In May 2010, Defense Secretary Robert Gates announced he had ordered the Pentagon to conduct a top-to-bottom review of the military bureaucracy in search of at least $10 billion in annual savings.  He said, "Given America’s difficult economic circumstances and parlous fiscal condition, military spending on things large and small can and should expect closer, harsher scrutiny. The gusher has been turned off, and will stay off for a good period of time."Recently at a Pentagon press conference, Gates and Chairman of the Joint Chiefs of Staff Adm. Mike Mullen outlined the results of that review. The results, they say, will save the Department of Defense more than $150 billion over the next five years primarily by reducing overhead costs, improving business practices and culling excess or troubled programs. Further, they believe most of the resulting savings will be used by the Army, Navy, Marine Corps and Air Force to invest in high priority programs that strengthen warfighting capabilities.Gates said, "Meeting real-world requirements. Doing right by our people.  Reducing excess.  Being more efficient.  Squeezing costs.  Setting priorities and sticking to them.  Making tough choices. These are all things that we should do as a department and as a military regardless of the time and circumstance.  But they are more important than ever at a time of extreme fiscal duress, when budget pressures and scrutiny fall on all areas of government, including defense."The Army proposed $29 billion in savings over five years to include:

• Terminating the SLAMRAAM surface to air missile, and the Non-Line of Sight Launch System, the next-generation missile launcher originally conceived as part of the Future Combat Systems;
• Reducing manning by more than 1,000 positions by eliminating unneeded task forces and consolidating six installation management commands into four;
• Saving $1.4 billion in military construction costs by sustaining existing facilities; and,
• Consolidating the service’s email infrastructure and data centers.
• A Pentagon press release said the Army would use its savings to:
• Provide improved suicide prevention and substance abuse counseling for soldiers;
• Modernize its battle fleet of Abrams tanks, Bradley fighting vehicles, and Stryker wheeled vehicles;
• Accelerate fielding to the soldier level of the Army’s new tactical communications network;
• Accelerate procurement of the service’s most advanced Grey Eagle UAVs; and,
• Buy more MC-12 reconnaissance aircraft to support ground forces, and begin development of a new vertical unmanned air system to support the Army in the future.

Gates also announced that the Army would cut 27,000 soldiers from the force starting in 2015, based on the presumption of a large-scale withdrawal of U.S. forces from Afghanistan. The Kabul government has pledged to take lead responsibility for its security by the end of 2014.The Army currently has about 569,000 soldiers on active duty including a temporary increase of 22,000 that is scheduled to lapse in 2013. Gates said that the permanent rollbacks will be completed by 2016 and will save $6 billion over two years. The cuts were prompted by the country’s "dire fiscal situation."He did note the Army will still be larger – by 40,000 soldiers – than when he took over as defense secretary in December 2006.While senior military officials said they support the troop cuts, they warned against going any deeper. "Any significant additional budget cuts can almost only be met – keeping us whole, not hollowing us out – can only be met through substantial reductions in force structure, and that’s against the national security requirements that we see in the world we’re living in," Mullen told reporters.Gen. Gordon R. Sullivan, USA, Ret., president of the Association of the United States Army, is alarmed at the proposed troop cut. Sullivan said, "It is unbelievable that now – in our tenth year of combat, when the shooting has not stopped – the discussion in Washington is focused on reduction of end strength."With an average operational strength of about 700,000, the Army is just now getting back into balance as the requirements for Iraq decrease. The shortened dwell time brought about by recent commitments to both Iraq and Afghanistan seems to have been forgotten or misplaced as planners look toward the future."The total size of the Army and its three components must remain at or near this operational end strength of 700,000."Sullivan added, "We cannot retrench to our practice of downsizing the Army at the end of a period of conflict. Korea, Vietnam and the end of the Cold War reflect just such a practice. In today’s fractious era of global terrorism driven by political and religious extremism, we need to maintain and resource land forces in both end strength and structure adequate for national security and not for budget expediency."In today’s unsettled and unpredictable world, landpower is the strategic force – adaptable, flexible and present when and where needed."We should not accept that the announced Army end-strength reduction is inevitable. In this sixth decade after Korea, history enforces the need for a strong, well-trained and well-equipped Army at the right size. For today’s volunteer force, that is an operational end strength of 700,000."Also, as expected, one of the targets mentioned for savings is military health care. Gates said back in May 2010, "Health care costs are eating the Defense Department alive, rising from $19 billion a decade ago to $50 billion – roughly the entire foreign affairs and assistance budget of the State Department.  The premiums for TRICARE, the military health insurance program, have not risen since the program was founded more than a decade ago."Gates’ recent message is unchanged.  He said, "I’ve spoken about the department’s unaffordable health costs, and in particular the benefits provided to working-age retirees under the TRICARE program.  Many of these beneficiaries are employed full-time while receiving their full pensions, and often forego their employers’ health plan to remain with TRICARE. "This should not come as a surprise given that the current TRICARE enrollment fee was set in 1995 at $460 a year for the basic family plan, and has not been raised since.Adding, "During this time, insurance premiums paid by the private sector and other government workers have risen dramatically.  For example, the fees for a comparable health insurance program for federal workers costs roughly $5,000 a year. "Accordingly, with the Fiscal Year 2012 budget, we will propose reforms in the area of military health care to better manage medical cost growth and better align the department with the rest of the country. "These will include initiatives to become more efficient, as well as modest increases to TRICARE fees for working-age retirees, with fees indexed to adjust for medical inflation.  Potential savings from these initiatives could amount to nearly $7 billion over the next five years."An AUSA official said, "That’s great, except for the fact that comparing the career of those in the private sector and most government workers to career military members and families is not a sound argument given the decades of arduous service and sacrifice military members have given to their country."We will be watching closely to see just what the Defense Department means by "modest" increases. That will not be known until the president formally submits his Fiscal Year 2012 budget to Congress in mid February."Adding, "We will also be watching Congress to see what they do with the proposals." The reaction on Capitol Hill was mixed. Rep. Buck McKeon, R-Calif., the new chairman of the House Armed Services Committee, said, "These cuts are being made without any commitment to restore modest future growth, which is the only way to prevent deep reductions in force structure that will leave our military less capable and less ready to fight.  This is a dramatic shift for a nation at war and a dangerous signal from the commander in chief."I remain committed to applying more fiscal responsibility and accountability to the Department of Defense, but I will not stand idly by and watch the White House gut defense when Americans are deployed in harm’s way."However, Sen. Carl Levin, D-Mich., chairman of the Senate Armed Services Committee, came out in support of Gates and his proposals. He pledged to "discuss" the Defense Department-wide efficiency initiatives, "as part of our normal budget process."Complicating the "normal budget process" is the unfinished business left over from the 111th Congress.   The defense appropriations and military construction/VA appropriations bills, which have always been considered must-pass legislation, were left in limbo along with all of the other fiscal 2011 appropriations measures.Programs under the two bills were funded, mostly at 2010 levels, through March 4 under a continuing resolution.  This means Congress will be working on Fiscal Year 2011 bills at the same time they start working on Fiscal Year 2012 bills. "Not a very good way to do business in our opinion," an AUSA official said.