SIMI VALLEY, California — The Pentagon has saved $5 billion through cuts to the departmentwide offices known as the “fourth estate,” Defense Department Secretary Mark Esper said during a keynote address at the Reagan National Defense Forum.

The savings were identified following a review initiated by Esper in August, soon after his confirmation.

“Within the department we are implementing aggressive reforms to free up time, money and manpower to put back into our highest priorities,” Esper said. “In just four months of work we have saved over $5 billion. By decreasing overhead, divesting legacy activities and reducing lower-priority programs, we are able to invest more in the war-fighting requirements of the services.”

The so-called fourth estate includes 27 agencies, such as the Defense Intelligence Agency, the Defense Information Systems Agency and the Missile Defense Agency. A September 2018 report from the Government Accountability Office estimated those agencies collectively have an annual budget of at least $106 billion.

Esper did note that the savings can only be realized with support from Capitol Hill.

“We can’t do this without the backing of Congress,” he said. “When our budget comes to the Hill next year, I ask you to support our proposals and enact the legislative changes needed to get these reforms across the finish line. And to be clear, this is just the beginning."

Esper expects every leader in each military service, in the Office of the Secretary of Defense, in the Joint Staff and in the combatant commands “to review their budgets with the same rigor, and reprioritize" to support the National Defense Strategy.

“We will continue this process from a clean sheet as we start looking at the 2021 budget to ensure we make the most of every taxpayer dollar,” Esper said.

An Aug. 2 memo kicked off the departmentwide review of programs ahead of the development for the fiscal 2021 budget request. Authored by Deputy Secretary of Defense David Norquist, but clearly the marching orders of Esper, the memo articulated a goal to find savings and drive a “longer-term focus on structural reform, ensuring all [defensewide] activities are aligned to the National Defense Strategy while evaluating the division of functions between defense-wide organizations and the military departments."

While the emphasis initially has been to find savings through the fourth estate, Esper said in late August that the review will potentially involve cutting legacy programs that are diverting money away from next-generation projects needed to combat China and Russia.

Jill Aitoro is editor of Defense News. She is also executive editor of Sightline Media's Business-to-Government group, including Defense News, C4ISRNET, Federal Times and Fifth Domain. She brings over 15 years’ experience in editing and reporting on defense and federal programs, policy, procurement, and technology.

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.

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