JEFFREY BROWN: And we turn to a hard new look at the nation's spending for its defense, and to Margaret Warner.
MARGARET WARNER: Yesterday, Defense Secretary Gates announced a new way of doing business at the Pentagon.
SECRETARY OF DEFENSE ROBERT GATES: The culture of endless money that has taken hold must be replaced by a culture of savings and restraint.
MARGARET WARNER: First on the chopping block, the Joint Forces Command based in Norfolk, Virginia. Its mission? To help unify the services with 2,800 military and civilian employees and 3,000 contractors.
ROBERT GATES: Training joint forces, generating joint forces, creating joint doctrine and experimenting with that doctrine are all valuable tasks. However, they do not necessarily require a separate four-star combatant command.
MARGARET WARNER: Gates also vowed to eliminate at least 50 general and admiral posts, 5 percent of the total, and 150 senior civilian ones. And he plans to cut spending on outside contractors by 10 percent a year for the next three years.
But Gates said that wouldn't apply to war zones, where contractors are vital.
ROBERT GATES: There are a lot of things contractors do that soldiers used to do: peel potatoes, do the dishes. I think contractors ought to do that stuff. If I have got a highly trained combat infantryman, I don't want him spending his time doing that stuff.
MARGARET WARNER: The Pentagon didn't specify how much these cuts would amount to. But Gates' overall goal is to save $100 billion over five years.
The announcement drew swift political fire from Virginia's Republican governor, Bob McDonnell.
GOV. BOB MCDONNELL, (R-Va.): To take and dismantle Joint Forces Command, which is an effective, efficient, low-cost joint command between all of our services, and scatter them to the four winds, I believe, is extremely shortsighted. This is a very bad decision, in my opinion, not only for Virginia, but for the United States military.
MARGARET WARNER: The state's two Democratic senators, Mark Warner and Jim Webb, joined in the criticism.
But President Obama backed his defense secretary's move, saying in a statement, "The funds saved will help us sustain the current force structure and make needed investments in modernization in a fiscally responsible way."
Pentagon spending has more than doubled over the past decade, with the U.S. waging wars in Iraq and Afghanistan. It's projected to top $700 billion next year.
So, what is Secretary Gates up to with these announced cuts and more in the pipeline?
For that, we turn to two defense experts, both former longtime Capitol Hill staffers. Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information, his latest book is "Military Reform: A Reference Handbook." And Thomas Donnelly, director of defense studies at the American Enterprise Institute.
Welcome, gentlemen, to you both.
Mr. Wheeler, beginning with you, what is Secretary Gates trying to accomplish here?
WINSLOW WHEELER, Center for Defense Information: He's announcing a continuum of decisions to try to internally transfer money inside the Pentagon from overhead to force structure.
It's important not to get too hyperventilated about what's going on here. The Department of Defense is at the highest ever spending level since the end of World War II. And since Secretary of Defense Rumsfeld, on September 10, 2001, complained that 50 percent of the Pentagon budget was overhead, it's grown since then.
The steps that Secretary Gates has announced are very welcome. They're the right thing to do. But they're only a modest step in the right direction. And they don't address at all the situation of the Department of Defense budget and our overall federal spending plan, where, if we're going to get anything under control, the defense budget has to be a part of the spending going south, not going north, as Secretary Gates would like to do, at a very modest, but still-going-north, 1 percent growth per year.
MARGARET WARNER: Tom Donnelly, he did say yesterday several times this is not a budget-cutting exercise, meaning what?
THOMAS DONNELLY, American Enterprise Institute: Well, he's trying to save his procurement budget, his weapons-buying budget, which has been shaved, even as the overall budget has grown, for fighting the wars primarily. But he's got more weapons programs on the books than he can afford. And he's really trying to save money, and, as Winslow said, for force structure.
MARGARET WARNER: So, in other words, he's saying, I can wrestle or wrest a lot of savings out of bureaucracy and overhead and actually -- but he kept saying, the money will stay with the services, use that for his priority.
THOMAS DONNELLY: Well, he was kind of hoping that it will.
MARGARET WARNER: Yes. Congress will have something to say about that.
THOMAS DONNELLY: Or the deficit commission. So, there's a lot of people are stalking the Defense Department to try to reap some savings.
MARGARET WARNER: So, back to you, Mr. Wheeler.
