Defense spending: The Army's next big fight will be protecting its budget from Leon Panetta and the pols.

Military analysis.
July 5 2011 5:02 PM

The Army's Next Big Fight

Protecting its own budget from Panetta and the pols.

Leon Panetta. Click image to expand.
Defense Secretary Leon Panetta on his first day at work

It's a fair bet that when Leon Panetta took the helm of the Pentagon last week, one of his marching orders was to find more ways to cut the defense budget, and not just around the edges.

One result of this is that the Army will very likely take a whacking.

That's probably the plan, anyway. Obstacles may, of course, intervene. The next chairman of the Joint Chiefs of Staff, Gen. Martin Dempsey, is an Army officer—the first to be named to the military's top post in a decade. And the new Army chief of staff, Gen. Ray Odierno, was a fierce defender of turf the last time his service was threatened with deep budget cuts.

So we may soon witness either a burst of creative adaptation from the Army's top brass—or a major bureaucratic fight.

There are four tempting arguments for slashing the size of the Army.

First, the Pentagon will spend $159 billion this year on personnel—more than the $142 billion it spends on buying weapons systems. (The total budget comes to $671 billion, including $118 billion for fighting overseas wars.) That's a big, shiny target for any administration seeking to cut the federal deficit.

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Second, if the goal is to find fast ways of cutting the deficit, cutting payrolls is fastest of all. When money is authorized to buy a weapons system, it takes a while—sometimes a long while—to spend that money. For instance, according to the Fiscal Year 2012 edition of the National Defense Budget Estimates (also known as the Pentagon's "Green Book"; see especially Table 5-11), only 15 percent of the money budgeted for a Navy shipbuilding project actually gets spent in the first year. Another 25 percent is spent in the second year, 20 percent in the third, 15 percent in the fourth, 12.5 percent in the fifth, and still another 12.5 percent in the sixth. (Similar figures apply to building military aircraft, missiles, and armored vehicles.)

To spell out one implication of this unalterable fact of military contracting, the Fiscal Year 2012 budget includes $2 billion to buy one DDG-51 Aegis destroyer for the Navy. Of that sum, only $300 million (15 percent of it) will wind up being spent in the first year. By the same token, if Congress or the White House removed this $2 billion destroyer from the budget, only $150 million would be saved in the first year. (And the Pentagon would probably have to pay "cancelation costs," which are routinely incorporated into weapons-procurement contracts.)

In other words, killing weapons systems is not a very good way to cut the deficit quickly.

But cutting $2 billion from the budget's military personnel accounts would save between $1.6 billion and $1.8 billion in the first year and all but a small fraction of the rest the year after. Big savings happen instantly.

A third tempting argument for cutting the size of the Army is that very nearly all U.S. troops are about to pull out of Iraq, and President Barack Obama announced last month that he was "winding down" the war in Afghanistan as well. Would anyone care to argue that we are likely to send 100,000 or so soldiers into another war soon? Or that we face the slightest chance, in the foreseeable future, of fighting a big land war in Europe or Asia?

The Army now has 570,000 active-duty soldiers. It has already made plans, with little or no controversy, to reduce that number by 49,000, all of them enlisted personnel, in the next four years. It wouldn't take much analytical prowess for an accountant in the Pentagon or White House to figure out how to make those cuts faster and deeper and to put some officers on the chopping block, too.

Finally, the fourth argument: There is one section of the defense budget that consumes more money than personnel—Operations & Maintenance, which includes fuel, spare parts, and repair and training facilities: the goods and services that make a war machine run. The amount for O&M in the Fiscal Year 2012 budget comes to $314 billion—more than the sum for personnel and weapons procurement combined.

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