Defense Panel Recommends BRAC, Benefit Changes

A 17-member committee of retired defense leaders and corporate officials is calling for a new round of base closures as part of a plan to reduce Pentagon spending by $50 billion annually in coming years.

Speaking with reporters on Tuesday, members of the Defense Advisory Committee said the Defense Department is currently large enough to reshuffle missions without new construction and probably in a strong enough position to win political support for Base Realignment and Closure reviews.

In addition to a new round of BRAC, the committee also recommended reforming military retirement and health benefits and eliminating funding for unnecessary commissaries and exchanges. In its report, the panel suggested management reforms that would mean eliminating excess military and civilian personnel at headquarters and agency levels.

These BRAC and management changes, the committee contends, would shave nearly $22.5 billion from the Pentagon's budget each year.

"In the past, we were still large, we were not contracting -- we were probably growing -- and so it was necessary as we shut down a facility at 'Location A' to build more things at 'Location B,' " said Philip Odeen, former chairman of TRW Inc. who has served on various DoD panels and advisory groups. "This time, with a contracting military and a contracting support base, we think there is ample space at other locations [to absorb missions from other facilities], so a new larger investment in new building construction would not be needed."

He also envisions a Congress willing to go along with another BRAC round, notwithstanding the political pressure applied whenever a state stands to lose a military base or mission.

The politics "are difficult," he said, "but I think if you have a program done carefully, if you have the Joint Chiefs, the military leadership, behind it, I think there is a good chance that Congress will agree that these savings must be made if we're going to preserve our investment programs, and our modernization and [the] readiness of our forces."

The recommendations come in the face of nearly unanimous opposition in Congress to another BRAC round. Lawmakers rejected proposals from the top levels of Pentagon leadership who proposed restarting the process in line with sequestration cuts and force reductions.

A year ago, the same committee issued a report that expressed confidence that cuts required in the defense arena under the Budget Control Act would be done "rationally," and that Congress would not let indiscriminate cuts caused by sequester to occur.

"We were wrong," the committee acknowledged in its report. "Not only has sequester occurred in fiscal year 2013, but with no fiscal deal in sight it could occur again in fiscal year 2014 and subsequent years -- unless the Congress and the administration accept the reality of lower statutory budget levels."

The Budget Control Act requires the Pentagon to trim spending by nearly $500 billion over the next 10 years. The sequester cuts will mean another $500 billion over that period.

In doing its research, the committee looked at, among other things, what the private sector did when the bottom fell out of the economy with the Wall Street collapse in 2008. Odeen said overhead was among the first the first things to go.

"Before they cut into muscle; before they cut into operations, cut back in sales and marketing, they went into overhead accounts," he said. "This meant they cut loose people, costs, layers and facilities that they did not absolutely need, allowing them to spare the assets and people necessary for the company's success."

The panel estimated in its report that nearly $21.5 billion could be saved by changes to force structure to include cutting active forces necessary for protracted wars and nuclear forces. In doing so, the panel also emphasized the need to take advantage of the cost-effectiveness of the Guard and Reserve.

Finally, nearly $6 billion could be saved annually by reducing modernization costs in some areas, including slowing purchases of F-35s and ballistic missile submarines. The committee backs maintaining the long-range strike bomber program and increased acquisition of AEGIS destroyers for theater missile defenses.

Retired Gen. B.B. Bell, a committee member, said the U.S. needs to adopt a strategy based on defending vital U.S. interests.

But the county needs to resist getting involved in protracted ground wars such as Afghanistan and Iraq, and against insurgencies that do not directly impact vital U.S. interests or security, said Bell, former commander of U.S. Army, Europe and U.S. Forces, Korea.

"One could argue fairly persuasively that many if not all the contingency operations we have been involved in since the end of World War II have been of this nature," Bell said. "And not only have they bled our young men and women, but they have impacted extraordinarily negatively our [treasury], and with dubious results, in my view."