The problem at State goes deeper. Management has never been Foggy Bottom's strong suit, and its shrinking reputation for effectiveness bears witness to that reality. The only secretaries who truly focused on how the department worked were Larry Eagleburger and Colin Powell; the rest have hunkered down on the seventh floor and let the building grind on with minimal attention. Clinton has been there long enough to try to make a dent in the reform of State Department management. QDDR notwithstanding, it was not much of a dent; most of the challenges remain for the next incumbent.
Management is the problem. Is a senatorial nominee up to it?
I have written much about the challenges at DOD. While adjustments in strategy are important, they are not the most important challenge. We live in a relatively secure, not a more dangerous world. The security challenges are complex, but nothing like the existential threat America faced during the Cold War.
The real challenge at the Pentagon is how to wrangle the services' unending budgetary appetite to the ground and tackle three fundamental problems. These problems have led for years to defense budgets that are unreasonably high but, at best, the problems have only an indirect impact on capability.
First, the Pentagon's out-of-control acquisition system. For 70 years, the United States has spent too much on programs that cost significantly more than the Pentagon expects, arrive behind schedule, and provide less capability than promised (leading to more spending). It doesn't matter when or where you look -- the C-5 airlifter, the B-1A bomber, the M1-A2 tank, the next-generation carrier -- they all share this trait. It will take a tough leader to control the services' unchanging desire to underbudget for hardware programs (that's how you squeeze them in), and hold at bay the contractor's equally unerring instinct to undercost the same programs. Not a senatorial instinct.
Second is the Pentagon's out-of-control back office. McKinsey did a study in 2010 that said the Pentagon had the biggest overhead compared to combat forces of 29 countries, including Russia, China, and most of our NATO allies. Only Switzerland was worse. That same year a Pentagon advisory group, the Defense Business Board said that 560,000 active duty forces never deploy. That's a big back office. Cutting it means saying no, and no again, and lowering funding levels to force efficiencies. Not a senatorial instinct.
Third is the compensation and benefits system at DOD. Compensation has been raised substantially and, for years, pay increases were indeed needed. But catch-up has been done; in a drawdown, pay needs to be used as a force management tool, not a peanut butter spread of wage increases. Healthcare costs, which have doubled in the past 10 years to $60 billion, are out of control, as the last two secretaries have repeatedly pointed out, and Congress keeps making it hard to enforce discipline on health benefits. The retirement system rewards nobody before 20 years of service, and everybody, regardless of age, once the 20 years are in. It's the third rail of Pentagon planning; are senators up to the challenge of taking it on?
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