Chainsaws and flamethrowers are literally out for federal spending, and there is no bigger discretionary target than the U.S. military’s budget. Not only is Elon Musk’s Department of Government Efficiency gaining access to all of the feds’ digital systems in an effort to slash headcount, real property, and spending, but the Secretary of Defense just launched his own internal budget review.
The disruptors have arrived, and they are shaking up Washington. There is ample reason for enthusiasm and to sense opportunity amidst the change and uncertainty all this activity brings. That’s because the defense budget has traditionally been difficult to shift because it is largely spoken for by a variety of silent stakeholders. When everyone has a hand in the pie, it is hard to change flavors or offer something new.
Most defense spending is calcified in accounts with little flexibility even when senior leaders demand strategic choices or smart changes. The Silicon Valley model to “go fast and break things” will help bust up equity stakeholder positions and spend taxpayer funds better.
There will be plenty that doesn’t go right or that cuts too deeply, but this may be the last best hope for those who’ve been clamoring for change—most notably innovation and urgency at the Pentagon.
8% Defense Scrub for Reinvestment
Enter the cumulative budget drill to realign 40 percent of the defense budget over half a decade. In reality, this exercise is unlikely to reprioritize funds so steeply in such a short amount of time. But when this second Trump term concludes, the U.S. military is unlikely to look—or operate—like it does today.
With a goal of $50 billion in spending realignment per year, the new administration aims to field emerging technologies more rapidly while strengthening and broadening the industrial base. Their success will depend on where and how the adjustments are made—particularly given that there are 17 protected capability areas, which further squeezes the unprotected dollars.
While DEI and climate change initiatives have been singled out by the Secretary of Defense, the savings from cutting these programs are minor and will not cover the tab.
Big savings will require reductions in force structure, bureaucracy, and major weapons systems beyond the stated exemptions.
That could include major cuts to:
-large scale civilian worker reductions-in-force,
-defense medical research,
-fewer flag and general officers,
-smaller overall purchases of weapons like the F-35 Joint Strike Fighter,
-outright cancelations of so-called legacy systems like Armed Overwatch and HADES,
-environmental cleanup,
-Pentagon schools and grocery stores,
-foreign security assistance and humanitarian relief,
-consultancy contracts, especially for business modernization and I.T. enterprises,
-media subscriptions, software licenses, WinZip licenses, and virtual training software,
-shift to service-based contracts for support systems and enablers, and
-consolidated and closed headquarters, agencies and bases like AfriCom, EuCom, and the service’s systems commands.
It Costs Money to Save Money
Not to be overlooked are the costs of all of these savings. Involuntary separation of servicemembers incurs a validated fee on government typically equivalent to a percentage of the individual’s average weekly earnings during the previous year.
Civilian manpower cuts trigger severance settlements. These costs are separate from those incurred by the feds to pay for workers who then seek unemployment benefits, food stamps, or Medicaid or Affordable Care Act health insurance as a result of termination.
Similarly, curtailed weapons systems or defense service contracts induce a termination for convenience offset or similar settlement. The government also incurs obligations and significant lost time to manage statutory claims and administrative appeals processes as a result of these cutbacks.
So, too, base closures typically increase demand for new military construction of transferred capability and spike costs in order to relocate personnel. Then there are all the upfront costs incurred to close a base, including environmental restoration and mitigation activities, property management, disposal, and caretaker costs. Additionally the Department of Defense offers financial support for local communities that seek economic impact assistance as a result of base closures.
Who & What Are the Likely Winners?
While long and potentially pricey, leaders are likely to see all of this as necessary short-term pain to create significantly larger wedges to expand select current investments, incorporate brand new tools and assets into the operational force, and dramatically broaden the defense manufacturing and technology base.
The Pentagon. Image: Creative Commons.
The winners are not fully known until the Hegseth reinvestments are realized.
Still, some exempted capabilities could see early benefits, as well as likely additional targets to include:
-Collaborative Combat Aircraft (CCA),
-autonomy in general across the board,
-long-range survivable munitions,
-electronic warfare, constant comms/fiber mesh networks and maneuver battle management,
-space and satellites,
-air and missile defense,
-new energetics,
-counter-UAS and Replicator II, along with 1-way attack drones,
-counter-C5ISRT
-expanded capacity for capabilities like shipbuilding and munitions, and
-infrastructure refreshment and facilities updates.
Radical Change for the Biggest Bureaucracy on Earth
Beyond all the changes in what is purchased or let go are additional opportunities in this time of radical change and deconstruction. Opportunities include:
-new accounting, financial and oversight rules and regulations;
-separating the Defense Department’s capital and operating budgets;
-changes to promotions and career tracks for the all-volunteer force;
-shifting non-defense duties to other federal entities; and
-total overhaul of the Pentagon’s antiquated Soviet-style acquisition system and requirements processes.
A persistent challenge for policymakers is understanding why defense budgets are so high and buy so little tangible combat power. Eliminating or shifting spending that does not directly advance warfighting capability within the defense budget is a welcome and long-overdue effort.
About the Author: Mackenzie Eaglen
Now a 19FortyFive Contributing Editor, Mackenzie Eaglen is a senior fellow at the American Enterprise Institute (AEI), where she works on defense strategy, defense budgets, and military readiness. She is also a regular guest lecturer at universities, a member of the board of advisers of the Alexander Hamilton Society, and a member of the steering committee of the Leadership Council for Women in National Security.
