By the time we were finished putting together an FY2010 budget that incorporated what the Joint Chiefs had discussed with Bush and a good deal of spending previously covered by supplementals, it had exploded to $581 billion, $57 billion more than the earlier projected budget for FY2010. I knew immediately that that dog wouldn’t hunt. What I had not taken into account was that an effort that I had seen as experimental and illustrative for the White House and Congress had been immediately embraced as firm financial guidance by the Joint Chiefs and others. Every element of the Pentagon had built its budget down to the last dime on the basis of a $581 billion request. And when we had to develop a real-world budget tens of billions of dollars lower, there was all manner of screaming and yowling out of the Pentagon about a huge “cut.” Needless to say, as all this was playing out, more than a few Obama folks—with some justification—thought the Bush administration had sandbagged them, seeking to make Obama look weak on defense, as he inevitably would have to pare back the budget. Trying to begin moving away from supplementals had blown up in my face. I also realized I should have stopped the additions encouraged by Bush. These were both my errors. After all my years around Congress and my own building, I had, to my chagrin and embarrassment, been naïve about both.
This fiasco behind me, I set about to rebuild the 2010 budget. In a meeting with the president on February 2, I acknowledged the need to curtail the growth in defense spending, but in a refrain I returned to again and again, I said the cuts should be “strategy-driven, not accountant-driven,” that we should do what was best for the country and not worry about the politics. The president agreed. The numbers we settled on in early February ($533.8 billion for the 2010 base budget and $130 billion for the war supplemental) were lower than I wanted but higher than what the Office of Management and Budget wanted.
I had a long private conversation with the president on February 11, during which I told him I “hoped and expected” to send him a new budget that cut many programs and reshaped spending to provide greater balance between current and future needs. This would involve making very difficult decisions, I said, and would be very controversial on the Hill. If we waited to speak out publicly until after the administration formally submitted its full budget to Congress in April, every major decision would have leaked, giving industry, lobbyists, and members time to galvanize support for sustaining every major individual program.
I recommended a highly unusual, if not unprecedented, political strategy. I told him, “I propose to review the major elements of the package with you and Peter [Orszag, director of OMB] before I even send it to OMB. Then I will go public and brief the recommended actions in their entirety—a holistic, coherent reform package. It will be harder to cherry-pick parochial interests if the package is seen as a comprehensive whole that serves the nation. We can capture the political high ground.” Another advantage, I told him, was that he and OMB could gauge the reaction and, if necessary, turn down one or more of my recommendations. The president was very supportive but wanted Orszag on board. I used Obama’s support to ensure that that was the case.
Rebuilding the 2010 budget gave me the opportunity not only to make “rebalancing” meaningful but also to weed out over-budget, overdue, or unjustifiable programs and to turn my attention to the herculean task of reforming the defense acquisition process. The history of cutting defense programs, especially big ones, is not pretty. When Dick Cheney was secretary in the early 1990s, two programs he tried to cut were the A-12 Navy and Marine Corps ground attack aircraft (nicknamed “the Flying Dorito” for its triangular shape) and the Marine Corps’ tilt-rotor Osprey, a combination helicopter and airplane. The A-12 matter was still in litigation twenty years later, and Congress overruled Cheney to keep the Osprey flying. When other secretaries had tried to kill programs, the services would work behind the scenes with sympathetic members of Congress to keep the programs going and preserve the jobs they provided. When the services wanted to kill a program, Congress would usually just override them and fund the procurement over their objections. For most members of Congress, the defense budget is a huge cash cow providing jobs in their districts and states. Thus, even in those rare instances when the Pentagon tried to show some acquisition discipline, Congress made it tough, if not impossible, to succeed. To beat the system, I needed the radically different political strategy that I had described to the president.
I threw myself into the budget process. During February and March 2009, I chaired some forty meetings as we considered which programs should have more money and which were candidates to be eliminated or stop production. It was an intense period, partly because of the amount of work that had to be done, and partly because everyone knew that hundreds of billions of dollars in programs were at stake. Most of my meetings were with what we called the “small group”—deputy secretary Bill Lynn (after he was confirmed on February 11); the chairman and vice chairman of the Joint Chiefs, Mike Mullen and Hoss Cartwright; the director of program evaluation, Brad Berkson, and his deputy, Lieutenant General Emo Gardner; the acting comptroller, Mike McCord and (once confirmed) the comptroller, Bob Hale; the undersecretary for acquisition, technology, and logistics, John Young (a Bush holdover); the undersecretary for policy, Michèle Flournoy; and Robert Rangel and Ryan McCarthy of my staff. Gardner was the real workhorse on much of the effort. Every few days we would hold expanded meetings (the “large group”) that included the service secretaries and chiefs and other senior civilians. And twice we brought in the entire senior Defense leadership, including the combatant commanders. One key point I would keep repeating, especially for the military, was that this was not driven by a reduction in the overall budget—money saved in some areas would be reinvested in programs of higher value.
