Secretary Panetta Making The Right Moves On Defense Restructuring

At the time Leon Panetta was nominated to replace the extremely powerful and public Robert Gates as the 23rd Secretary of Defense, there were many observers who worried about the fate of the Department of Defense (DoD). Given his extensive experience on budget matters in Congress and the executive branch, many thought that he had been brought in as the hatchet man to gut defense spending. Others saw his low-key decision making approach and relaxed working style as signs that the defense bureaucracy and military services would capture him. Still others believed him to be a non-entity when it came to defense issues, a “chair warmer” sent to DoD to make sure nothing happened in national security so the Administration could focus on its domestic agenda.

The doubters and critics were wrong. First, Panetta became a commanding presence in the Pentagon and a forceful spokesman for national security and preserving a sensible defense budget. He has not minced words when it comes to the devastating effects on national security of the budget sequestration required by last year’s Budget Control Act.

Second, he presided over the formulation of a new defense strategy that is a model of clarity, brevity and substance. Gone are the alliterative devices, circumlocutions and banal phraseology of the 2010 Quadrennial Defense Review. The QDR provides the basis in strategy for defining a future force structure and investment portfolio.

Now, Secretary Panetta is making the right moves when it comes to deciding what steps must be taken to meet the required $480 billion in spending reductions over the next decade. The most important decision he made was to focus on quality over quantity in restructuring the U.S. military. Under Secretary Gates, virtually every one of DoD’s modernization programs was either terminated or cancelled. In contrast, Secretary Panetta appears committed to such programs as a new long-range bomber, the aerial refueling tanker, the F-35 Joint Strike Fighter, Ford class carrier, the Virginia class submarine and advanced theater missile defenses. All three legs of the nuclear triad will be maintained. In addition, the Department will move forward on an undersea conventional strike option; this means a purpose–built or modified submarine launched ballistic missile.

Even the service that took the biggest hits, the Army, will be modernized. The Army will move forward with its plans to procure the Ground Combat Vehicle, the Joint Light Tactical Vehicle, Shadow and Warrior unmanned aerial systems and even a new scout helicopter. In addition, the venerable Paladin self-propelled howitzer will be upgraded. As a result, the new, slimmer and trimmer Army will be able to field a more capable force.

In many ways, Secretary Panetta appears to have done what he could to limit the damage from these severe budget cuts. There will be relatively modest reductions in Air Force tactical fighter squadrons and older Navy ships. It still remains to be seen how the decision to slow the procurement of the F-35 will impact the unit price. Secretary Panetta needs to be careful not to create a “death spiral” for the program in which slower procurement increases unit costs which results in even further procurement cuts until it costs as much to buy an F-35 as an F-22.

Secretary Panetta also is ready to take on some of DoD’s sacred cows. He is pushing for reform of defense entitlements, particularly health care and retirement. He has gotten Presidential approval to request another round of base closures to shrink the size of the defense infrastructure and public industrial base to fit the smaller size of the military. Base closure efforts are politically unpopular and often difficult to implement successfully. Credit goes to Secretary Panetta for taking on these difficult topics.

As long as Secretary Panetta appears willing to fight the tough battles, I would propose one additional engagement. He should end the requirement in current law that half of all depot maintenance dollars go to the public sector depots and defense maintenance facilities. Instead, he should advocate full and open competition by all capable parties, public and private with the goal of providing the best value sustainment for the military.