While collectively the measures amounted to an earthquake inside the department, only my recommendation to close the Joint Forces Command in Norfolk, Virginia, was controversial on the outside. Its role was to infuse, or occasionally compel, “jointness”—the military services working together—in everything the military did: train joint forces, create joint doctrine, and experiment with that doctrine. I said those goals remained important, but much progress had been made since the command was created, and it no longer required a four-star combatant command, 2,800 military and civilian positions, 2,000 contractors, and a billion-dollar budget to accomplish the mission. The Virginia congressional delegation went wild. A couple of the congressmen became my worst enemies on the Hill and would remain so throughout the rest of my tenure as secretary.
Even as we were devising and implementing these efficiencies that summer and fall, we were negotiating with OMB over the size of the FY2012 budget. My proposal was exactly the same set of numbers that former OMB director Orszag and I had agreed to—and the president had blessed—in November 2009. Under a new director, Jack Lew, OMB walked away from that agreement and proposed instead a $20 billion reduction from our request and wanted to cut the five-year defense program by $148 billion in projected spending. It quickly got ugly.
On November 24, I gave the president a long memo summarizing our progress on the efficiencies initiative since my August announcement, reporting that the military services had indeed come up with $100 billion in overhead savings over five years, to be applied to increasing our capabilities. I also said we had identified a further $20 billion in department-wide savings over the same time period, which we intended also to plow back into “tooth.” I briefed him in more detail on November 30, with Mullen, Lew, and Donilon present. With regard to the dispute with OMB over the current and future budget numbers, Obama told me to “work out” the number with OMB. I met with Lew for an hour on December 3, and while the meeting was friendly, we didn’t make much progress.
On December 14, Obama met with me, Cartwright, Lew, and Donilon for the budget endgame. I offered to cut our FY2012 request to $555 billion and make further cuts of $63 billion over the following five years—a considerable concession, I thought, given our agreement of the previous year. The president said we had to do better. He talked about the budget crisis and the deficit and cuts he was making to domestic programs. He said he couldn’t slash domestic spending and leave Defense with real growth. I reminded him that he had agreed we could keep all the savings we identified for reinvestment. I said I recognized the challenges facing the country, but that Defense should get credit for the cuts we had already made.
At that point, I intemperately told Obama that I could break the Defense Department, put hundreds of thousands of people out of work, and wreck programs, but that wasn’t in the country’s interest. He then asked Lew and me to continue talking.
The next morning I called Lew and told him we could cut another $1 billion (to $554 billion) for FY2012 and a total of $78 billion over the five years—“and that’s it.” The president called me after lunch and was somewhat apologetic, saying with respect to our meeting the day before, “At least you didn’t yell at me.”
That same afternoon, the fifteenth, I was waiting alone in Donilon’s office for my regular weekly meeting with him and Hillary (they were both in with Obama) when the door opened and the president walked in carrying a gift-wrapped package. He gave it to me, and I unwrapped an expensive bottle of vodka. Enclosed was a handwritten note: “Dear Bob, Sorry I drive you to drink. Barack Obama.” It was a very thoughtful peace offering.
In truth, I was extremely angry with President Obama on the afternoon of the fourteenth. I felt he had breached faith with me both on the budget numbers for FY2012–16 that Orszag, Emanuel, and I had agreed on—with Obama’s approval—in the fall of 2009, and on the promise that Defense could keep all the efficiencies savings for reinvestment in military capabilities. I felt like all the work we had done in the efficiencies effort had been unrewarded and, further, that I had been forced to break my word to the military services. As in the spring with “Don’t Ask, Don’t Tell,” I felt that agreements with the Obama White House were good for only as long as they were politically convenient.
In the end, we got about the same amount of money—roughly $530 billion—in FY2011 as in FY2010. Budgetary pressure on Defense would only increase for the rest of the time I was secretary and well beyond.
Nonetheless, we continued our efficiencies endeavor. On January 6, 2011, I gave a status report to the Pentagon press corps detailing the savings each of the services had made to reach the $100 billion mark. I outlined an additional $78 billion in savings that came from department-wide reductions, mainly in information technology, contracting, workforce size, general officer and flag officer positions, civilian executive positions, and intelligence organizations. I announced the cancellation of a number of additional procurement programs, the most controversial of which was the Marine Corps decision to cancel the expeditionary fighting vehicle, an amphibious assault vehicle that had proven far more costly than anticipated and that would have excessively high operating costs.
I then elaborated the areas in which the services would invest their overhead savings: a new long-range bomber for the Air Force; modernizing the Army’s battle fleet of armored vehicles; and additional ships, F/A-18s, and unmanned strike and surveillance aircraft for the Navy. I said we would make more investments in long-range and regional missile defense. As it turned out, I was able to return virtually all of the $100 billion in savings to the services for “must pay” bills such as fuel price increases, and for reinvestment. The $78 billion in departmental savings was applied to the reduced budget levels in the future. The effort to reallocate funds through the efficiencies initiative had been successful, but actually realizing those savings would require very tight discipline and top-down managerial toughness for the entire projected five-year period. That would be a high hurdle indeed.
I have long believed that the way to change bureaucratic culture and performance is not through reorganization but by affecting day-to-day operations and ways of doing things. You need to get at the essence of what people are doing and encourage, incentivize, or force them to alter behavior. The crux of what I was trying to accomplish through the efficiencies effort was to pry open all the components of the defense budget that cost hundreds of billions of dollars but didn’t get close scrutiny either within the Pentagon or by Congress. We needed to get at that daily “river of money” running through the building, as my Bush-era deputy Gordon England had so eloquently put it. We made a beginning, but only that.
As the Defense Department continues to face deep budget cuts, the effort to cut overhead costs must be intensified; as we learned from the “efficiencies” exercise, such efforts can succeed only if enforced from the top with regular reporting and strict accountability.
RESPITE
My last full year as secretary, 2010, was my toughest because of the multiple fronts on which I was fighting. The only thing that kept me going was getting out of the Pentagon and being around the troops. There is not much about being secretary of defense in wartime that is fun, but there are moments.
In May, I helicoptered into an open area at Eglin Air Force Base in Florida as a couple of hundred exhausted, hungry men training to be Army Rangers emerged from the deep woods to assemble for a few words from me. One of my key staff people, Ryan McCarthy, had been a Ranger captain, and he alerted me that these guys had not eaten or slept in days and were filthy and barely conscious. He told me that ordinarily they would not remember me or my visit. But, he said, if you bring them frozen Snickers candy bars, they will never forget you. He added that I should make the soldiers eat while I was talking because if they didn’t, their instructors would take the candy away from them after I left. I’ll never forget the look on those soldiers’ faces as we hauled coolers full of Snickers bars out of the helicopter to pass out to them. Months later I was still hearing from parents and friends of those soldiers who had heard about my visit.