You're saying that the cuts he made -- announced yesterday, in themselves, are not very significant in dollar terms. Do you think they're significant in signaling an intention on his part?
WINSLOW WHEELER: Yes and no. It's important not -- again, not to overstate what he's doing. We're talking about some modest reductions in the growth of overhead since 2001.
But he's meeting -- as your setup piece showed, he's meeting some fierce resistance by the porkers on Capitol Hill. You know, the Virginia political delegation should be utterly ashamed of itself for suggesting that the nation needs to feed money to Virginia while the rest of the nation makes sacrifices in the defense budget.
He's got a serious -- Gates has a serious mountain to climb in terms of dealing with Congress on even these very modest issues. What I think we're seeing is that the powers-that-be on Capitol Hill in the defense committees, Arm Services and Appropriations, are not going to be the change agents for the new direction that the Pentagon budget is clearly going to be taking.
Those change agents are coming from other places, and the defense committees on Capitol Hill will be the defenders of business as usual. A likely change agent, if it succeeds -- and it's a big if -- is President Obama's deficit commission, where some pretty serious proposals are being considered about getting Pentagon overspending under control and doing it in a way that makes us better off, not worse off.
The worst possible situation is what Gates fears the most, which is business as usual at a lower spending level.
MARGARET WARNER: And so let me get back to you, Mr. Donnelly.
Do you think what he announced yesterday is significant in terms of what it is signaling about what he's going to do?
THOMAS DONNELLY: Only in an indirect way. It signals that Gates is worried. And he's right to be worried, because of the political background in which he's operating. The savings themselves and the numbers and the budgets aren't going to make that much of a difference. And, organizationally, taking down Joint Forces Command doesn't matter that much.
MARGARET WARNER: So, even though it's the only time a whole command has been taken down, nobody is going to object. Why?
THOMAS DONNELLY: It's not, honestly -- well, people will object. And, certainly, the Virginia delegation has already objected.
MARGARET WARNER: Yes, but I mean...
THOMAS DONNELLY: But I don't think it will go beyond that. There's not a huge constituency, outside the Virginia delegation, for this headquarters, not very high priority for people in uniform. And it's kind of an idea whose time has long since passed.
So, if there's a battle royal over this, I would be surprised. But, as Winslow suggests, the real battle is looming over the horizon, with all kinds of deficit reduction proposals that would look to target the Defense Department.
MARGARET WARNER: Now, let me stick with you for a minute, Mr. Donnelly. He said yesterday also several times he wants to reform the culture in the Pentagon. What's he at least talking about there?
THOMAS DONNELLY: Well, I think that's an overblown statement. I'm going to sound like I'm defending waste, fraud and abuse here. And I wouldn't do that, obviously.
But I think that's more political window dressing, because, again, when we're talking about looking at the actual proposals that he's making, it doesn't change that much. The bigger changes that Secretary Gates has already made are his program terminations.
That is a big change. But that happened 18 months ago. This is, I think, more about Secretary Gates reclaiming the -- the political high ground in trying to -- in that battle with Capitol Hill with those whose oxes are about to be gored.
MARGARET WARNER: But, Winslow Wheeler, what does this tell us about Bob Gates?
WINSLOW WHEELER: I think it's fair to say that he is one of the more remarkable secretaries of defense we have seen in a very long time, maybe since Robert McNamara in the 1960s, in terms of his willingness to take on the bureaucracy and the generals.
In the past, secretaries of defense have announced things like this. The bureaucracies ignored them. And the secretary has ignored his being ignored. Gates is very different from that. They have to pay attention to him. And they know, if they don't or if they go behind his back to Congress for rescue, there's going to be a price to pay, likely their jobs.
Gates has pretty much swept away the bureaucratic war fighting when he wants to. His problem is with Capitol Hill. And, as I say, he may be able to sort of sidestep Capitol Hill if he begins to understand that the change agents here that he may most usefully deal with are not the defense committees on Capitol Hill, but some other change agents.
MARGARET WARNER: Quick final word from you, Tom Donnelly. What do you think this says about Bob Gates?
THOMAS DONNELLY: He's become, in the last couple of years, not just a secretary of war, which is what was hired to do, but a secretary of defense trying to influence the institution, the military industrial complex, if you will, that's been built up since World War II. And it remains to be seen whether it will have a lasting effect.
MARGARET WARNER: All right, Tom Donnelly and Winslow Wheeler, thank you both.