He said the military must look at change “that involves not just tweaking or chipping away at existing structures and practices but, where necessary, fashioning entirely new ones that are better suited to 21st century realities and challenges.”
Hagel said the biggest fiscal challenges facing the Pentagon are not declining or flat-lined budgets, but the “growing imbalance” of how money is spent internally.
“It is already clear to me that any serious effort to reform and reshape our defense enterprise must confront the principal drivers of growth in the Department’s base budget — namely acquisitions, personnel costs and overhead,” he said.
Hagel’s speech comes one month after across-the-board sequestration cuts took effect, which was just two days after he was sworn in as defense secretary.
With no budget deal on the horizon between the White House and Congress, how Hagel and the military tackle sequestration has the potential to be a major part of his legacy at the Pentagon.
For more on Hagel's remarks, click here.