GWEN IFILL: Now: striking the balance between national security and budget reality.
CHUCK HAGEL, Secretary of Defense: Good afternoon.
GWEN IFILL: Defense Secretary Chuck Hagel laid out plans this afternoon to cut troops and close bases, reshaping the nation’s military after more than a decade of war.
CHUCK HAGEL: We are repositioning to focus on the strategic challenges and opportunities that will define our future: new technologies, new centers of power, and a world that is growing more volatile, more unpredictable, and in some instances more threatening to the United States.
GWEN IFILL: A key part of that repositioning, shrinking the Army from 522,000 active-duty soldiers to between 440,000-450,000, the fewest since World War II.
The Army National Guard would be reduced as well, but Hagel said it can be done without compromising national defense.
CHUCK HAGEL: Our analysis showed that this force would be capable of decisively defeating aggression in one major combat theater — as it must be — while also defending the homeland and supporting air and naval forces engaged in another theater.
GWEN IFILL: The budget also calls for eliminating the venerable A-10 Warthog aircraft, used for close air support of ground troops, and for replacing the iconic U-2 spy plane with a force of Global Hawk drones.
Among the other recommendations: increasing health insurance deductibles and co-pays for military families and retirees, reducing subsidies to military commissaries, and closing more military bases.
Hagel also proposes freezing salaries of generals and admirals and limiting pay raises for military personnel to 1 percent. He said delaying such decisions actually hurts morale.
CHUCK HAGEL: It needs to be done once so that our men and women and their families in uniform, those who have served and those who are thinking about serving don’t constantly live under this cloud of uncertainty and threat, of, well, what are they going to do next year? Are they going to take this out next year? I don’t want that. We can’t have that.
GWEN IFILL: The Pentagon budget proposal goes to Congress next week.
Today’s announcement was just the first salvo in what is likely to be a prolonged battle about policy and priorities.
Here to weigh those choices are Thomas Donnelly, a defense and security analyst at the American Enterprise Institute, and Gordon Adams, a top White House budget official for national security during the Clinton administration. He now teaches at American University.
Gordon Adams, how significant are Chuck Hagel’s proposals today and how necessary are they?
GORDON ADAMS, Former National Security Official: Well, I think they are certainly necessary. Gwen, I call this 50 percent towards reality. They have recognized that the budget is not going to grow the way they projected it would last year when they looked at the future.
This year, they’re saying, well, we will come down a bit. But it’s only 50 percent towards the reality because they still aren’t quite prepared to budget at the level that’s in the Budget Control Act of August 2011. And I think that’s the best they’re likely to do.
So, in a sense, it’s 50 percent towards the goal, but they’re not quite at the goal line yet in realistic budgeting terms.
GWEN IFILL: Are they cutting about right or are they cutting too deeply, Thomas Donnelly?
THOMAS DONNELLY, American Enterprise Institute: Well, Gordon’s quite right about the numbers.
They matched the numbers that was in the budget deal, the Ryan-Patty Murray budget deal for this year, but then they bumped the numbers up for the subsequent years above levels indicated in the budget control legislation. So they have got about $120 billion to $150 billion more to go to reach that level.
GWEN IFILL: OK, for people who don’t follow the budget…
THOMAS DONNELLY: That’s a lot. That’s a lot.
GWEN IFILL: … how necessary is it and how deep is it?
THOMAS DONNELLY: It’s deep.
It’s necessary budgetarily, but it’s a huge mistake strategically and for the health of the U.S. military services, I would say.
GWEN IFILL: OK. He just threw that in the middle.
GORDON ADAMS: Just threw that in the middle.
GWEN IFILL: Strategically. Why?
GORDON ADAMS: I will tell you something.
Bernard Brodie, who was one of the great strategic theorists of the 1950s and ’60s wrote a book on nuclear strategy and planning in which he had a chapter called “Strategy Wears a Dollar Sign.” The reality is that strategy and money are always related. They always will be. They always have been.
We’re coming down right now in the defense budget at about a pace like other drawdowns that we have done after Korea, after Vietnam, at the end of the Cold War. We have always come down somewhere around 30 percent in constant dollars from the top of spending to the way we reached the bottom. And we’re at the shallow end of that right now.
GWEN IFILL: Well, Thomas Donnelly, what does this strategy then tell us after where we are after 10 years of war and whether we’re going to continue to draw down?
THOMAS DONNELLY: The money quote in the clip you played from Secretary Hagel was that we are sizing the force for a one-war strategy, essentially.
For the United States and for any global power, two has always been the right number. Nobody wants to use all the force they have got in a single contingency, particularly for a global power, lest something else happens. We have accepted essentially a step backward from the traditional measure of what it means to be a great power.
GWEN IFILL: Even when some of the things that will get a lot of attention, but which are not necessarily the biggest ticket items, involve things like taking away the subsidy for commissaries and changing military benefits, is that separate in your mind, or are you thinking mostly of closing bases and hardware?
