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Stressing the need for a strategy-driven approach to trim Defense Department spending, Deputy Defense Secretary Ashton Carter on Wednesday cautioned Congress that “every dollar spent on bold, unnecessary programs is a dollar we lose for necessary programs.”
Recent steps by the armed services committees to restore certain cuts that the Pentagon proposed in the fiscal 2013 budget risk “hollowing out” the readiness of the all-volunteer force and upsetting the balance of the department’s long-term strategic portfolio, Carter said. “Others can pick one program they favor, but we have to balance them all,” he added.
In a speech at the American Enterprise Institute, Carter, the former Pentagon acquisition chief who was introduced as “the epitome of the defense intellectual,” said Congress is unwisely resisting the proposed new requirements that retired TRICARE beneficiaries pay higher premiums. “Health care is 10 percent of our budget, so we have to control spiraling costs, and we need these savings to back investments,” he said.
The same need also applies to planners’ proposals to defund some of the Air Force’s older single-purpose aircraft and some of its inter-theater and intra-theater “lift” capability such as use of C-130 transport planes, he said. In the new era of tight budgets and the winding down of protracted wars in Iraq and Afghanistan, “the Army and the Marines face the most titanic transitions, from a focus on counterintelligence and counterterrorism to the wider spectrum of the capabilities we need,” Carter said. “If they’re prohibited from reducing, it frustrates the ability of the Army and Marines to make those transitions for the future.”
Carter also took pains to assure contractors that “a vibrant and substantial defense industry is in our national interest.” As contractors adjust to changes in market forces, Defense Department managers “do keep an eye out for any changes that might be deleterious in the long run,” he said, counseling against a focus on short-run incentives such as those used in the financial and housing industries during the run-up to the 2008 financial crisis. The Pentagon should preserve key “skill sets from industry that if allowed to go away, will be expensive to re-create,” he said. Industry has been invited to identify those skill sets for the fiscal 2014 budget.
Beginning with the transition from the Pentagon’s leadership under former Defense Secretary Robert Gates to that of Leon Panetta, Carter reviewed the molding of the long-term defense strategy released in January after months of consultation among the Joint Chiefs of Staff, the secretary, and President Obama. The plan makes history-making cuts and focuses on Asia and the Pacific as opposed to Europe and the Middle East.