By Lolita C. Baldor
and Barrie Barber
WASHINGTON — Defense Secretary Chuck Hagel warned Wednesday that sharply deeper cuts to personnel, health care and weapons systems will be needed across his department to put the brakes on spiraling costs and reshape the military for leaner budgets and new challenges.
Hagel said that escalating spending to maintain benefits, existing military structures and replacements for aging weapons programs are devouring funding needed for critical operations, training and equipment.
The Pentagon, he said, must reevaluate the size of its management and military command structures, which continue to grow even as the overall force numbers decline. And he put the Pentagon and the nation on notice that meeting this challenge will require spending cuts that are far more sweeping and dramatic than those seen to date.
“I am concerned that despite pruning many major procurement programs over the past four years, the military’s modernization strategy still depends on systems that are vastly more expensive and technologically risky than what was promised or budgeted for,” Hagel said Wednesday in remarks at the National Defense University at Fort McNair.
The Pentagon is already grappling with a $487 billion, 10-year reduction in projected spending as part of the budget law that Obama and congressional Republicans agreed to in August 2011. In addition to that, the military is now facing $41 billion in across-the-board cuts for this fiscal year that went into effect on March 1.
“I think Secretary Hagel clearly recognizes his largest challenge is going to be the declining defense budget,” said Peter Mansoor, an Ohio State University professor of military history and a retired Army colonel. “… This is the right time to truly think about what’s important and what the priorities are going forward.”
Mansoor, a former executive officer to Army Gen. David Petraeus during the troop surge in Iraq, said the military will have to “craft a grand strategy” on what’s achievable with the budget it has.
“They cannot keep the force the same size,” Mansoor said. “It’s going to have to come down.”
He foresaw possible changes to military retirees’ pensions that may rely more on 4O1K-style payouts or later retirement dates and higher co-payments for health care benefits, among other prospects.
Mansoor said modernization of aging weapons and equipment will face “a serious challenge given the budget shortfall” and happen at a slower pace.
Todd Harrison, a senior fellow with the Center for Strategic and Budgetary Assessments in Washington, D.C., said Hagel’s speech signaled a change in direction from former Secretary of Defense Leon Panetta because it acknowledged the likelihood of additional spending cuts while Panetta “refused to plan for it.”
“So the bottom line is: This is an indication that the (Defense Department) is beginning to face up to the reality of a declining defense budget,” Harrison wrote in an email. “His speech left a lot of unanswered questions, but at least he is asking the right questions.”
The changes to the Department of Defense, Hagel said, will involve “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.”
In his first major address as Pentagon chief, Hagel embraced what is likely to be his major challenge in his term: shrinking the U.S. military despite persistent congressional mandates that slash funding but forbid the elimination of favored bases and programs that must be cut in order to achieve the required savings.
Lawmakers have resisted Pentagon pleas for another round of base closures and to trim unwanted aircraft, or proposals to adjust military health care benefits as too politically risky.
“Much more hard work, difficult decisions and strategic prioritizing remains to be done,” Hagel said, noting that “deep political and institutional obstacles to these necessary reforms will need to be engaged and overcome.”
While both his predecessors launched reviews to identify hundreds of millions of dollars in savings, Hagel is taking over just as the automatic, across-the-board budget cuts are taking effect. In light of those reductions, he has already ordered a re-evaluation of the defense strategy that President Barack Obama announced early last year.
That strategy called for a greater emphasis on the Asia-Pacific region, a continued focus on the Middle East and an increase in cybersecurity, missile defense and special operations forces.