Budget

Hagel on DOD budget trade-offs: capacity vs. capability

Defense Secretary Chuck Hagel laid out a bleak set of budget options on July 31 as part of a wide-ranging management review that seeks to strike a balance between capacity in the form of troops and technological capability.

Hagel described a “menu of options” for dealing with budget sequestration cuts totaling 10 percent of DOD’s annual spending. The automatic budget reductions took effect in March, prompting a DOD “Strategic Choices and Management Review.” Hagel said “a top priority in future-year budget plans is to build a ready force, even if that requires future reductions in force structure.”

Despite the likelihood of further IT consolidation, the defense chief left open the option that military planners would continue to invest in networking and other technologies as force multipliers, even as they contemplate force reductions. Among the possibilities are shrinking the size of the Army as the war in Afghanistan winds down and priorities shift to “protracted large-scale counterinsurgency operations.”

“The basic trade-off is between capacity measured in the number of Army brigades, Navy ships, Air Force squadrons, and Marine battalions and capability, our ability to modernize weapons systems and to maintain our military's technological edge,” Hagel explained during a Pentagon briefing.

If DOD’s leadership adopts that approach, Hagel said, “we would continue to make cyber capabilities and special operations forces a high priority. This strategic choice would result in a force that would be technologically dominant, but would be much smaller and able to go fewer places and do fewer things, especially if crisis occurred at the same time in different regions of the world.”

An alternate budget approach that would seek to maintain force levels could result in a “decade-long modernization holiday” that would cut “intelligence analysis and production at combatant command intelligence and operation centers, [but] also foster closer integration and reduce duplication across defense enterprises,” Hagel said. That approach would also “slow the growth of cyber enhancements.”

The stark realization has set in at the program level that service managers must look for savings in their operations and maintenance accounts as a way to cope with sequestration. “It’s all about the money,” Rob Anderson, chief of the Marine Corps vision and strategy division, told a recent Defense Systems forum on mobile technologies.

In the meantime, Hagel concluded, DOD will “work together to replace the mindless and irresponsible policy of sequestration.”

About the Author

George Leopold is a contributing editor for Defense Systems and author of Calculated Risk: The Supersonic Life and Times of Gus Grissom."Connect with him on Twitter at @gleopold1.

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