Does the Pentagon resemble General Motors?

Todd Harrison, a fellow at the Center for Strategic and Budgetary Assessments, wonders whether the U.S. Department of Defense will need a financial bailout, for many of the same reasons General Motors needed one.

His essay (also posted at the Stimson Center's excellent blog on national security spending) lists the similarities. Like GM, the DoD has personnel costs, including generous fringe benefits, that are weighing down the budget and making it more difficult for the Pentagon to adapt to changing circumstances. Second, like GM, the Pentagon's lengthy and turf-protecting decision-making process has resulted in acquisition programs that have not adjusted to changing times. Third, the slump in the economy is going to limit the Pentagon's "revenues" just like it is limiting GM's.

Harrison recommends weapons acquisition policies that are less technologically ambitious. More controversially, he recommends less generous fringe benefits for servicemen, especially retirement pay.

Rather than cutting compensation, those looking for savings, flexibility, and a more nimble military should examine the option of rolling back the headcount increases since 2003 in the Army and Marine Corps. According to a Congressional Budget Office study (see page 7), reducing the Army's headcount by 65,000 active and 9,200 reserve would save over $90 billion over 10 years. F-22s and DDG-1000s are not the only things that cost a lot of money.

With unresolved commitments in Iraq and Afghanistan, this sounds like a ridiculous idea. But the next leadership team at the Pentagon will face a very stressful budget challenge. The U.S. is facing asymmetric challenges on the high end (space systems, cyber, air and naval anti-access) and on the low end (terrorism, political subversion, global non-state challengers). Pentagon leaders will find themselves in the world after Iraq and Afghanistan, sooner I expect rather than later. What utility will the large general purpose ground forces built up for those wars have in the world after those wars?

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Any comparison of DoD to a private sector corporation is treading on very thin ice. The comparison is even less similar when one chooses an auto manufacturer. Certainly there are general similarities in the bureaucratic structures but that is pretty much where the comparison ends. An auto maker concentrates on producing automobiles. DoD has a huge range of functions that the governance of it is more akin to that of a medium size country. "Defense of the United States" is a broad, and somewhat ambiguous, "product."

GM is being bailed out because its leadership failed in their primary mission: to produce enough of their single product to pay for their expenses and still show a profit.

DoD is easy to pick on since its processes and governance are somewhat transparent, due to their revenues being the tax payers dollar. Yet DoD is a pretty good deal for the taxpayer since it consumes less than 5% of the GDP.

"Like GM, the DoD has personnel costs, including generous fringe benefits, that are weighing down the budget and making it more difficult for the Pentagon to adapt to changing circumstances." But unlike GM the military is inherently people intensive. Unlike GM, there are no people in DoD who make millions per year. Unlike GM, there are very highly trained individuals whose jobs cannot be replaced by robotics or quickly trained minimum wage employees. Unlike GM, some of DoDs personnel are asked to give life or limb in the accomplishment of their jobs.

"... DoD should begin taking steps to rein in personnel costs. For example, few employers today offer pensions (i.e. defined-benefit plans) and healthcare benefits for retirees--much less a package that becomes effective after only 20 years of service. But in the US military, people who enlist at 18 can retire and begin drawing a pension at only 38 years of age and have healthcare coverage for themselves and their dependents for life--while continuing to work full-time in a second career." This statement is patently misleading. An 18 year old can draw a pension at 38, but usually not sufficient enough to be able to cease work. There is a caveat in their pension in that they may be called back to active duty at the Services discretion. Their health care isnt totally free, although it is greatly subsidized, and they receive no dental benefits. Also the health care package only covers their spouse, with specific limits on what children receive (except in cases of handicapped children all health benefits terminate at either 21 or 23). Also health care is not necessarily "for life" but to age 65.

I think "including generous fringe benefits" is nary compensation enough for the empty chair.

Given the choice, Id rather see my tax dollars go towards "bailing out" DoD, an organization that has men and women sacrificing each and every day, then to a private sector company that failed due to mismanagement and greed.

"Like GM, the DoD has personnel costs, including generous fringe benefits, that are weighing down the budget and making it more difficult for the Pentagon to adapt to changing circumstances."

