Defense Cuts in the Flesh, Pt. 2

As we mentioned on Tuesday, Defense Secretary Leon Panetta was scheduled to roll out the strategic outline for the Pentagon's future. Earlier today, the Obama Administration released its strategic guidance report and held a press conference with both President Obama and Secretary Panetta speaking. The document does not go into specific policy details, but rather outlines the Pentagon's strategy and goals more broadly. Still, from the document, one can get a sense of some reductions we might be seeing in the President's budget next month.

Not surprisingly, with the drawdown of the wars in Iraq and Afghanistan, the number of ground forces will be reduced and the report indicates that the military's structure will emphasize more low-cost and "small-footprint" ways of carrying out its objectives. Although force reductions are already under way, it is quite possible that the Administration will choose to go further than scheduled.

Also, the report talks about making the Department run more efficiently. They do not go into specifics, but they mention the need to reduce manpower costs, reducing overhead, and implementing less costly business practices. It is notable that these broad goals sound similar to the policies that former Defense Secretary Robert Gates talked about a year ago (the "Gates efficiencies").

Beyond efficiencies, the report talks of reducing the rate of growth of military compensation and health care costs; however, it also mentions the need for sufficient support for veterans as they transition to the civilian workforce. The President's Submission to the Super Committee included small fees for TRICARE-for-Life and TRICARE recipients; one might expect this policy to be reprised in the Budget.

Finally, the report mentions that maintaining a sufficient nuclear weapons arsenal is important for deterrence purposes but indicates that this goal could be accomplished with a smaller nuclear force. This area has been a popular target for cuts among those who have proposed them (like the Sustainable Defense Task Force plan), so don't be surprised if this area takes a hit in the President's budget.

The defense cuts may not be in the flesh just yet, but we have a better idea of where President Obama may look to meet the defense spending caps. We will see the composition of policies that he uses next month in the FY 2013 budget proposal.