All these meetings were a critical part of my strategy. One of the principal reasons previous secretaries—from Robert McNamara on—had failed to get Congress to go along with their recommended program changes was their exclusion of the military services from the decision-making process and the consequent opposition of the chiefs to their initiatives. I wanted the services intimately involved in the process, and I was prepared to give each service chief and secretary all the time he wanted to explain his views. Knowing that the services would often include programs in their budgets they didn’t want but were sure Congress would insist on, I told the chiefs that this time around they should include only programs they really wanted “and leave the politics to me.” I met at least four times with Army chief of staff George Casey and several times each with the other chiefs. Everyone had a chance to weigh in, not just on his own program but those of others as well. I wanted this to be a team effort, because when we were finished, I expected the chiefs, in particular, to support whatever decisions I made.
As I had told the president, previous efforts to cut programs had been leaked to Congress and the press early in the process, usually from the military service whose program was at risk. So at sensitive points in the debates, I prohibited circulation of briefing books and instead created limited access reading rooms where senior Defense officials had to go to prepare for the meetings. The huge staffs previously involved in the process were cut out. At the suggestion of Mike Mullen, I made everyone sign a nondisclosure statement. I signed the document and ultimately so did everyone else, after some grumbling. In other organizations, those agreements might not have meant much. But Mike and I knew what an oath and honor meant to military men and women—there was not a single leak during the entire process. I told no one except a small core group any of my final decisions until the day I announced them publicly. All of this drove the media and Congress nuts. Members of Congress would later complain about the use of “gag orders” and the lack of “transparency,” and I shot back that previous “transparency” had been the result of a flood of leaks, not official briefings.
As grandiose as it sounds, the magnitude of what I intended to do was unprecedented. Other secretaries had tried to cut or cap a handful of defense programs. We
were looking at more than sixty possibilities.
Ultimately I settled on nearly three dozen major programs that, if executed, would have cost about $330 billion over their lifetimes. Given my strategy to announce together all the changes I had in mind ahead of the regular budget process, we were lucky that by the time I was ready to go public, Congress was in recess. (In the hope of securing the neutrality, if not the support, of the leadership of the Armed Services and Appropriations Committees, we briefed them a few days before the announcement on the broad strategic context as well as the specifics. All those leaders supported most of my recommendations.) I believed the response of most media and pundits would be positive, so when Congress reconvened, those members attacking my decisions would be on the defensive. I thought announcing the changes all at once would “divide and conquer” members on the Hill. Previously, when only a few programs were proposed for elimination, affected members could build opposition coalitions by promising those who had no dog in the fight their vote on another issue in exchange. Going after dozens of programs made forming those coalitions much harder.
As for the larger defense industry companies, most of which have multiple contracts with the department, while many would lose in some areas, they would gain in areas where we would be increasing investments. This by and large minimized contractors’ opposition to my decisions.
It was important to make sure the president not only was supportive in principle but would stand behind me with a veto threat if necessary. On March 30, I told the president, Rahm Emanuel, Jim Jones, and OMB director Peter Orszag about each of the major recommendations. The president approved them all. Rahm, thinking of the political challenge ahead, asked me for a list of states and districts that would be most affected by the cuts and how many jobs were affected by each decision. The advantage for the president in all this was that it fit nicely into his theme of Defense reform. And, if it went badly, he could disown one or more of my proposals.
I went public on April 6. I talked about reshaping priorities for Defense on their merits, not to balance the books. I announced we would spend $11 billion to protect and fund the growth of the Army and Marine Corps and halt manpower reductions in the Air Force and Navy; add $400 million for medical research and development; institutionalize and increase funding in the base budget by $2.1 billion for programs to take care of the wounded and those suffering from traumatic brain injury and post-traumatic stress; and increase funding by $200 million for improvements in child care, spousal support, housing, and education. All together, funding for taking care of our troops and their families was increased by $3 billion.
I said we would increase base budget funding for intelligence, surveillance, and reconnaissance by $2 billion to deploy fifty Predator-class drone orbits, increase the number of turboprop Liberty aircraft to go after IED networks, and fund a number of ISR enhancements and developmental platforms “optimized for today’s battlefield”; $500 million more for acquiring and sustaining more helicopters and crews, “a capability in urgent demand in Afghanistan”; $500 million more for training and funding foreign militaries’ counterterrorism and stability operations; add more money for expanding our special operations capabilities, both in terms of people and specialized equipment; and add money for more littoral combat ships, a key capability for presence, stability, and counterinsurgency operations in coastal regions.
