DoD budget proposal includes $7.8B in cuts, transfers from Defense agencies

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The 2021 budget the Pentagon will roll out next week will include $5.7 billion in program reductions across the dozens of agencies that make up the Defense Department’s “fourth estate,” and $2.1 billion worth of additional functions that DoD wants to move from Defense agencies to the military services.

The figures are part of a summary of the Defense Wide Review Mark Esper, the Defense secretary, began shortly after his confirmation last year. Over the course of 21  sessions, Esper and Deputy Secretary David Norquist examined $99 billion in spending across DoD’s agencies and field activities.

The specific cuts and reallocations DoD is proposing won’t be known until next week’s budget proposal is released, but the Pentagon said they amounted to roughly 5.7% of total agency spending in the “Defense-wide” accounts.

Speaking at the Johns Hopkins School of Advanced International Studies on Thursday, Esper said the programs were being targeted for cuts not because they’re unimportant — but because DoD is looking for every dollar it can muster to reallocate toward the priorities in its National Defense Strategy.

“These savings will be invested in cutting-edge innovation and warfighting requirements of our core missions, including a strong and reliable nuclear deterrent, missile defense, hypersonics, AI, secure 5G technologies, the space force, and responsive force readiness,” he said.

Top-line numbers the Pentagon released Thursday indicate the largest chuck of reductions from the review process — $2.7 billion — will come from a category of agencies the department terms “Warfighting and Support.” That group includes such agencies as the Defense Threat Reduction Agency, Chem-Bio Defense Program, Defense Security Cooperation Agency, and counternarcotics programs.

Among the functions DoD wants to transfer from agencies to the military services, the largest category by far is “Personnel and Benefits,” at $1.9 billion. Again, the department has not yet specified which precise programs it wants to transfer, but the fourth estate funding that falls in that category includes the Defense Health Program, the DoD Education Activity, the Defense Commissary Agency, Defense Human Resources Activity, Civil Military Programs, Defense POW/MIA Accounting Agency, and the Office of Economic Adjustment.

And Defense agencies should expect more program reductions in the year to come. Esper has tasked DoD’s chief management officer, Lisa Hershman, to lead a more in-depth top-to-bottom review of fourth estate spending during the remainder of 2020.

A memo he signed last month told the secretaries of the Army, Navy and Air Force to launch similar bottom-up reviews in each of the military services, and Esper himself is overseeing a new round of reviews for DoD’s geographic and functional combatant commands.

Reviews for two of those COCOMs — U.S. Southern Command and U.S. Africa Command — are already underway. For those organizations in particular, Esper signaled on Thursday that reorienting their spending toward the NDS is likely to mean that DoD promotes a more “whole of government” approach that invites more involvement by non-Defense agencies, particularly the State Department and U.S. Agency for International Development.

First though, Esper said DoD needs to “get its own house in order.”

“We’ve begun scoping down the tasks and requirements,” he said. “One of the things the Joint Staff has done very effectively is to look at the tasks required of these COCOMs and what has built up over 15, 20, 25 years, and it’s in the hundreds. So we’re going through those and trimming them down and making sure we ask ourselves, ‘Is this still relevant today? If it’s relevant, is it still a high enough priority task?’ And that way I can scope that mission down to something that is far, far more appropriate and make the tough choices.”

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