Secretary of Defense Chuck Hagel speaks April 3 about the defense budget at the National Defense University at Fort McNair in Washington. (Saul Loeb / AFP)
WASHINGTON — U.S. Defense Secretary Chuck Hagel has called for a sweeping overhaul of the military structure, similar to major organizational changes made under the 1980s Goldwater-Nichols Act.
Despite shrinking in size dramatically during the 1990s following the end of the Cold War, the military has not adapted. Large commands, led by three- and four-star generals, and elaborate support structures have remained intact, Hagel said during a speech Wednesday at National Defense University.
“Left unchecked, spiraling costs to sustain existing structures and institutions, provide benefits to personnel, and develop replacements for aging weapon platforms will eventually crowd out spending on procurement, operations and readiness — the budget categories that enable the military to be and stay prepared,” he said during the speech, his first major policy address as defense secretary.
Hagel said DoD reform efforts must confront personnel costs, overhead and acquisitions, the principal drivers of cost in the Pentagon budget.
Hagel also said he is concerned the military’s modernization strategy depends on systems that are “vastly more expensive and technologically risky than what was promised or budgeted for.”
Hagel said the Pentagon “should never be” run like a corporation but can learn from the private sector when it comes to reducing layers of middle and upper management.
“[W]e need to examine whether DoD is structured and incentivized to ask for more and do more, and that entails taking a hard look at requirements — how they are generated, and where they are generated from,” he said.
A decline in federal defense spending is driving the calls for change. The Pentagon is facing a $41 billion cut to its 2013 budget and a total of $500 billion from planned levels over the next decade, known as sequestration.
DoD needs time and flexibility from Congress to implement this level of change, Hagel said, and sequestration offers neither.
“[W]e will need to take a critical look at our military capabilities and ensure that our force structure and modernization plans are directly and truly aligned with the president’s strategy. That includes taking a new look at how we define and measure readiness and risk, and factor both into military requirements,” Hagel said.
“It also includes balancing the competing demands of capacity and capability — how much of any given platform we need, and how much capability it needs to have to fulfill real-world missions.”
DoD also needs to reassess how much it can depend on allies and partners.
A review of the Pentagon’s year-old military strategy will examine ways to institute these changes.
“Change that involves not just tweaking or chipping away at existing structures and practices, but where necessary fashioning entirely new ones that are better suited to 21st century realities and challenges,” Hagel said.
The last major overhaul of the military structure was in the 1980s. Goldwater-Nichols was drafted during the Reagan administration, a time of major defense build up. It increased jointness among the military services and established clear operational chains of command.
Cost and efficiency were not major considerations when developing that law, Hagel said.
During prepared testimony for his confirmation hearing, Hagel said that if confirmed he would evaluate the implementation of Goldwater-Nichols and make recommendations and modifications if necessary.
“At present I am aware of no need to make changes to the act,” he said during the hearing.
In a statement, Rep. Howard “Buck” McKeon, chairman of the House Armed Services Committee, said, “Secretary Hagel, like many of his predecessors, has laid out a bold agenda for reform. Many of the measures he recommends, like transforming outdated bureaucracies and cumbersome acquisition processes, are long overdue and should be executed absent the military’s current resource crisis. I look forward to working with Secretary Hagel to reform these institutions and have already initiated an examination of similar reforms for consideration as part of the National Defense Authorization Act.
“As encouraging as many of the secretary’s remarks are, the fact that he is being driven to consider dramatic reform not because of strategic threats but because of an irrational budgetary environment remains troubling. The Armed Services Committee will do what it can to prevent the Pentagon from making ill-considered short-term cuts at the expense of long-term strategic need. We cannot allow inadequate budgets to drive unacceptable strategies. “