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Esper brings China focus as Defense secretary

Plan to seek savings in Pentagon operations could face roadblocks

In search of savings, Defense Secretary Mark T. Esper is looking at spending by organization that provide back-office services to the Pentagon. (Caroline Brehman/CQ Roll Call file photo)
In search of savings, Defense Secretary Mark T. Esper is looking at spending by organization that provide back-office services to the Pentagon. (Caroline Brehman/CQ Roll Call file photo)

Like every new Defense secretary, Mark T. Esper says he wants to make the Pentagon more efficient. He will get some results, but not many and not quickly, experts say.

Esper, now a few months into the job, wants to save money to spend it on preparing for war against China, and to a lesser extent Russia.

And he will find some relatively modest savings in the next few months, probably by shrinking overhead offices in the Pentagon. Yet experts are skeptical that he will propose bold, big-money changes by the end of President Donald Trump’s first term. And to whatever degree Esper tries any big moves, the White House or Congress will probably find a way to kill them as elections loom, analysts say.

Still, even if Esper fails to overhaul much in the next year, the Pentagon is in for dramatic changes in the next decade, some say. Contesting China, in particular, will not come cheap.

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“Why hasn’t the Defense Department found huge savings in the last 30 or 40 years? It hasn’t really had to. We weren’t going to lose in Iraq or Afghanistan or Syria — that is, capital ‘L’ lose,” said Roman Schweizer, a defense policy analyst with Cowen and Company, a financial services firm.

By contrast, Schweizer said, the risks in the years ahead are more urgent.

“If we really are in a moment of great power competition, you have to think things are going to change” in how the Pentagon spends its money, he said. “Or the outcome is going to be not good.”

Hard calls

Esper suggested to reporters last month that he is looking to shake things up. But it is not yet clear how much.

Two budget reviews are underway. First, Esper is scouring the spending of the 27 Pentagon organizations that provide back-office services to the entire department — from contract management to accounting, with some spying and weapons development thrown in. These organizations are sometimes referred to as the “fourth estate” because they do not fall under the Army, Navy or Air Force.

Trimming the fourth estate isn’t a new idea, but these efforts haven’t gotten very far. The Government Accountability Office reported to Congress a year ago that these support organizations remain rife with fragmentation and often still duplicate functions performed by the armed services.

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While some cuts to these offices are a virtual certainty under Esper, the ones that could produce the biggest savings are too politically sensitive to touch, at least in the next year, former Pentagon officials say. These include missile defense programs, medical research and military hospitals.

Likewise, additional top-dollar savings such as closing bases or killing major weapons systems are virtually off limits, they add.

“The big ones are politically contentious,” said Robert Hale, the former Pentagon comptroller.

Bold talk

Esper has also launched an overlapping review that requires the department’s top officers and officials to meet at least weekly to assess how well the armed forces’ budget plans contribute to the China challenge.

The Army, which was under Esper’s leadership from late 2017 until this past June, found some $25 billion in savings after Esper led an exhaustive assessment. The review was known as “night court” because program managers had to make their case to senior leaders oftentimes late into the evening.

But don’t count on a multiples of those dollars coming out of the ongoing review, analysts say. Or if they do, that’s as far as many are likely to go.

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Trump and other Republicans will be reluctant to preside over major cuts to government installations or contractor initiatives. The president sees the Pentagon as a jobs program, and elections are nigh.

“I think the chances of anything substantial happening in the fiscal 2021 budget are close to zero,” said Mark Cancian, who oversaw national security programs at the Office of Management and Budget for most of the Obama administration. “Nobody in the White House or Congress is going to rock the boat in an election year.”

Crunch is coming

Even though experts are skeptical that the next year will see major budgetary alterations, such a reshuffling is highly likely in the next decade, they hasten to add.

The defense budget will be flat at best in the years ahead, yet a decades-long struggle to keep up militarily with an increasingly wealthy China will require significant investments in hypersonic missiles that can travel five times the speed of sound, artificial intelligence, unmanned systems, satellites, cyber tools, and longer-range missiles and munitions — plus new organizations such as Space Force.

The harder question is what to reduce in order to pay for this. Will it be large warships, fighter squadrons, the overall number of people in uniform, bases at home and abroad?

“We’re not going to out-man the Chinese,” Hale said. “We’re going to have to find ways to be smarter.”

The major power competition is the kind of battle the Pentagon prefers to prepare for — more so than fighting shadowy insurgents in someone else’s country or dealing with humanitarian crises caused by climate change, for example.

But the Pentagon will in reality have to pay for all the above. That will complicate Esper’s efficiency push.

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