Gates: No 'low-hanging fruit’ left for cuts

Senior Pentagon leaders on Tuesday argued against further cuts to weapons programs as lawmakers look to reduce the deficit, saying they already have trimmed the “low-hanging fruit.”

Since April 2009, Defense Secretary Robert Gates and the Obama administration have canceled or altered dozens of big-ticket military hardware programs that were deemed outdated, too costly or technically doomed. Those actions, along with a fat-trimming exercise undertaken last year, are considered to be among Gates’s top achievements as secretary. 

But in his final months on the job, Gates is arguing aggressively against defense budget cuts that would lead to the termination of any of the slate of major weapons development programs still under way.

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“When it comes to our military modernization accounts, the proverbial ‘low-hanging fruit’ — those weapons and other programs considered most questionable — have not only been plucked, they have been stomped on and crushed,” Gates said during a speech Tuesday at the American Enterprise Institute (AEI).

“What remains are much-needed capabilities,” said Gates, who plans to retire this summer.

As Washington sets its sights on paring the deficit, senior lawmakers from both political parties say cuts are ahead for all federal agencies — even the Pentagon.

“No agency will be immune from cuts,” Senate Armed Services Committee member Saxby Chambliss (R-Ga.) said Tuesday. “DOD is in the same boat as other federal agencies.”

But Gates said for the U.S. military to retain its lethal punch, programs “relating to air superiority and mobility, long-range strike, nuclear deterrence, maritime access, space and cyberwarfare, intelligence, surveillance and reconnaissance” must be preserved. He later added to that list a new tanker aircraft that Boeing will build.

He called those programs “absolutely critical.”

“As we move forward, unless our country’s political leadership envisions a dramatically diminished global security role for the United States, it is vitally important to protect the military modernization accounts — in absolute terms, and as a share of the defense budget,” Gates told the crowd gathered at AEI.

Just minutes earlier, in a speech on Capitol Hill, Pentagon acquisition chief Ashton Carter also made a plea against weapons cuts.

Noting the previous program terminations and changes, Carter said “we’re getting to the point where these are things we do want and need.”

The Pentagon is looking to ensure “affordability” is a top consideration as plans for new weapons programs are fashioned.

Keeping overall costs reasonable is a top performance standard for new programs like those to design and build a long-range bomber aircraft, a nuclear-powered submarine, a presidential transport helicopter and a ground combat truck for soldiers, Carter said during a lunch sponsored by the Aerospace Industries Association (AIA).

Another example is the F-35 fighter, Carter said.

That much-maligned effort came under new fire last week when Pentagon officials told a Senate panel it would cost $385 billion, up from initial estimates of $233 billion. Each jet was supposed to cost about $69 million, but new projections put the price of each one at $103 million.

Pentagon officials also revealed last week it will cost more to operate the F-35s than two of the war planes they will replace, the F-16 and F-18.

Pentagon officials say they are working on all aspects of the fighter jet program to bring down costs.

“We need to make it affordable,” Carter said Tuesday. “This is not something we can afford to start all over again. … We need to bring this to completion.”

DOD officials are “attuned to incentives” that will lead prime contractor Lockheed Martin and the other defense firms working on the F-35 program to “drive costs out.” And the Pentagon is ready to “share the proceeds of savings with those who do that work,” Carter added.

AIA President and CEO Marion Blakey, a former FAA administrator, said industry is concerned that Pentagon procurement and R&D accounts will be trimmed “disproportionately” from other federal spending lines.

She said AIA has calculated that such “investment” spending needs to be around 35 percent annually to allow the U.S. military to ensure its historic “battlefield advantages” and to keep the defense industrial base healthy.

Defense budgets have begun to decline slightly. The 2011 Defense Appropriations Act was $18 billion smaller than the original Defense budget.

The White House last November ordered the Pentagon to cut $78 billion over five years. And five months later, President Obama launched an effort to pare national security spending by $400 billion over a dozen years.

Instead of slashing hardware programs to find savings, Gates called for another round of internal DOD cost cutting, noting a first round of such efforts found $154 billion in savings.

In his characteristically blunt fashion, Gates called one aspect of that cost-cutting initiative “disappointing” — cuts to bloated staffs and offices within military agencies and other organizations.

Pentagon budget writers were only able to trim “less than a billion dollars in annual projected savings from a group of organizations that consume at least $64 billion per year by our latest estimate,” the outgoing secretary said. “I believe we can and should do much better.”

Meeting Obama’s $400 billion goal will “require real cuts,” said Gates, who is slated to be replaced by current CIA boss Leon Panetta.

To get there, Gates last week launched an Obama-ordered national security study that the secretary “is determined” will be focused not on hacking off the Pentagon’s base budget a specific number. Rather, Gates vowed Tuesday it will be “focused on priorities, strategy and risks.”

As he exits, Gates made clear he has mandated that landmark study closely examine military personnel costs, an issue he said has been “avoided by politicians in the past.” 

According to Gates, the study could recommend “re-examining military compensation levels”; reviewing the military’s “rigid, one-size-fits-all approach to retirement, pay and pensions left over from the last century”; creating a “more tiered and targeted system — one that weights compensation toward the most high-demand and dangerous specialties”; and “doing something about spiraling [military] healthcare costs.”