons, which ultimately will deprive troops of the opportunity to get into service many of the weapons and military equipment systems that are in the final stages of development and production, they may lose a certain part of their combat capability and face a technologically superior opponent. The MoD will also have to assess the extent to which such a course of action may affect the viability of defense enterprises.
As Hagel stressed, the Pentagon’s desire to provide the necessary balance of capabilities of the troops and their combat readiness in the future will determine the structure and strength of the Armed Forces. In the end, the leadership of the Defense Ministry may decide to create such aircraft, which will differ significantly from those planned at the present stage. The main task of the Ministry of Defense, according to the minister, is not informing the president about some forecast estimates, but providing him with reasonable, qualified and specific recommendations on promising areas of military construction.
The implementation of the recommendations of analysts for each of the scenarios, as the Minister noted, will allow to achieve the required level of economy of military expenditures only during 10 years from the moment of the start of the relevant activities. But in the early stages of this process, the Pentagon will not be able to reduce its spending to the required level, and its shortage to the federal treasury will reach 30 – 35 billion dollars. They can become even more if Congress does not agree with the draft budget MO on the 2014 fiscal year in areas of cuts to financial support for military and civilian personnel and proposed measures to improve the effectiveness of the Armed Forces management and reduce their number.
He also noted that the annual automatic reduction of the military budget by 10%, envisaged by sequestration, as shown by research by experts, will lead to a significant decrease in the level of combat readiness of troops and their ability to solve the current and future tasks facing them. Unlike the private sector, the Defense Ministry today simply does not know how to ensure the smooth closure of a number of military facilities, the reduction of administrative structures and the transfer of their functions to other institutions. In addition, the ministry’s leadership does not even suggest how, from a legal and moral point of view, it can break agreements with subordinate personnel and personnel and leave a huge number of specialists without work.
DIFFICULTIES AND WISHES OF THE PENTAGON
Already today, the Defense Ministry, said Hagel, faced the negative consequences of a reduction in the military budget of $ 37 billion in the current fiscal year. This includes the cancellation of all flights of a number of squadrons of the Air Force, hikes and redeployment of some Navy ships, termination of training in the Army Training Center of the Army personnel of brigades not taking part in the hostilities in Afghanistan, and sending a large number of Defense Ministry personnel on administrative leave. He also added that next year, if the sequestration continues, the military department will have to reduce its assets by 52 billion, and this will further complicate the position of the Armed Forces. Therefore, Hagel stressed, the Congress will have to assist the Defense Ministry in carrying out such large-scale and sharp reductions in military allocations. The recommendations given by the reviewers, if adopted by parliamentarians, will to some extent alleviate the position of the Armed Forces, but will not lead to the complete elimination of the difficulties that arise.
At the end of his speech, the head of the Defense Ministry said that the leaders of the United States should make the greatest possible effort to change the senseless and irresponsible policy of sequestration. Hagel stressed that sacrificing the financial interests of the well-being of military personnel who give all their strength to serving their country selflessly and their family members is unworthy of the Pentagon. He said that even in the conditions of such brutal financial realities, which are opposed by all the military, the decisions made by their leaders should always correspond to the sacrifices that the sons and daughters of America bring to the altar of the fatherland.
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