Pentagon aims to find $100B in savings

The Pentagon leadership has started a sweeping effort to free up about $100 billion over the next five years to maintain current fighting forces and to modernize weapons systems.

Deputy Secretary of Defense William Lynn on Friday said the goal is to find more savings within the defense budget without cutting the top-line number. Pentagon leaders are eying 2 to 3 percent real growth in the Pentagon’s budget for the areas that need it most: force structure and modernization, Lynn told reporters at a Pentagon briefing Friday.

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Not including war funds for Afghanistan and Iraq, the Obama administration requested $548.9 billion for fiscal 2011. The White House has told the Pentagon to expect a growth of about one percent in the budget over the next several years.

But Lynn said that based on past experience about 2 to 3 percent real growth would be necessary to “give the troops what they need to do their very best.”

Two-thirds of the $100 billion cost savings spread out over the next five years will come from trimming overhead on a department-wide basis. That money will be directly transferred into the force structure and modernization accounts, Lynn explained.

The rest of the cost savings would come from “developing efficiencies within those force structure and modernization accounts,” he added.

“If we're able to reduce overhead accounts where we don't need those increases, shift it to the force structure and modernization accounts, we can get that 2 to 3 percent [real growth] and we can do what we think we need to do in technology refresh, modernization, protecting quality of life and all those critical factors.”

Lynn warned that in order to get to the $100 billion in savings the Pentagon leadership and the military services will have to identify “lower priority programs” that are not going to be part of future budgets.

The departments of the Army, Air Force and Navy, which also includes the Marine Corps, as well as the combatant commands are expected to report their savings proposals by July 31 as the Pentagon prepares its budget request for Congress.

For example, the military departments are each expected to find $2 billion non-essential costs for fiscal 2012. In turn, the services would be able to transfer those savings to their modernization efforts and their forces.

Lynn on Friday basically fleshed out Defense Secretary Robert Gates’s major initiative to reduce Pentagon bloat and scrutinize the defense budget. Gates unveiled his initiative in a major speech last month at the Eisenhower Library in Abilene, Kan.

“The secretary very much wants to get started early and establish momentum for this,” Lynn said on Friday. “So I think you will see decisions over the course of the summer and the fall, at least to start down the path of overhead reductions and efficiency savings.”

Lynn also said President Barack Obama and the director of the Office of Management and Budget are strongly backing the cost savings initiatives.