The Werther SITREP: Is the Pentagon Hostage to a Frankenstein Monster?
July 15, 2001
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1] Thomas E. Ricks, "Review Fractures Pentagon: Officials Predict Major Military Changes Far Off," Washington Post, July 14, 2001; Page A01. Excerpts attached.
 David Segal, "The Shell Game: How the Generals will try to fleece Clinton. And What he can do to stop them," Washington Monthly, July/August, 1993. Attached.
It is common knowledge in Washington that Secretary Rumsfeld's Defense Review is in deep trouble. Reference 1, for example, is a front page report by Thomas Ricks that describes how a wide rift has opened up between the uniformed military and the Bush Administration's highest civilian appointees.
I asked a friend with wide experience in defense budget matters for a personal assessment of the current situation. What follows is his Situation Report (SITREP).
More Spending is not a Reform Strategy
* Werther is the pen name of a Northern Virginia-based defense analyst who has worked on high-level defense matters for many years in government.
Having received two of the Pentagon's urgent funding requests this year, Congress and the taxpaying public had a right to hope the third would consist of startup financing for the long-range modernization/ transformation of military that the President promised.
Well, my advice is to forget it. Its still cold-war business-as-usual inside the Big Green Spending Machine.
More than 75 percent of the administration's latest $18.4-billion defense proposal is not even for modernization; it is for continuing current operations. At the same time, the administration's Defense Review, on which the modernization/transformation funds were to be predicated, is not complete and will not be until autumn at the earliest. Moreover if the attached report [i.e., Ref 1 below] by Tom Ricks of The Washington Post is correct, it won't be worth the wait.
According to Ricks, the Pentagon is now deadlocked, and it is beginning to look like a civil war might break out between the military and the civilians charged with overseeing the military. In fact, several top Defense Department officials told him not to expect the Review to produce any significant changes in the size or structure of the armed forces.
In short, it looks like the Defense Review is degenerating into yet another sterile attempt to protect the status quo. The Defense Review is headed toward the ash heap of history, like Les Aspin's Bottom-Up Review in 1993 and the first Quadrennial Defense Review in 1997.
Let's look at the facts to see if we can make sense about what is motivating this madness.
What follows is a rough breakdown of the $18.4 billion FY 2002 Amendment as requested by DoD using its own somewhat arbitrary categories:
While the missile defense and modernization items can presumably be placed in the category of "military transformation," that leaves $14.2 billion (3/4 of the request) that is arguably for easily calculable "level of effort" or "housekeeping" functions - and base maintenance and housing are literally housekeeping functions.
Bear in mind, the military departments have mountains of historical data to calculate how much they should spend on flying hours, spares, depot maintenance, etc., in the coming budget year. Since they were already working off the military services' detailed budget plans when the administration took office in January, it should have been quite easy for the Rumsfeld team to incorporate these types of increases in its initial budget request.
In many cases, they did incorporate them - but only partially - as a component of the initial February submission: pay, housing, and health care (the latter is another calculable cost based on demographics, demand, and projected medical costs). So, it is clear they took one bite of the apple in February, and then waited to take a second bite in June.
On what analytical basis, then, did the Pentagon leadership put in $3.9 billion for health care in February, and then add another $2 billion in June?
Runaway inflation? Hardly.
Or, was it runaway ambition to keep the discretionary federal budget cap low so the Administration could get the tax cut through Congress?
Before answering this question, it is appropriate to review what Congress and the taxpayer already provided to DOD:
The next step should have been to start financing long-term modernization. This would be based on the Pentagon's strategic review. Again, A Blueprint for New Beginnings said: "[T]he Nation's defense strategy should drive decisions on defense resources, not the other way around." The Congressional budget resolution provided a reserve fund to accommodate those presumed needs. But it should be realized that the money was only to be disbursed pursuant to completion of the defense review.
As noted above, however, the administration's strategic review is not complete, and may be degenerating into chaos. Nevertheless, the Pentagon is requesting an additional $18.4 billion on top of the $6.5-billion supplemental for fiscal year 2001 and the $14.5-billion increase for fiscal year 2002.
And this $18.4 billion budget amendment is mainly composed of items, such as infrastructure, base operations support, depot maintenance, and mollifying the retiree lobby, which ought to have been in the original request, since they support ongoing operations—be they military or political—that are easy to budget for, rather than the more difficult transformation strategy.
As large as the budget amendment is, it is still far too small for the apparently insatiable appetite of the Pentagon. Press and Congressional sources have stated that Secretary Rumsfeld and his team sought a much greater sum from the administration—up to $40 billion. However, the Office of Management and Budget pared back the request to what the neo-conservative Washington Times, a paper dedicated to reliving the cold war, called a "paltry" eighteen-billion-and-change .
Even in at that "paltry" level, $18.4 billion would be a significant addition to the defense budget. It is larger than the entire agriculture appropriations bill; significantly, it is also more than twice Russia's entire annual defense budget, according to the prestigious Jane's Information Group. That comparison bears repeating: we are not saying the Pentagon's total request is more than twice Russia's military spending; we are observing that the budget amendment, a mere one-eighteenth of DOD's initial request, is more than twice Russia's military spending.
Moreover, if enacted, the FY 2002 amendment would raise the fiscal year 2002 national defense budget request to $343 billion (including the defense-related programs in the Energy Department). That is almost exactly the constant-dollar average for defense budgets during the cold war years of 1950-1989, when the United States fought the Korean and Vietnam wars, in addition to deterring the 200 divisions of the Warsaw Pact.