That's like comparing an organization that pays people to not work with an organization where people will work even if they don't get paid. In fact, that's exactly the comparison. GM paid union members to not work. They also attempted to sell products that nobody wanted.

The DoD is composed of troops who continue to serve even when their pay is cut off. Those troops provide a service that is indispensable and appreciated by all.

I've never seen a picket line or a strike with troops in uniform holding up signs demanding more pay, more benefits, or better working conditions. I have seen wounded Soldiers refuse medical attention, risk their lives to save others, give their lives in defense of others, and take pride in how unsafe their working conditions are.

We can create machines on short notice (MRAPs and C-IED devices, for example). We can modify existing machines to get the job done (UAVs and add-on armor for wheeled vehicles, for example). We cannot recruit and train more Soldiers on short notice. Quality personnel cannot be mass produced or fielded rapidly. Machines can.

A few points:

The Congress has an important role to play in keeping the defense budget in check. Military pork projects are still rampant on the Hill (read: John Murtha). I think both Sens. John McCain and Carl Levin deserve credit for attempting to fix the acquisition process.

With respect to right-sizing the force, it all depends on U.S. grand strategy. More specifically, it depends on the type of wars the U.S. will be required to fight in the future. If U.S. grand strategy emphasizes a nation-building role, then cutting forces won't be possible. If the U.S. goes the offshore balancing route, as advocated by folks like Christopher Layne, then significant land power reductions could be possible. It really comes down to U.S. grand strategy and I'm not sure what our current grand strategy is. Our grand strategy should lay the groundwork for our requirements generation and acquisition processes.

I am certainly not a Robert McNamara apologist, but he does deserve credit for implementing a more reasonable acquisition process by instituting the Planning, Programming, and Budgeting System (PPBS). Of course, the sad and tragic irony is that his overdependence and blind faith in quantitative analysis led him to fundamentally misread the situation in Vietnam by equating enemy body counts to strategic success.

I might first ask if the USG writ large looks like GM?

As for cutting the benefits of the small part of the U.S. population who serve, and the even smaller portion who volunteer to serve 20 or more years - I say before you touch even the smallest benefit that provide some measure of compensation for said serviceman (and women) and their families who bear the burden of fighting to advance U.S. interests, defend U.S. honor, or keep at a distance U.S. fears - look to cut back the benefits of politicians in the USG who carry a suite of benefits for even one term, and who often have the power to increase their own wages.

As for weapons, you get the military you pay for. Waging war is not efficient by nature.

The savings I think we might be looking for come as a result of considering when to use the military to achieve a policy end, and recognition that its never really as easy or painless as it seems. It probably also calls for more reason applied to the issue of "what, when, where and how" - all within the context of "why". These would be more along the lines of "war budget", or "policy budget", and less about "defense". However that would require us to consider foreign policy somewhat apart from domestic policy, and that is unlikely.

One other point, which is more expensive - sustaining the generation of a capability you expect to need, or scrapping it only to find out you do need it and you need it bad and by yesterday. One may cost you money, the other probably costs more money, and it costs in many other ways, and on more than one occassion in History its cost a nation its freedom or existence.

I beleive out of the things a federal authority might tax for the purposes of raising revenue for, provision of the common defense is probably the least nebulous.

Best, Rob

Does the Pentagon resemble the auto companies? It should, considering the impact that Robert MacNamera had on the organization...(there's your wokka wokka wokka for the day)

Thinking about this some more, and realizing the original must have been borne of ignorance (how that occurs in a time of war is a bit confusing though), I was thinking about some recent advice I got from an old salt who said: "when you go to get out or retire, ask your wife what bothers you physically because shell know better than you." That got me thinking about the culture of military service where sickness and pain are of the things that must be put aside because of commitment to something greater than ones self, and as such unless it is something that is truly de-habilitating and visible, and puts other at risk it is generally something to be overcame. Your spouse however notices everything, from how you walk, or act when nobody else is looking to how it affects you emotionally - they see you with your superman costume off.
This then calls for just a brief outline of the toll military service can take, lets go down an outline.