For conventional and strategic forces, I said we would accelerate the purchase of F-35 fifth-generation stealth fighters and buy more F/A-18 fighters to keep the Navy’s carrier wings fully equipped until the F-35s came on line; add $700 million to field more of our most capable theater missile defense systems; add $200 million to fund conversion of six additional Aegis ships to enhance ballistic missile defense capabilities; fund additional DDG-51 “Arleigh Burke” destroyers, a ship first built in the Reagan years but with additional modernization still best in class; add money to triple the number of students in our cyber warfare schools; proceed with the next generation Air Force tanker; and begin a replacement program for our ballistic missile submarines. I said we would also examine the need for a new Air Force bomber.
I realized that for the press and others, this was mostly ho-hum stuff. The real headlines were about the major programs to be cut or capped. The most significant was probably my decision to cap the F-22 stealth fighter at 187 aircraft. Ironically, I got tagged as the one who “killed” the F-22, but the program had had a long slide since the original proposal in 1986 for 750 aircraft. Over nearly twenty-five years, the F-22 program suffered almost as many cuts from as many hands as Julius Caesar had. Virtually every defense secretary except me wielded a knife. The manufacturers of the plane were very clever—the plane had suppliers in forty-four states, which made it important for eighty-eight senators. That made capping the number a battle royal.
Apart from cost, I had other problems with the F-22. It was an exquisite aircraft designed primarily to take on other fifth-generation aircraft (presumably Chinese) in air-to-air combat and penetrate and suppress sophisticated air defenses. But we had been at war for ten years, and the plane had not flown a single combat mission. I would ask the F-22’s defenders, even in the event of a conflict with China, where we were going to base a short-range aircraft like the F-22. Did its defenders think the Chinese wouldn’t destroy bases in Japan and elsewhere launching U.S. warplanes against them? All that said, one couldn’t quarrel when pilots said it was the best fighter in the world. After a hard fight, and with a presidential veto threatened, the Senate voted 58–40 in July to accede to our proposal to end production at 187 aircraft. The House of Representatives ultimately went along.
My cancellation of the new VH-71 presidential helicopter drew considerable attention. This program was a poster child for acquisition going off the rails. Over the years, the White House had added more and more important requirements—like added survivability, range, and passenger load—but also trivial ones such as more than six feet of interior clearance so the president wouldn’t have to stoop when he got on board, and a galley with a microwave oven. The Navy acquisition bureaucracy had also made expensive engineering changes that moved the helicopter further away from a commercial design intended to keep costs down. The development program for the helicopter had fallen six years behind schedule, and the cost had doubled to $13 billion. The five helicopters in the initial buy would have had half the range the White House wanted and just over half the range of the existing helicopters. I told President Obama he was about to buy a helicopter that in several respects was not as good as what he already had, that each would cost between $500 million and $1 billion—but that he could microwave a meal on it in the middle of a nuclear attack. As I expected, he thought the whole thing was a pretty bad idea. The concern on the Hill—especially from Jack Murtha and Bill Young—with the cancellation was that we had already spent $3.5 billion of the taxpayers’ money, and it would just be wasted. They were right. The blame belonged squarely on the White House, the Defense Department, the Navy (managing the contract), and the contractor.
I also canceled a couple of big parts of the missile defense program that simply couldn’t pass the giggle test. I guess they had survived until then because for some members of Congress, there was no such thing as a dollar wasted on missile defense. The first was the “kinetic energy interceptor,” intended to shoot down enemy missiles (for example, from China and Russia) right after launch. It had been canceled a year earlier by the Ballistic Missile Development Office but restored by Congress. Its five-year development program had stretched to fourteen, there had been no flight tests, and there had been little work on the third stage and none on the kill vehicle itself. The weapon had to be deployed in very close proximity to enemy launch sites, a real problem with respect to large countries such as Russia, China, or even Iran. And the missile was so large and heavy, it would have to be deployed either on a future ship specifically designed for it or as a ground-based launcher. The program’s cost had already increased from
$4.6 billion to $8.9 billion. I put a stake through its heart.
The so-called airborne laser, also designed to shoot down ballistic missiles right after launch, met the same fate. This chemical laser was to be deployed aboard a Boeing 747, but the laser had a range of only about fifty miles, and so the 747 would have to orbit close to enemy launch sites (usually deep inside their territory), a huge, lumbering sitting duck for air defense systems. To maintain constant coverage, a fleet of some ten to twenty of the aircraft would have been needed at a cost of $1.5 billion each, along with an estimated annual operating cost per airplane of about $100 million.
I also killed the Army’s Future Combat System, a highly sophisticated combination of vehicles, electronics, and communications with a projected cost in the range of $100 billion to $200 billion. The program, like so many in Defense, was designed for a clash of conventional armies. It was highly ambitious technologically, and there were serious doubts it would ever come to fruition at an acceptable cost. My major concern, though, was that the vehicle design did not take into account all we had learned in Iraq and Afghanistan about IEDs and other threats. I killed the vehicle part of the program, seeking a new approach, and the Army was able to use a number of the other technologies that had been developed.
Duty: Memoirs of a Secretary at War Page 41