Hagel Sees Modernization Lull Versus Smaller U.S. Forces

Photographer: SeongJoon Cho/Bloomberg

U.S. Defense Secretary Chuck Hagel outlined the broad dimensions of two approaches to the military cuts. One is deeply reducing forces, especially in the Army, while retaining a greater technological capability. Close

U.S. Defense Secretary Chuck Hagel outlined the broad dimensions of two approaches to... Read More

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Photographer: SeongJoon Cho/Bloomberg

U.S. Defense Secretary Chuck Hagel outlined the broad dimensions of two approaches to the military cuts. One is deeply reducing forces, especially in the Army, while retaining a greater technological capability.

The Pentagon will be forced to choose between a decade-long “modernization holiday” and a “much smaller” force if the military has to absorb continued budget cuts of at least $50 billion annually through 2023, Defense Secretary Chuck Hagel said.

Even if the Defense Department makes draconian cuts in forces, delays work on improved weapons and wrings our additional efficiencies, that won’t be enough to curtail severe impacts of the budget process called sequestration in the next five years, the defense chief said yesterday in remarks to reporters.

Hagel outlined the broad dimensions of two approaches presented in a “Strategic Choices and Management Review” he ordered. One is deeply reducing forces, especially in the Army, while retaining a greater technological capability. The other is delaying weapons advances to maintain the force at levels currently planned.

Hagel also briefed congressional committee leaders yesterday, effectively warning lawmakers they must alleviate cuts or take responsibility for the alternatives.

Republican Representative Howard P. “Buck” McKeon of California, chairman of the House Armed Services Committee, criticized the review in an e-mail as “entirely budget-driven, deferring any further consideration of strategy.”

Hagel had pledged a far-reaching effort to cut waste and reexamine weapons systems, saying in April that the exercise couldn’t be limited to “just tweaking or chipping away at existing structures and practices, but where necessary fashioning entirely new ones.”

Lockheed’s F-35

Instead, the review sketched broader alternatives. If the Pentagon cuts deeply into forces, Hagel said yesterday, the military will be able to protect certain programs, such as Lockheed Martin Corp. (LMT)’s F-35 fighter, a program to build a new long-range bomber and upgrades in submarine cruise missiles.

That approach calls for reducing the Army from a planned 490,000 active-duty personnel to as few as 380,000. The Marines would be reduced from a planned 182,000 to as few as 150,000. It also could result in retiring Air Force bombers and reducing the Navy’s carrier force to as few as eight ships from 11.

Slowing Modernization

The second option would retain the planned force, cancel or curtail “many modernization programs, slow the growth of cyber enhancements and reduce special operations forces,” Hagel said.

Asked yesterday whether there is an emerging consensus in the Pentagon about protecting forces or weapons capability, Admiral James Winnefeld, vice chairman of the Joint Chiefs of Staff, predicted “we will edge slightly probably toward capability, because we have to keep our industrial base alive, we have to keep focusing on new technologies.”

Retired Major General Arnold Punaro, who frequently advises the Pentagon, said Hagel “is the first senior leader to actually require a serious” review of potential targets for cuts.

“Secretary Hagel should be awarded the military’s highest marksmanship badge as he has put every round in the black,” Punaro said in an e-mailed statement.

Hagel said that “one of the most striking conclusions” of the review is that even if the Pentagon combines the savings from all potential options -- “including significant cuts to the military’s size and capability -- the savings fall well short of meeting sequester-level cuts, particularly during the first five years of these steep, decade-long reductions.”

Budget Plan

The Pentagon would fall short by as much as $35 billion a year in fiscal 2014 and 2015, he said.

Hagel said the summary provided yesterday is intended to help shape preparation of a budget plan for fiscal years 2015 to 2019 and a Quadrennial Defense Review under scenarios that include a continuation of sequestration.

He previously announced that he was ordering a reduction in headquarters staff by 20 percent, including his office, the Joint Chiefs’ staff and combat commands.

While Hagel referred generally yesterday to the prospect of cutting or delaying major weapons, in April he had pledged a skeptical review of Pentagon acquisition programs.

“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 then in his first major policy speech as defense secretary.

Pay, Benefits

Hagel said that the sequestration levels envisioned over the decade “would break some parts” of the current strategy that envisions a rebalance to Asia “no matter how the cuts are made.”

Hagel also took aim at pay and benefits for troops, directing Army General Martin Dempsey, chairman of the Joint Chiefs of Staff, to lead a study aimed at saving $50 billion in personnel costs over the next decade. He acknowledged Congress has opposed such cuts in the past.

Savings options include making military retirees use more private health insurance, requiring troops to pay more toward their housing costs, reducing cost-of-living adjustments for troops stationed overseas and continuing to limit military and civilian pay raises, Hagel said.

“Overall personnel costs have risen dramatically -- some 40 percent above inflation since 2001,” Hagel said. “The department cannot afford to sustain this growth.”

To contact the reporters on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net; David Lerman in Washington at dlerman1@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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