Corporate downsizing comes to the Pentagon
Last weekend, Scott Shane and Thom Shanker of the New York Times revealed just how much the White House has fallen in love with its fleet of Predator drones. "Disillusioned by huge costs and uncertain outcomes in Iraq and Afghanistan, the Obama administration has decisively embraced the drone, along with small-scale lightning raids like the one that killed Osama bin Laden in May, as the future of the fight against terrorist networks," the article explains.
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The drones and special operations raiders seem able to go anywhere and produce clean and spectacular results. Meanwhile, costly counterinsurgency (COIN) patrolling in Iraq arguably ruined George W. Bush's presidency and few of this year's crop of Republican presidential candidates seems eager to defend the COIN mission in Afghanistan or criticize Obama's decision to get out by 2014. For a Washington policymaker, the choice seems clear: machines are good, boots-on-the-ground are bad.
But this is only one reason why the logic of downsizing -- so effectively and ruthlessly used by corporate managers in the private sector to boost efficiency -- will soon be coming to the Pentagon. Just like General Motors and many other previously labor-intensive businesses, the Pentagon has a labor cost problem. And just like Corporate America, the solution to the Pentagon's labor cost problem will be the substitution of new weapons for soldiers, in an attempt to get more national security output per troop. The Army and the Marine Corps, the most labor intensive of the services, should brace for the bad news to come.
Recent defense think-tank reports explain how large the Pentagon's personnel costs have become and, if unaddressed, what a barrier they will be to the Pentagon's ability to adapt in the period ahead. According to the Center for Strategic and Budgetary Assessments (CSBA), the Pentagon's personnel costs (military and civilian and including fringe benefits) are now 45 percent of the department's "base" (non war-related) spending. With defense spending now scheduled to drop, perhaps dramatically, over the next decade, policymakers will have to take an ax to this 45 percent of the budget if there is to be a reasonable amount of funding remaining for equipment modernization and realistic military training.
The CSBA report also notes an impending explosion in the cost of veteran benefits, even as the number of living veterans is due to decline sharply over the next decade, Recently expanded educational, medical, and disability benefits are ballooning the VA's budget. Pentagon budget planners just received an order from the White House to transfer an additional $25 billion over the next ten years to the Veterans Administration in order to protect VA medical funding from cuts, one more consequence of personnel costs.
A report on Pentagon budget options released this week from the Center for a New American Security discussed how the United States might attempt to fulfill its traditional global security strategy under four increasingly onerous funding scenarios. All of the options presented relied heavily on manpower cuts to ground forces, reductions in the Pentagon's civilian workforce, and other cuts in support services. The report noted the huge savings the department could capture through reforms to retiree pensions and health care spending -- another parallel with General Motors and other old, struggling labor-intensive industries.
Even if the Pentagon didn't have a labor cost problem, policymakers would be loath to engage in more labor-intensive and costly ground campaigns. Military and industry leaders who can present seemingly attractive alternatives such as drones, special forces raids, and related procurement programs stand to be rewarded by Washington. Policymakers will view soon-to-be redundant ground forces as the logical targets for savings. Whether this turns out well remains to be seen. But for now, it is the budgetary path of least resistance.
The soldiers and civilians in the budget crosshairs will rightfully resent the unjust reward they will soon receive for their service. Their feelings will match those of their predecessors elsewhere in the private sector who received similar rough treatment. But just like Corporate America, the Pentagon is under great pressure to step up its productivity. And just like everywhere else, that will mean a boost to plans that replace soldiers with machines.
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