The absence of a strategic review in advance of this kind of funding request begs the question: is the Administration playing a shell game to push through the biggest military spending increase since 1981, once the tax cut had been passed?
If it is a shell game, it is not at all clear that the Bush administration is unified on the plan. Wall Street Journal reporter Gerald Seib reports "The White House is angry at the Pentagon for seeking so much money and taking so long in its deliberations." 
It is easy to see why some in the White House might be angry: last week, the Pentagon turned up the pressure again by telling Congress it needed at least another $32.4 billion on top of $18.4 billion approved by the White House to fully-fund all its requirements. This request would bring its total wish list to $50.8 billion or 27 percent more than the $40 billion wish list turned down by the White House's Office of Management and Budget (OMB). Moreover, the letters accompanying their wish lists said these requirements were not all-inclusive and represent the beginning of many long-term efforts to improve readiness, infrastructure and modernization accounts - but there is no Defense Review upon which to base this claim. 
The executive branch is not the only house divided over the defense budget mess. Congressional Republicans are also divided. Incredibly (but following the paradox of Beltway logic, predictably), some of the usual suspects on the Hill are bad-mouthing the request on the pretext that it far too small! But others of impeccably conservative credentials are wondering why they put their votes and reputations on the line to restrain the total level of discretionary spending to 4 percent growth, pass the tax cut, and protect the Social Security and Medicare trust funds. They feel that they have been sandbagged by self-serving apparatchiks in the Pentagon who feel neither compunction nor shame about blowing the budget caps before formulating a strategy to guide spending.
My sense is that the Pentagon leadership is less a conscious conspirator than hostage to a Frankenstein monster that evolved during the Decade of Denial that was the 1990s. The Clinton era, for various bureaucratic and ideological reasons, raised incompetence to new heights in the Pentagon, surpassing even the era of the infamous Louis Johnson. Their mismanagement over eight years squandered an opportunity to put the post-cold war Pentagon's house in order.
By protecting the status quo, the Clinton administration foolishly unleashed a pathological growth in the pent-up demand for defense spending, even though they were warned about the Pentagon's looming trap, well before the fact, by David Segal in the remarkably prescient article, "The Shell Game," which appeared in the July/August 1993 issue of the Washington Monthly.
So it is not at all surprising that none of the Department's cold-war legacy problems was repaired and most got worse during the remainder of Clinton's term: the rising cost of low readiness; an acquisition system that creates cost rather than hardware; a thoroughly corrupt bookkeeping system; an adolescent infatuation with technology for its own sake; and an embarrassingly incestuous relationship between generals, contractors, Congressional defense committees, and elements of the Establishment press.
Segal's article shows also why it is no accident that the Rumsfeld defense review filled the special interests with wildly inflated expectations of money falling from the skies. It helps us understand the larger context of why the deadlock and looming civil war in the Pentagon is really just a reflection of business-as-usual in the Pentagon.
Those dynamics are now playing themselves out with all the aesthetic loveliness of a Beltway pileup. The principal losers, as always, will be the taxpayers who pay the bill and the soldiers who may be asked to put their lives on the line. .
Why is the public interest always the loser?
One reason is that the American people are being subjected to an unrelenting propaganda assault on their perceptions as well as their wallets. This propaganda campaign purports to say that America is always and forever running the risks of more Munichs, more Pearl Harbors, more Task Force Smiths -- but never more Vietnams, or Bays of Pigs, or the predictable effects of business-as-usual (as Segal so clearly demonstrated).
Should they take Abraham Lincoln's advice and disenthrall themselves from the prevailing dogma, the American people will find—if they care to look—that their treasure has gone to prop up just another fiefdom of the Welfare State: an arrogant and self-righteous claque of dependents whose last refuge is the claim of patriotism.
 "Inside the Ring," The Washington Times, 22 June 2001
End Werther SITREP
Readers interested in learning more about why past defense reviews failed, and how we can use the lessons learned from those experiences to produce a defense review that works, can download the last chapter of Spirit Blood and Treasure (as discussed in Comment #414.)
[Disclaimer: In accordance with 17 U.S.C. 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only.]
Review Fractures Pentagon Officials Predict Major Military Changes Far Off
By Thomas E. Ricks
Civilian Pentagon officials and military brass have clashed so seriously in recent days that Joint Chiefs Chairman Gen. Henry H. Shelton expressed concern Wednesday to Rumsfeld about the defense secretary's review of the military.
But many senior generals and admirals began to balk when the Pentagon discussions turned to how to translate those recommendations into decisions about the future shape and size of the military, several officials said. The key point of contention is how much change is prudent in the military right now, and how rapid that change should be, they added.
The services are deeply worried that to come up with funds for new initiatives, Rumsfeld might cut existing troops, ships and planes. The Army, for instance, fears losing two of its 10 active divisions, while the Navy fears the loss of aircraft carriers. But one of the civilians involved in the review said that Rumsfeld has not proposed any cuts at this point.
Meetings of top civilian and military officials at the Pentagon have grown tense in recent days, this person added. He said, for example, that at a session earlier this week, Steven Cambone, the Rumsfeld aide coordinating staff meetings on how to change the military, angrily asked the generals present, "Can't you come up with anything new?"
© 2001 The Washington Post Company