How to Save a Trillion Dollars

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By Mark Thompson Thursday, Apr. 14, 2011
    • Jacob D. Moore/U.S. Navy

    Sailors scrub the flight deck of the aircraft carrier USS George Washington

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    Damn the Torpedoes
    Gates, a Cold Warrior going back to the 1960s, recently pressed the military services to tighten their belts. The Air Force pledged to cut its fuel bill by $500 million over the next five years, while the Army said better e-mail systems would save it the same amount. This gives you some idea about the limits of civilian control of the military. On March 14, Gates issued a memo detailing "efficiencies" he is ordering, including a paltry $12,000 in savings by closing down an outreach program and $5,000 in combat gabfests. "It's important not to repeat the mistakes of the past by making drastic and ill-conceived cuts to the overall defense budget," he says.

    But $1 trillion in cuts wouldn't really be as drastic as it sounds — or as the military's no-surrender defenders insist. Such a trim would still leave the Pentagon fatter than it was before 9/11. Besides, there are vast depots of weapons that are ready for the surplus pile. The number of aircraft carriers could be cut from 11 to eight, and perhaps all could be scuttled in favor of Barnett's drone carriers. The annual purchase of two $3 billion attack submarines to maintain a 48-sub fleet as far as the periscope can see also could be scaled back. The $383 billion F-35 program really isn't required when U.S. warplanes remain the world's best and can be retooled with new engines and electronics to keep them that way. Reagan-era missile defenses and the nuclear arsenal are largely Cold War relics with little relevance today. Altogether, Congress could save close to $500 billion by smartly scaling back procurement over the next decade.

    So much for hardware. On the software — or human — side of the ledger, Pentagon pay and benefits have long needed revamping. Here's a number that would make Wall Street weep: some 60 members of the crew of the carrier U.S.S. Abraham Lincoln recently pocketed $3.4 million in bonuses —$57,000 each, tax-free — simply to re-enlist. Military pay must be better aimed at troops the military wants to retain. The 20-years-and-out retirement system needs to be replaced with a model designed to keep hard-learned institutional knowledge around for twice as long. Health care premiums, frozen at $460 a family since 1995, must be raised to keep pace with the rest of the nation's. (Pentagon medical costs have soared from $19 billion in 2001 to more than $50 billion today.) Gates recognizes just how top-heavy the Pentagon is. He has proposed cutting 102 of its 952 generals and admirals. Trimming the ranks and replacing archaic pay schemes with smarter personnel policies could save $400 billion over the coming decade, says the bipartisan Sustainable Defense Task Force, a group created by Congress.

    Better cloaked but just as ripe for reduction are dozens of specialized military agencies and outposts, most of which date from the Cold War and are no longer as key to our defense as they once were. The U.S. now has 17 intelligence agencies — from the well-known CIA to the well-hidden National Geospatial-Intelligence Agency — generating so much "intelligence" that much of it can't even be reviewed. Each service has its own intelligence shop, plus a Defense Intelligence Agency to handle anything that might fall through the cracks. Scaling back collection and analysis to what's vital — as opposed to what is possible — could cut military intelligence budgets by more than $100 billion in the next 10 years, according to an estimate from the Cato Institute, a libertarian think tank.

    Such cuts would still leave the U.S. military as the world's most potent. It would remain the lone force with global reach, given its logistical, communications and intelligence dominance. It would still be the only power able to send warships, warplanes and missiles virtually anywhere in the world at any time. A recent New York Times/CBS poll found that if they had to choose, citizens were far more willing to cut defense (55%) than Medicare (21%) or Social Security (13%). Yet Congress continues to resist even minor reductions. California Representative Howard McKeon, the Republican chairman of the Armed Services Committee, says, "A defense budget in decline portends an America in decline." Attitudes like that can bankrupt a nation, and the public senses it.

    No Politics, Please. We're Broke
    Of course, the Pentagon by itself doesn't decide where to spend all the money. That's up to Congress — which is a big part of the problem. Nothing else seems to lead lawmakers to open the federal purse like the prospect of, for example, an aircraft carrier's steaming home to their district. Between the ship and the dozens of aircraft stored below decks, a Navy carrier is a $15 billion purchase. And that's before adding the accompanying destroyers and submarines. With numbers like that, who needs pork? It's little surprise that the folks most involved in the purchase of these ships — the members of the sea-power subcommittees — hail from Navy-friendly coastal states with a strong interest in keeping as many of them sailing as possible.

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