THOMAS DONNELLY: Well, all those things which really won’t immediately save that much money are going to be the most politically contentious, as we saw from the adjustment to health care co-pays in the budget deal.
GWEN IFILL: Right.
THOMAS DONNELLY: So, that’s going to mobilize the veterans groups to take to the streets. Not going to save that much money, and it’s not going to focus on these larger strategic and force sizing questions.
GWEN IFILL: And Secretary Hagel also raised the specter that there may be further sequestration down, across-the-board budget cuts.
GORDON ADAMS: Well, there may be, but I will tell you something, Gwen. I think what realistically the Pentagon needs to be planning to is the reality of the levels in the Budget Control Act, because I think that’s the best they’re going to do in the Pentagon over the next five years.
Instead of doing that, frankly…
GWEN IFILL: Does it do that?
GORDON ADAMS: It doesn’t do that.
Instead of doing that, what the secretary did was say let’s assume we have got $115 billion more over the next five years than the Budget Control Act would provide. What that does for the planning process in the Pentagon is mislead them, because if they’re only really going to get at Budget Control Act levels, but they start planning programs and force sizes and hardware choices at a higher level of spending, we will get out there in the next two or three years and they will suddenly discover they have got to cut things out that they have built into the plan. They baked it in. Now they got to bake it out.
GWEN IFILL: But is it even politically possible to even get what he’s asking for, let alone cutting even more deeply?
GORDON ADAMS: Well, as I said, I think the Budget Control Act level is about the best they will do, not the worst.
THOMAS DONNELLY: Predicting what the defense budget will be five years from now is always a recipe for tears.
So, who knows whether the politics and the domestic politics will change. But Gordon’s right. I mean, if the Budget Control Act is the ceiling, then they have got more homework to do. The question I would ask is not about inputs, about what we pay, but what we get back in terms of security. And that is going to go down too.
GWEN IFILL: Well, that’s the question. Are we — if we shift our focus from aircraft carriers and outdated, some people say, airplanes, and we shift them to cyber operations, special ops, is that the reality of where we’re heading now?
GORDON ADAMS: Well, I think that’s — it comes to a point that Tom made earlier that — when he said a planning scenario usually involves two big wars.
The reality is, I don’t think that’s the real world that we’re going into. As we have seen, you know, setting aside Iraq, which was a war of choice, not a war that we were thrown into, the reality is, if we’re going to use the forces, we’re going to be using them in smaller packages, smaller combats, different types of support, training operations, things that you can in fact, if you do it right, do well.
The problem that they have is they got a point-of-the-spear back office issue. They’re buying a lot of back office in this budget and in the past budgets, which is the administration and the Pentagon. If they want to be able the combat point of the spear, I think they have to tackle that back office more seriously than they have.
GWEN IFILL: The president — the secretary of defense today described this as a modest and necessary series of proposals. But a lot of oxes are going to be gored. You have been through this before.
What is your sense based on what — these kinds of debates that we have seen unfold, especially talking about shrinking, rather than adding, how realistic any of this is?
THOMAS DONNELLY: If they get the personnel measures through, I will buy Gordon a six-pack or something like that.
GORDON ADAMS: And I will accept.
THOMAS DONNELLY: That’s not going to happen.
GWEN IFILL: Not going to happen?
THOMAS DONNELLY: That’s not going to happen, no.
GORDON ADAMS: No, I agree with Tom on that. The personnel staff is the third rail of defense budgeting. You don’t go in there lightly and you go in well-armed.
Ryan-Murray said military retirees under 62 who are working full-time ought to get a pension COLA 1 percent less than the cost of the consumer price index. Within six weeks, that was deader than a doornail on the Hill, because the groups came up on the net. Congress people said, we’re not going to vote for that. Personnel is tough.
GWEN IFILL: But how about the hardware or the base closings?
GORDON ADAMS: Hardware is the easiest thing.
GWEN IFILL: That’s the easiest thing?
GORDON ADAMS: Yes.
THOMAS DONNELLY: But they’re not really cutting that much. The A-10, it’s a great airplane, but it’s been around a really long time.
And the things that they’re — and there’s not that much that’s new left to cut. So it’s very difficult to really get the dollar savings that they’re looking for. The big dollar savings are coming from the cuts in end strength.
GORDON ADAMS: That’s absolutely right.
We will go down in procurement due, because we always do in a drawdown. But there’s not — Tom is right — there’s not a lot there that you can find to take out.
GWEN IFILL: So, the battle just begins, at least on the budget.
GORDON ADAMS: We’re at the first stage.
GWEN IFILL: Gordon Adams, Thomas Donnelly, thank you both very much.
GORDON ADAMS: Thank you.
THOMAS DONNELLY: Thank you.