Gates: Efficiencies remain, but aren't sufficient to meet cost cutting goals

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As he prepared to leave government service, Defense Secretary Robert Gates says there remain efficiencies to be had from departmental organization and overhead.

Gates launches an efficiency drive in 2010 that sought to redirect $100 billion of overhead costs spread over 5 years to higher-priority warfighting needs. In a May 24 speech at the American Enterprise Institute--an address Gates characterized as his "last major policy speech in Washington"--Gates said the military services found nearly that amount in efficiencies through facility closures and other measures. A freeze on civilian pay, an elimination or downgrading of more than 350 high-level positions and the closure of the Joint Forces Command produced another $54 billion in efficiencies, he added.

But, "there are still too many headquarters, offices and agencies employing too many high ranking personnel and contractors, consuming too many resources relative to real military missions and measurable results," Gates said.

Gates also criticized DoD financial management, calling the current apparatus for managing people and money across the department "woefully inadequate."

"The agencies, field activities, joint headquarters and support staff functions of the department operate as a semi-feudal system--an amalgam of fiefdoms without centralized mechanisms to allocate resources, track expenditures and measure results relative to the department's overall priorities," he added.

Efficiencies by themselves will not add up to the additional $400 billion over 12 years that President Barack Obama has said he wants trimmed from the Defense budget, Gates said. The $400 billion is not a dramatic cut since, spread out over a decade, it would keep the Defense budget just slightly lower than increases to match inflation, he said.

"Nonetheless, meeting this savings target will require real cuts given the escalating costs of so many parts of the defense budget, and as a result, real choices," Gates said. To that end, the Pentagon has launched a review that will examine health costs, retirement, force structure, and the long-standing war planning assumption that the United States must be able to fight two major regional wars at the same time.

For more:
- read the text of Gates' address to the American Enterprise Institute

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