By David Alexander
WASHINGTON (Reuters) - The Pentagon needs to stop stalling and start figuring out how to cut its budget by $50 billion annually for the foreseeable future in a way that preserves national security, defense analysts from across the political spectrum said on Thursday.
Warning that the department appeared to be clinging to the hope that Congress and the White House would eventually reverse the cuts, the analysts said the Pentagon needed to focus on factors that drive long-term cost growth, including overhead, compensation and acquisition.
"We are not getting the bang for the buck for the dollars we should in the Pentagon," said retired Marine Corps Major General Arnold Punaro, who led a task force that reviewed Pentagon overhead costs for then-Defense Secretary Robert Gates in 2010.
"If we don't make some fundamental changes ... in about 15 years, we will not have the strongest military ... because these three ticking time bombs are eating away at the core of our defense capability," he told a round-table at the conservative American Enterprise Institute.
The Pentagon is scrambling to reduce spending by $46 billion this fiscal year after a law requiring $500 billion in defense spending cuts over the next decade took effect on March 1. The cuts came as the department was implementing a $487 billion cut over the same period that went into force last year.
The Pentagon's 2013 budget has also been under stress because of Congress' failure to appropriate funds for the government this year.
Congress alleviated some of those issues on Thursday when it approved funding for the government for the rest of the year. But it left in place the budget cuts required under the automatic reductions, known as sequestration.
The Pentagon welcomed the measure and postponed for two weeks a decision on how many of the nearly 800,000 civilian defense employees would have to be placed on unpaid leave for as many as 22 days during the rest of the fiscal year.
'DOESN'T MAKE ANY SENSE'
The 2014 budget proposal the Pentagon sent to the White House last month did not include the $50 billion in automatic cuts scheduled for that year and the Defense Department has not been asked for revised figures, officials said.
The White House posted a plan on its website this week that seeks to avert the automatic cuts through budget cuts and revenue increases. The White House plan would replace the $500 billion of defense cuts over the next decade with a $100 billion cut, to be implemented over five years beginning in 2019.
The defense analysts expressed skepticism about the plan, which likely faces stiff resistance from Republicans who have vowed to oppose more tax increases.
"That's a scenario that doesn't make any sense at all except in la-la land because those aren't real cuts," said Gordon Adams, an analyst with the Stimson Center who worked on defense budgets while at the White House during the Clinton presidency.
Todd Harrison, a defense budget analyst at the Center for Strategic and Budgetary Assessments, said the White House and Defense Department approach to the budget cut was to "deny it, put it off, assume it's going to go away at some point."
"The reality is they need to start planning for this staying in effect, and even if they start right now it's a little too late," he said, noting the department would have to begin laying off personnel next year when more cuts go into effect.
Mackenzie Eaglen, a defense analyst at the American Enterprise Institute, urged the Pentagon to tackle the tough issues of compensation, overhead and base closures, some of the thorniest issues politically but factors that have been driving up defense costs for years.
Punaro said the cost of the Defense Department's "massive and inefficient overhead," at $218 billion a year, was greater than the economy of the entire state of Israel.
"If you just look at the Office of the Secretary of Defense, the Joint Chiefs of Staff, the combatant commands and the defense agencies ... there's over 250,000 people, $116 billion a year," he said.
"There's not a trigger-puller in that lot. There's nobody with a sharp bayonet in that group," said Punaro, adding that of the top 12 defense contractors, half were agencies of the Pentagon.
(Editing by Peter Cooney)
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