Speaking of the Department of Government Efficiency (DOGE), California Rep. Ro Khanna has an idea of where he’d like them to start:
I want the U.S. to have the greatest military in the world and the resources to counter increasingly sophisticated threats from our adversaries, but we need a more sensible approach. That is why I have been the only member on the House Armed Services Committee to vote against the bloated defense budget.
And that is why I look forward to working with the Department of Government Efficiency (DOGE) to reduce waste and fraud at the Pentagon, while strongly opposing any cuts to programs like Social Security, Medicare, the Department of Veterans Affairs or the Consumer Financial Protection Bureau. There are several areas of waste and abuse that I hope DOGE will address.
As a starter, consolidation in the defense industry has allowed companies to drive up prices. When I was a freshman member of Congress, I led an investigation on the House Oversight Committee into the defense contractor TransDigm, which through mergers had acquired exclusive rights to sole-source aircraft parts. A report from the Defense Department’s inspector general revealed the company had exploited the American people by overcharging over 4,000 percent on those sole-source parts. In the end, TransDigm returned $16.1 million to the Pentagon. Equally outrageous, a “60 Minutes” report found that the price of stinger missiles has increased from $25,000 in 1991 to $480,000 today. One reason is that Raytheon became the sole supplier and can drive up costs.
He goes on to single out the F-35, oppose sole source contracts, oppose cost-plus contracts, support divesting excessive military property, thereby reducing maintenance costs, and canceling projects the DoD no longer wants. Here’s a reform that hasn’t been on my radar:
One ingredient for effective price monitoring is better communication across the federal government to ensure the Pentagon isn’t paying more than any other department. The Defense Health Agency overpaid by $16.2 million for electric breast pumps, spending as much as $1,400 for pumps that are $192 in stores. The department’s acquisition processes lacks sufficient controls for defense contractors who can get away with overcharging the government. We have a phenomenal workforce, but they must be paired with state-of-the-art systems and policies to ensure contracts only go to qualified contractors with reasonable prices.
My own pet reform to our defense spending is that I believe that we need to reduce the number of flag officers substantially. That will do a lot more than the obvious saving in costs. Nearly every flag officer has a pet project he or she carries with her or him throughout their career and frequently even beyond. Reducing the number of flag officers will organically result in substantial cost savings.
Federal spending has escaped control, because there is no political benefit to cutting it or even stabilizing it. Regulatory control capture by “regulated” businesses is matched by Congressional control capture by federal clients. The basic policy is that the baseline funding for each federal department will increase by a fixed percentage each year. Not increasing spending, flat line spending, is called “budget cuts.” All of this became obvious, and was publicly discussed during the Clinton administration.
In consequence, today some 40% or so of federal spending is financed by borrowing, and the accumulated federal debt is increasing by about 10% per year. Interest payments on the debt now are larger than defense spending, exceeded only by Social Security/Medicare. In two years, or less, interest payments will exceed Social Security/Medicare, too, to become the largest single item in the budget.
It is politically impossible to stop this runaway spending. The only possible “cure” will be some sort of financial disaster, most likely default, which could happen because lenders may refuse to buy federal debt in sufficient amounts to cover the interest payment.
The current debt growth rate of 10% means that accumulated debt doubles every 7 years. So, we can expect accumulated federal debt to be $72 trillion by 2031, $144 trillion by 2038, $288 trillion by 2045. I don’t believe that will happen. The debt crisis will arrive much sooner, probably in less than 5 years.
All bets are off if the current wars in Ukraine and West Asia intensify and expand, which seems likely in both regions. Then, of course, there is the persistent attempt by our neocons to provoke a declaration of independence by Taiwan’s government.
I don’t think it’s quite “lost control”. As Joschka Fischer put it, they know what needs to be done. The just don’t know how they’ll keep their jobs if they do what needs to be done. Consequently, they do nothing.
It’s easy to say what the problems are, it’s a lot harder to address them.
For instance, there is industry consolidation, and unlike in decades past, most defense contractors do not have significant non-government business lines. How does one reverse that? I have no idea.
Bureaucracy and compliance costs are a huge drag on procurement and spending. It’s easy to say that those things should be reduced, but it’s much harder to make it happen, especially since so many requirements are written into law.
Procurement is massively complex. This chart is not a joke:
https://www.dau.edu/tools/interactive-defense-acquisition-life-cycle-wall-chart-major-capability-lane
Add in politics, the need/desire to maintain a decisive technological advantage over peers, the effect of having all eggs in a single basket (F-35), then the result is what we have today. Lots of people single out the F-35. Well, ok, what’s the alternative? Start the process over with a new contract bid for a new/competing platform? Sorry, that’s not going to work. We are stuck with the F-35, good or bad.
So many DoD functions have been turned over to contractors including fundamental stuff like flying and operating armed drones. Moving functions to be done by contractors comes with tradeoffs – they can be cost-saving in some instances and the opposite in others. And what happens when a big war comes – you can’t order contractors to do difficult things like you can with uniformed personnel.
So I’m skeptical. You really need a large bipartisan majority for reform, and that doesn’t look likely.
Do you have any actual data to support your claim about flag officers. My experience, limited though it was, suggests that junior flag officers are largely carrying out the projects selected by upper flag officers.
This is such a large topic that I would second Andy and add a few things. First, it’s hard to see things getting much better unless you fix Congress. Large military expenditures are mostly treated as jobs programs for states. It doesnt help that the defense industry is a jobs and enrichment program for former military and friends and family of individual senators and congressmen.
That said, my nephew’s partner does logistics for the Navy and son works in IT doing consultant work for the DoD on financial stuff. There is lots of room for improvement and many different levels. My sense is that if they let the logistics people have more say they could cut costs saving a few billions pretty easily, however, the line officers wont want to give up control. Still, the big money is mostly under control of Congress.
As an aside, I haver not kept up on this recently but in the past the IT systems used for military procurement were pretty awful. They could do worse than update those if that is still an issue.
Steve
Which claim? That there were too many or that flag they have pet projects, or that they continue to pursue their pet projects after retirement? That they have pet projects and continue to pursue them is based on firsthand experience. I’m confident Andy will back me up on that. I’m not the only person to bring that up.
As to the number see here.
Perhaps I should explain how I’m using the term “flag officers”. Basically, generals and admirals.
I’m skeptical that government at any level is capable of managing IT. My experience has been that their hardware is nearly always antiquated, their applications about 30 years out-of-date (regardless of when they were implemented), and far too much of their talent is homegrown. Consultants hired are based on connections rather than expertise.
I’ve long thought the way that we select and treat flag officers was flawed (people who reach flag ranks are usually identified early in their career). But I see the problems with flag officers as more of a symptom than a discrete problem.
There is also the issue of different skillsets. Compare and contrast, for example: Patton, Eisenhower, Groves. Each had distinct skills and they were given responsibility commensurate with those skills. Today, flag officers are treated more like generalist leaders/managers and that’s also the way they are developed.
Sounds like there is no actual data to support the idea that each flag officer has their own pet project. Anyway, Andy has pointed out another issue, of which there are many, many more. The system doesnt really reward specialization. Specializing in logistics would be seen as decreasing chances of promotion.
Steve