Gates plans cuts to save $100 billion over 5 years 

10/1/2010 

Secretary Robert Gates said he plans to eliminate Joint Forces Command, reduce the number of generals and admirals by 50 and senior executive service civilians by 150, cut thousands of jobs of outside contractors working for the Defense Department and ordered a three-year freeze on the number of senior positions in the Office of the Secretary of Defense, defense agencies and combatant commands.

Gates sees this as the first step in saving $100 billion in the next five years.

In making the announcement Aug. 9, he said, "I believe that sustaining the current force structure and making needed investments in modernization will require annual real growth of 2 (percent) to 3 percent, which is 1 (percent) to 2 percent above current top-line budget projections. Therefore, in order to preclude reductions in military capabilities that America needs today and those required for the future, that spending difference will need to be made up elsewhere in the department."

Adding, "Unlike budget cutting efforts of the past, the services will be able to keep the savings they generate to reinvest in higher-priority warfighting needs and modernization programs." 

On eliminating the major command in Norfolk, Gates said, "Training joint forces, generating joint forces, creating joint doctrine and experimenting with that doctrine are all valuable tasks. However, they do not necessarily require a separate four-star combatant command which, in the case of JFCOM, entails about 2,800 military and civilian positions and roughly 3,000 contractors of all kinds, at an annual cost of a least $240 million to operate. I’m recommending the closure of JFCOM and the assignment of its force-management and sourcing functions to the joint staff."

In answer to a question, Gates said Gen. Raymond Odierno, recently confirmed as Joint Forces Command’s commanding general, would draw down the command then move to another position. "I expect that it will take about a year to carry out this change, and I’ve told Ray that his assignment at JFCOM is essentially the same – been the same as his assignment in Iraq, and that is to work himself out of a job. And then I’ll find a new – a new and better one for him." 

Instead of eliminating contractor positions, Gates said the plan is to cut spending by 10 percent per year over the next three years on contracting to speed the process.

Gates said the department would continue to use contractors in Afghanistan and Iraq where they are engaged in food services, transportation and installation maintenance.

"If you were to graph the defense budget going back the last 40 or 50 years, it would look like the EKG of a fibrillating heart.  What we need is modest, sustainable growth over a prolonged period of time that allows us to make sensible investment decisions and not have these giant increases and giant decreases that make efficiency and doing acquisition in a sensible way almost impossible," he said.   

  For the future, Gates said,   "I think it’s safe to say that, as far as I’m concerned, in this effort there are no sacred cows, and health care cannot be excepted from that.  Everybody knows that we’re being eaten alive by health care.

"It cost us $19 billion in 2000 or 2001.  It’ll cost us over $50 billion in FY ‘11.  And will cost us about $65 billion in FY ‘15.  And particularly when the top line is only growing at a percent or thereabouts, it’s unsustainable, and therefore it has to be a part of our effort." 

He said that he expected Congress to approve the moves because it demonstrates the department’s intention to take the lead in cutting overhead costs and applying the savings to more urgent needs in tough economic times.

Rep. Ike Skelton, D-Mo., chairman of the House Armed Services Committee, said in a release, "Secretary Gates has proposed a number of steps that appear to efficiently find savings within the defense budget without taking away resources from our warfighters."

But ranking member Howard P. McKeon, R-Calif., expressed concern about whether the savings would stay in defense or be used for domestic programs.

Gates said about keeping the funds in the department would not be easy, but "hard is not impossible."

The Defense Department’s budget request for Fiscal Year 2011 is $548.9 billion in base budget and $159.3 billion for military operations in Afghanistan and Iraq.