WASHINGTON ― As U.S. Defense Secretary Mark Esper launches a comprehensive review that promises to cut costs and target legacy programs that drain money from next-generation capabilities, he ought to gird himself for fights with lawmakers, defense industry lobbyists and perhaps the White House.
“The idea is to take a hard look at our activities so that everything we do drives towards our strategic objectives, which are designed to achieve our policy aims,” Esper said this week in describing the scope of the effort. “If something doesn’t, then we ask ourselves, ‘Why are we doing it?’ and ‘What should we be doing instead?’ “
While Esper is likely to find broad agreement that the Pentagon should take bold action in competing with Russia and China, he will almost definitely be fought on the specifics, as there are potentially billions of dollars in revenue for defense firms as well as local jobs on the line. Defense News interviewed several analysts and observers about the political challenges and how Esper might navigate them.
“There are plenty of people on Capitol Hill who understand we need to change and who believe it is important for the future effectiveness of the U.S. military. The problem, as it always is, is the devil’s in the details,” said Chris Brose, a former staff director for the Senate Armed Services Committee, now head of strategy for Anduril Industries. “People want to change until change hits their bottom line or takes something out of their state or district. But that in and of itself isn’t ‘game over.’ ”
To be sure, Esper — who was the chief lobbyist for weapons-maker Raytheon when President Donald Trump picked him to be Army secretary in 2017 — is probably well-aware of the dynamics. As his Army-wide “night court” review reduced, delayed or canceled 200 programs to free up about $25 billion, he saw industry and its representatives in Congress push for reversals.
Not all of those fights are over. The Army’s plans to scuttle a Block II upgrade of the CH-47F Chinook cargo helicopter, for example, triggered fears of layoffs at Boeing’s Philadelphia factory and a backlash from local lawmakers. After some wrangling, the Senate-passed policy bill backed the ground service, and the House-passed spending and policy bills added millions the Army didn’t request ― which means talks between the two chambers will have to reconcile the two approaches.
At a Washington think tank event in May, Esper said there will be new opportunities for industry, but he also pushed back on opponents of potential cuts. Forward-looking “general officers, who have been battle-tested for decades, and civilians, who have studied and war-gamed the future,” he said, have more credibility with him than industry’s “parochial” concerns.
“These professionals are motivated by nothing other than the intense desire to win the next war and bring our soldiers home safely,” Esper said. “While the bias for defense companies is to upgrade existing systems, the best way to build resilience into our industrial base is by adapting to the needs of the future, and meeting us there.”
One public advocate for the CH-47F upgrade said of the broader effort that Esper will run afoul of the White House unless he delays major acquisition changes until after the 2020 presidential election, particularly when there could be program cuts that equate to lost jobs in states Trump needs to secure the presidency.
Loren Thompson, a paid industry consultant and analyst with the Lexington Institute, was bearish on Esper’s chances of making a deep impact anytime soon.
“We’re too close to the presidential election, and nobody [at the White House] wants to lose votes by killing a program,” Thompson said. “If you want to accomplish a successful top-to-bottom review, you have to wait until a second Trump administration.”
“Can he accomplish trivial efficiencies? Sure, but if he wants to kill a major weapons program, if he wants to close a base, if he wants to eliminate a key benefit, forget it,” he added. “Every company that sees the possibility of a program being cut will mount a successful opposition effort on Capitol Hill.”
Trump would not be the first president to back off of defense cuts for political reasons, but he and his administration have been markedly vocal about protecting America’s defense-industrial base and the jobs it creates. Ahead of a reelection fundraiser in March in the bellwether state of Ohio, Trump visited a General Dynamics plant in Lima that makes the Stryker combat vehicle and the M1 Abrams tank. He delivered an hourlong speech in which he took credit for keeping the plant open.
In February, news broke of the Pentagon’s plan to find savings by canceling an overhaul of the aircraft carrier Harry S. Truman, even though that would have hurt the shipyard performing the work at Newport News, Va. That yard, a division of Huntington Ingalls Industries, is the state’s largest industrial employer. When Vice President Mike Pence visited Norfolk in April, he announced that Trump had intervened to scrap the Pentagon’s plan.
Defense secretaries at least as far back as Donald Rumsfeld in the early aughts have wanted to cut legacy programs to modernize, but the extent of Esper’s ambitions won’t be clear until the 2021 budget request, said Todd Harrison, director of defense budget analysis with the Center for Strategic and International Studies.
“The words have been said before and I think all of the previous [defense secretaries] meant it, but the question is how much political capital Esper wants to put at risk,” Harrison said.
Harrison suggested the 2021 budget may be the best ― or last, depending on the outcome of the presidential election ― opportunity for Esper to make a significant impact.
If Esper wants to follow a successful model, consider when then-Defense Secretary Bob Gates thwarted resistance to his budget cuts by sharing his plans early with industry, Capitol Hill and the White House, Harrison noted. Gates managed to balance a battery of program cuts with protecting high-priority programs, as he’s said to have argued to Lockheed Martin that scrapping the F-22 fighter would save the F-35 program.
“You have to be transparent, not just with Congress and industry, but also the White House,” Harrison said, “And it’s incumbent on DoD to pre-brief the White House on, ‘Here are the pros and cons of this decision.’ If it’s going to cost jobs, don’t let the White House be surprised by it.”
Mark Cancian, senior international security adviser with CSIS, said the Department of Defense already has a mechanism Esper could use: the annual budget and program review process. The secretary could take personal charge of it, though it’s typically convened by the deputy defense secretary with support from issue-based teams.
“Every recent secretary has conducted a review like this to squeeze the fourth estate, so there’s no low-hanging fruit left,” Cancian said, referring to a collection of agencies and field activities that fall under the Pentagon’s purview. “If you want any savings, you have to be willing to spend some political capital and accept some controversy.”
Esper could go for big savings by trying to close military bases, phase out dozens of on-base schools, move non-war-fighting medical research to the National Institutes of Health, or transfer military dependents and retirees on the military medical establishment to civilian sources. All of the above have constituencies that would be outraged.
How to do it? Another defense secretary who succeeded at cutting costs, Dick Cheney, managed to scare up support from lawmakers to authorize the Base Realignment and Closure process by threatening to close bases without it, Cancian recalled.
To Brose, the former staff director for the Senate Armed Services Committee, Esper must seize his chance to make tough and far-reaching budget decisions to compete with China and Russia ― beyond organizational tweaks. He’d best succeed if he personally takes charge, is transparent with Congress, makes allies of the winners in future modernization efforts and argues for change based on effectiveness rather than cost savings alone.
“Congress will always find money for the things it wants to buy, that’s an iron rule of the budget process,” Brose said. “So it can’t simply be about efficiencies, but a more effective future force.”