WASHINGTON — Defense Secretary Mark Esper on Tuesday confirmed his department spanning review won’t be limited to finding savings from “fourth estate” agencies, but will potentially involve cutting legacy programs that are diverting money away from next-generation projects needed to combat China and Russia.

Speaking at the SENEDIA industry conference in Rhode Island on Tuesday, Esper touted the forthcoming review by saying he was open to “divesting of legacy capabilities that simply aren’t suited” for future battlefields.

“My commitment is to look throughout the DoD enterprise, beginning with the fourth estate, and look for ways to find money to invest in those technologies,” he said.

Asked by reporters on his way back to Washington if he was willing to cut legacy programs loose to fund future capabilities, Esper said, “I’m looking for programs that don’t have as much value relative to another critical war-fighting capability, absolutely.”

“I’ve already found money, and it’s just going to be a long process," he added. “I have a dollar amount in mind but I want to make sure I can refine it a little better before I can release anything.”

An Aug. 2 memo kicked off a department-wide review of programs ahead of the development for the fiscal year 2021 budget request. The goal is to find savings and drive a “longer-term focus on structural reform, ensuring all [defense-wide] activities are aligned to the National Defense Strategy while evaluating the division of functions between defense-wide organizations and the military departments," per the document.

“No reform is too small, too bold or too controversial to be considered,” the memo reads, noting that there will be an emphasis on finding savings through the so-called “fourth estate,” internal DoD offices that don’t fall under one of the services, such as the Defense Intelligence Agency, the Defense Information Systems Agency, and the Missile Defense Agency.

While the memo, first reported by Inside Defense, was signed out by Deputy Secretary of Defense David Norquist, it makes clear the marching orders came from Esper, who as Army secretary spearheaded the now-infamous “night court” budgeting process.

Under that effort, the service took a hard look at legacy department programs and cut a number of them, refocusing funds on efforts to challenge China and Russia. Then-Army secretary Esper helped guide those restructurings through Congress, and the process, which found around $25 billion in savings, has garnered largely positive reviews.

So, is it fair to call Esper’s forthcoming review a larger version of the night court process?

“If you want to call it that, that’s fine with me,” the secretary said.

Chris Brose, a former staff director for the Senate Armed Services Committee who is now head of strategy for Anduril Industries, played a major role in attempts to reform the Pentagon from 2015 through 2018. Beyond fourth estate cuts, he believes Esper must make tough and far-reaching budget decisions to compete with China and Russia.

“The bigger thing I think and hope he will do is look at all the activities of the services through the context of the National Defense Strategy. That’s the most important impact you can have,” Brose said of Esper. “That, to me, is what bringing ‘night court’ to DoD really means. It’s not only figuring out how to close data centers or wring savings out of Defense Health Affairs.”

The defense secretary is uniquely empowered to look across all activities and make hard choices within and between the services. He should be asking the big questions about force design, force development, force structure, roles and missions, Brose said.

“Not only are those the most important questions, that’s where the real money is,” Brose said. “We’ve been saying a lot of the right things for a long time. The question is whether we can implement the things we say are important. Buying Thing 1 means you have to divest from Thing 2.”

And for Esper to be effective at making consequential and forward-looking changes, he will have to do what he did as Army secretary and personally lead the process, not delegate to a deputy or, say, the Office of Cost Assessment and Program Evaluation, Brose warned.

“The thing I can’t stress enough is the amount of his time he devotes to making this work will determine whether it succeeds or fails,” Brose said. “Unfortunately for many, many years, the secretary of defense has prioritized or been forced to prioritize jobs other than sitting in his office with senior decision makers and going through the gory details of programs and making hard decisions. Often, that gets kicked down.”

For his part, Esper indicated Tuesday he plans to stay directly involved ― as much as his other duties will allow.

"It’s a long road. I’m spending two hours a week, 90 minutes to two hours a week on this in formal session, so we’re just going to work our way through it week after week after week,” the secretary said.

Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.

Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.

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