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Pentagon’s ‘Endless Money’ Era Ends

Robert Gates, US defence secretary, on Monday announced what could be the biggest cuts to the Pentagon bureaucracy since September 11, as he declared that the era of “endless money” had come to an end.

Construction at the Pentagon.
Getty Images
Construction at the Pentagon.

Mr Gates announced cuts of almost 30 per cent on outside contractors, and curbs on military intelligence agencies and his own staff, as well as the proposed abolition of a military command and a reduction in the ranks of generals and admirals in Europe and beyond.

The cuts would lead to the loss of thousands of jobs but could be fiercely resisted in Congress.

“The culture of endless money that has taken hold must be replaced by a culture of savings and restraint,” Mr Gates told a press conference. But he added: “My greatest fear is that in economic tough times that people will see the defence budget as the place to solve the nation’s deficit problems, to find money for other parts of the government.”

The US’s looming fiscal crunch is almost certain to end the breakneck expansion in military expenditure that has nearly doubled the base defence budget in 10 years to $549 billion for 2011. When the wars in Iraq and Afghanistan are taken into account, total spending is more than $700 billion a year.

Although he did not specify a figure for total savings from his latest move, the Pentagon chief’s goal is to find enough savings from reduced overheads to increase core defence spending by 2 to 3 per cent a year with only a 1 per cent annual rise in the overall budget.

Painting a dark picture of the global landscape, Mr Gates said slashing the budget overall would be “disastrous” at a time when the world was becoming more unstable.

Among his announcements, Mr Gates said he would propose the scrapping of the US Joint Forces Command, which employs 2,800 military and civilian officials, and 3,000 contractors at a cost of at least $240 million a year. He added he would close the Pentagon’s $340 million Business Transformation Agency.

The defence secretary announced spending cuts of 10 per cent a year for the next three years on private sector contractors, who account for 39 per cent of total workforce costs, not including contractors in Iraq and Afghanistan.

Mr Gates expects the Pentagon to thin down senior positions in parts of the world such as Europe, where cold war command structures remain in place, leading to the elimination of at least 50 posts reserved for generals or other top military officials and 150 civilian posts over the next two years.

He announced a freeze over the next three years in the number of positions in his own office and in defence agencies and combatant commands, as well as reduced expenditure on advisory studies for the Department of Defence and on intelligence contracts.

The announcements form part of a broad push by Mr Gates to restrain and reallocate spending. Last year he cut high-profile projects such as new orders of the F22 fighter jet and in June ordered his services to find $100 billion of savings over the next five fiscal years.

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