Hagel to Cut Hundreds of Staff and Contractors for $1 Billion Savings

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Defense Secretary Chuck Hagel says cutting 200 positions from his office -- and a lot of contractors -- will save about $1 billion by 2019. By Stephanie Gaskell

The Office of the Secretary of Defense will get smaller over the next five years as Chuck Hagel plans to cut 200 positions from his office, saving the Pentagon about $1 billion.

In July, Hagel ordered a 20 percent reduction in the front office budget to comply with sequestration reductions. The Joint Chiefs of Staff, service chiefs, combatant commanders and 3-star headquarters will reduce their staffs, as well.

“Some of these savings will be achieved through significant reductions civilian personnel; much of these savings will be achieved through contractor reductions. We are still finalizing the details, which will be available when the budget is submitted next year. But we will save at least $1 billion over the next five years,” Hagel said during a press briefing at the Pentagon on Wednesday.

In addition to eliminating 200 positions, several departments will reorganize to “reshape and strengthen” their staff. The Office of the Undersecretary of Defense for Policy will “re-balance” some of its workload to assistant secretaries of defense. The Office of the Assistant to the Secretary of Defense for Intelligence Oversight and the Defense Privacy and Civil Liberties Offices will be combined into a single office, as well.

“We recognize that the dollar savings generated by the OSD reductions — at least $1 billion over five years — is a small percent of the sequester-level cuts, underscoring the challenges that face this department in absorbing these very large sequester level reductions. Still, every dollar that we save by reducing the size of our headquarters and back-office operations is a dollar that can be invested in warfighting capabilities and readiness,” Hagel said.

“Most of the reductions in OSD’s staff that I have announced today will occur through a process of natural attrition in order to minimize the impact on our workforce. If the department is forced to take the steep sequestration cuts on the order of $500 billion over the next ten years, we may need to implement additional reductions,” Hagel said.

There’s a lot of skepticism over the cuts, which Hagel said were meant to show solidarity with the rest of the department as budget cuts become the “new normal.” Although there’s congressional support to trim the Pentagon’s budget — some conservatives have pushed the Obama administration to trim the federal workforce instead of cutting into military personnel costs —  cutting jobs doesn’t always go over well on Capitol Hill.

“The Pentagon civilian workforce has been inexorably growing without adequate shaping or planning over the past decade. Worse, the active-duty military ranks have been targeted and reduced at a rapid rate since defense budgets started to fall. But the DOD civilian workforce has grown since the recession in 2008. There are now too many civilians and too little money to go around,” Mackenzie Eaglan, resident fellow at the conservative American Enterprise Institute, told Defense One.

Still, Eaglen said Hagel is setting a good precedent by proposing to reduce his staff first. “Too often in the recent past, secretaries of defense have proposed cutting DOD bureaucracy without setting an example and starting at the top in their own office. The decision by Hagel to cut OSD staff is a welcome and long overdue initiative.”

Eaglen said she is looking to see if Hagel’s proposal is “just another efficiency initiative on paper. “While the intent is smart and necessary, this is far from reality and may never be achieved. Recent defense budgets have not followed the rhetoric of efficiency proposals to cut civilians. Nor has Congress been a willing partner in shrinking this particular workforce.” 

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