How Ash Carter Oversold DOD’s Savings Record and His Role

Department of Defense by Erin A. Kirk-Cuomo

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Deputy Defense Secretary Ash Carter is right to dismiss sequestration, but don’t buy his ‘Better Buying Power’ defense. Carter was on the watch. By Lawrence J. Korb

Outgoing Deputy Secretary of Defense Ashton Carter’s article “Managing Defense Spending Through ‘Better Buying Power,’ Not Sequestration,” convincingly demonstrates why and how the Department of Defense has and continues to waste so much of the taxpayer’s money.

Carter grossly exaggerates the reduction to the level of defense spending caused by the Budget Control Act. According to Carter, in September 2010, then-Defense Secretary Robert Gates launched a defense-wide efficiency initiative to promote greater efficiency and productivity in defense spending called “Better Buying Power”. This initiative initially directed 23 principal actions in five major areas including eliminating cost growth and promoting competition in major weapons programs. The impetus for this initiative was Gates’ conclusion that the days of increasing defense budgets were coming to an end.

While the Pentagon, as any government agency, should always strive to be efficient, the real question was why Gates waited for four years after taking office, and for a time when defense budgets were not going to increase, before launching his initiative. Were he and his staff, including Carter, who was his undersecretary for acquisition, not trying to eliminate cost growth and promote competition while the budget was going up? Obviously not. As the Government Accountability Office has pointed out, the cost of the 95 major weapon systems developed by the Pentagon exceeded $400 billion in the first 10 years of this century.

Carter also provides some examples from each of the services to show how much money they have and will save by using these initiatives. Leaving aside the question of whether the savings will actually materialize. Carter fails to mention the cost overruns that continue to occur. For example, the first new Gerald Ford-class aircraft carrier, which was christened this month, came in “only” 20 percent above projected cost.

Moreover, even some of the improvements he mentioned are exaggerated. He claims that the Navy has been able to dramatically lower the cost of the littoral combat ship. Really. It actually costs twice as much as originally planned. And he leaves out the elephant in the room, the F-35 — the first trillion dollar weapon system in history, which Gates and Carter continued to purchase before being tested and is a program that they actually accelerated in 2009.

Carter also claims that the cuts mandated by the Budget Control Act compare in pace and magnitude to the historical cycles in defense spending after Vietnam and the Cold War. Really. After Vietnam and the Cold War, the defense budget fell in today’s dollars to $375 billion. Even with sequestration, the base defense budget for FY2014 will be $475 billion, almost $100 billion more. Moreover, the Pentagon has another $80 billion in its Overseas Contingency Operations (OCO) war budget for this year. While that money is supposed to go to funding the wars in Afghanistan and Iraq, the fact of the matter is that the Defense Department has routinely snuck several regular spending items such as routine personnel costs, missile defense and the F-22 into this account, freeing funding up in the base budget. For fiscal 2014, the Pentagon has cut the number of troops in Afghanistan by 50 percent. Yet the OCO budget has fallen by only 10 percent.

Carter is right that sequestration could drive the Pentagon to make inefficient and unsound choices. But that should not obscure the fact that, as Senator John McCain, R-Ariz., has pointed out, sequestration resulted in part from the inefficient and unsound choices the Pentagon has made over the past decade, much of it occurring on Carter’s own watch.

Lawrence J. Korb is senior fellow at the Center for American Progress and was the Assistant Secretary of Defense for Manpower, Reserve Affairs, Installations and Logistics from 1981-1985. He has also held senior leadership positions at the Council on Foreign Relations, the American Enterprise Institute and Brookings.

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