Musculoskeletal: the risks of jumping out of airplanes regardless of conditions - I have too many friends to mention who have sustained serious injuries from or related to jumping out of airplanes and the subsequent landing in the performance of their military service to which they have never fully recovered, but with which they continue to serve - often harder. Some I have known have died during what were called training jumps - somebody must have forgotten to tell the injuries they received. Well move on to other physical forms of military leisure such as forced marches with full gear for 12-25 miles (and that for the GPF), riding in combat vehicles - hey, did you know you can still get injured in those things during training? How about the strain on your body received from the type of physical conditioning required to stay in shape to do all the above with a heart rate that allows you to think and react to an enemy, or hold a steady sight picture so you can kill you nations enemies? There are more.

How about nervous system (stress from doing what others would not, and leading the sons and daughters of those who pay taxes), or circulatory (ever been folded up in vehicles and frames designed by people who had to meet load out specs, but never actually rode in them?). How about the hearing and sensory damage from repeated live fires - both the training kind and the two way rifle range sort - where IEDs and mortars are mixed in? For the Navy and Air Force folks maybe we should look at how hazardous working on flight decks in rough seas, landing on carriers, or sub duty can be? Maybe we should just call these environmental hazards and lump those in with the psychological, mental and spiritual associated with both training and combat - things like seeing dead folks and their body parts hanging from power lines after a SVBIED goes off - or the dead kids who just happened to be in the neighborhood, or God forbid it is your buddy.

My wife had a friend (civilian type) who said we should be grateful for what the government gives us. I told her to pound sand, our servicemen and women earned it, whats more it ought to be viewed as a down payment by a grateful nation where only a few actually serve. Her and her husband are fit, and have the same opportunity to serve as the those like them, the difference is they want to do what pleases them. I would not trade one veteran as a prospective citizen with full rights for 100 policians, or for that matter a 100 of much of anything. They desreve our unending gratitude and support, its a small price to pay for what they give.

Best, Rob

Notable position:

To set the stage, when you evaluate jobs in the military that are comparable to their civilian counter parts, you will find that the military pay bracket is significantly lower. It strikes me when discussions of "Cost Benefits," arises. "What is the price of freedom?" This is a volunteer force, and if it takes a lot of money to maintain it, then so be it.

We need patience when dealing with the two war fronts that our country is engaged with at the moment. Instead of cutting cost, we should cut down on the anti-war rhetoric that is hindering our efforts to achieve our strategic objectives.

By suggesting a force reduction, you are suggesting that the remaining "un-cut" forces bear the burden of defending our nation. In any capacity, that wont work. Spend the money, at whatever cost, to attain the equipment that will keep our Soldiers safe.

In my firm opinion, the USG should raise the defense budget to compensate our Warriors. These are tough times, and we are all feeling it. However, life will be tougher if we continue to let these extremist radicals flounder freely within our borders or anywhere else. If the powers that be can erase the horrific events from the past, life will be as we wanted it to be. Reducing personnel cost is not the answer.

Military life is tough enough as it is. Our Soldiers, though hardly ever advertised are working their hearts out to assimilate a normal family life. However, we tend to forget that portions of our familys welfare are taken away for the loud and proud RED, WHITE, and BLUE! My sentiments, Im sure are shared widely with fellow veterans. I scoff at the mere suggestion of taking away of what little our service men and women have, to save a few pennies.

"Like GM, the DoD has personnel costs, including generous fringe benefits, that are weighing down the budget and making it more difficult for the Pentagon to adapt to changing circumstances."

Would you take a minimum wage ($7.25) job that requires you to work 12 hour shifts, with no days off, in a hostile environment, constantly looking over your shoulder, and away from your loved ones for 6 to 12 months at a time? Nobody in their right mind in the civilian sector would look in the classified ads and say, "Thats the job I want." But if you add up the total cost of a new Soldier straight out of basic training that is deployed to Afghanistan or Iraq, they make less than minimum wage. This amount also includes the extra pay for serving in a hostile environment. Can you believe that?

This is something to think about before we make suggestions on reducing costs. Thank a Vet first, before you punch him in the gut.

v/r,
MCQ