Huh, did we miss something? Secretary Gates’ $400 billion in savings can’t be located.

Pentagon’s Phantom Savings: $330B Claim Erodes as Programs Reappear
Marcus Weisgerber. Defense News, 16 May 2011.


Nearly 40 percent of that sum [$330 billion] is going straight back into U.S. military programs that replicate the canceled ones, and it’s unclear where another 10 percent came from at all, according to a Defense News analysis and to several analysts.

…many of the military services’ capability requirements remained in place. More than $130 billion is back on the books, or will be soon, for follow-on or replacement programs. Of the programs canceled in 2010, at least five have already been relaunched, or are in the planning stages to begin again.

Editor’s Comment:

When President Obama addressed the nation about the Federal deficit on April 13th he said, “Over the last two years, Secretary Gates has courageously taken on wasteful spending, saving $400 billion in current and future spending. I believe we can do that again.” A number of us military budget analysts looked at each other and said, “Huh, did we miss something?” We hadn’t notice any significant cuts in Pentagon spending that could count toward reducing the Federal deficit. Where did the President get that big number?

Of course, we had taken notice when Defense Secretary Gates had announced $78 billion in budget cuts for the FY12 five year defense plan. We noted that the DoD budget would still continue to grow, that some of these cuts were fairly soft (dependent on assumptions about future inflation rates) and most savings would be generated in the out-years. (See: Pentagon Resists Deficit Reduction)

And we had noted that Secretary Gates had cancelled a number of programs in 2009. But we also noted that many of the cancelled programs were being replaced by others substantially reducing the putative savings (see Gordon Adams, Defense Budgets: Still Need to Get it Right!)

In the days following the President’s speech we commented on how there was much less real savings than the President attributed to Secretary Gates’ “courageous” efforts. I pointed out that $68 billion of the January $78 billion in savings had been consumed when 2012 war costs appeared in the budget released in February, replacing small placeholder numbers.

Benjamin Friedman observed that “current ‘savings’ consist entirely of spending that the Pentagon reprogrammed and kept, and the future ‘savings’ come by reducing planned spending growth, rather than reducing actual spending.”

Carl Conetta reviewed the history of these supposed cuts going back to 2009 and compared successive Obama budgets, 2010 through 2012, finding no more than $233 billion in “maybe” DoD reductions in projected out years.

The collective skepticism of independent analysts about the $400 billion no doubt reached the attention of the editors of Defense News, the leading defense industry weekly, where Marcus Weisgerber sought to justify Secretary Gates’ claim of $330 billion in savings from the 2009 program cancellations. When DoD officials refused a request to give a program-by-program breakdown of the figure Defense News “used budget justification documents, DoD officials’ public statements, annual acquisition reports and Government Accountability Office estimates to project program costs. For classified and far-term programs not on the books – but factored into DoD’s projections – think tank and analysts’ estimates were used.” The Weisgerber article title, “Pentagon’s Phantom Savings“, sums up the results of Defense News’ effort to justify Secretary Gates’ claim of savings.

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