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Strategic Crossroads Creates Opportunity, Carter Says

By Claudette Roulo
American Forces Press Service

WASHINGTON, May 7, 2013 – The Defense Department is at a strategic crossroads, Deputy Defense Secretary Ash Carter told reporters at the National Press Club here today.

The transition from wars in Iraq and Afghanistan to a renewed political and economic focus on the Asia-Pacific region coincides with the need to absorb defense budget reductions in the interest of the nation's fiscal situation, he said.

"These two great historical currents are coming together," Carter said. "And it's my view that they can, if managed properly, reinforce one another.

"In terms of our responsibility to the American taxpayer, we know that, in making this strategic transition, we only deserve the amount of money we need,” he continued, “and not the amount of money we're used to.”

Well before sequestration became an issue, the Defense Department was already looking for ways to become more efficient, Carter said. The department has cut $487 billion from its budget over 10 years, he said. And during the tenure of former Defense Secretary Robert M. Gates, the department found significant savings by eliminating unneeded or underperforming acquisition programs.

Taken with cuts to overseas contingency operations funds, the reductions are similar in size and speed to budget cuts that have historically followed periods of extended conflict, Carter said, citing the Vietnam and Cold wars as examples.

"In order to execute the president's defense strategy, and to responsibly prepare for reductions in defense spending, we need to continue a relentless effort to make every defense dollar count," he said.

Carter said he began his effort to streamline defense spending when he previously served as undersecretary for acquisition, technology and logistics.

"Extended throughout the entire department, this means making hard choices and persuading our own bureaucracy, and ultimately the Congress, to support even the very hardest of them," the deputy secretary said. This includes eliminating programs with ballooning costs, he said.

The Iraq and Afghanistan wars delivered hard-earned lessons in the need for speed and agility in acquisitions, Carter said.

"We delivered the mine-resistant, ambush-protected all-terrain vehicle -- MRAP-ATV -- ... in less than 10 months," he said, "largely bypassing the ponderous acquisition system."

The most important economy came in lives saved and injuries avoided due to the speed with which the vehicle was fielded, Carter noted. “Something that’s truly priceless,” he added.

Outside of the acquisitions realm, there are many areas the department must do better, Carter said.

"Making better use of taxpayer dollars is important, not only in its own right -- since every dollar that's wasted could be used for the nation's defense -- but it’s also important in order to win the taxpayers’ confidence that they are getting full value for their defense dollar,” he said. “This is a confidence we must earn to get the public and congress to support a reasonable level of defense spending such as the president's budget contains."

Cost reductions will come from throughout the department, Carter said, but emphasis will be placed on reducing costs in department-level organizations, the Joint Staff, the Office of the Secretary of Defense and the combatant command staffs, which together represent a fifth of the defense budget.

"There are real savings to be realized here," he noted.

In a normal budgetary environment, an efficiency- and strategy-driven approach to defense would be sufficient, Carter said.

"But this budget environment is anything but normal," he added.

Sequestration is a distraction from the real strategic and managerial issues, the deputy defense secretary said.

"Sequester ... presumes that we take equal shares, or proportionate shares, from each and every part of the budget, which is the worst managerial approach possible," he said.

The entire leadership of the Defense Department is doing everything they can to mitigate sequester's effects on national security, Carter said. For example, he said, the president used his authority to protect military compensation. Funding for deployed forces also is being protected, the deputy secretary said, as are wounded warrior programs, the nuclear deterrent program and critical portions of homeland defense.

Despite these efforts, Carter said, the military will still face a crisis in readiness.

"We cannot protect or exempt most of our budget," he said. To avert this crisis, the department is preparing to ask Congress to permit the movement, or reprogramming, of funds between accounts, but by law only $7.5 billion can be moved in this way, the deputy secretary said.

"Reprogramming will help with much of the wartime [operations and maintenance] funding problem, but ... it's not large enough to address the sequester. We will still have to make large cuts in training and maintenance," he said.

The tragedy, Carter said, is that the damage to readiness and national security is not a result of economic emergency or a recession.

"It's not because defense cuts are the answer to the nation's overall fiscal challenges," he said.

"It's not in reaction to a sudden transformation to a more peaceful world; it's not due to a breakthrough in military technology or to a new strategic insight of some sort,” Carter continued. “It's not because paths of revenue growth and entitlement spending have been explored and exhausted. It's purely the collateral damage of political gridlock."

The DOD “can adjust to adapt to a wide range of contingencies, but this will be easiest if we have stability, time and flexibility," Carter said. "The president has submitted a budget that meets these goals."

The proposed fiscal year 2014 budget calls for $150 billion more in defense spending cuts than in fiscal year 13, but those cuts are spread out over time and largely occur after 2018, the deputy secretary said.

"While no agency wants to cut its budget, the president's plan is much more practical than the cuts that would occur under the Budget Control Act," he said. "We urgently need Congress to grant us stability, time and flexibility."

The department is committed to reducing its budget, he added, noting that "everything will be on the table" as part of an ongoing review of strategic choices and management ordered by Defense Secretary Chuck Hagel. Results of the review will begin to be delivered to Hagel in the coming weeks, Carter said.

"We in the Defense Department are prepared to make difficult strategic and budgetary choices,” the deputy secretary said. “We're also committed to finding new ways to improve the way we do business and obtain greater efficiency and productivity in defense spending.

“But in order to sustain our military's unrivaled strength, we need the cloud of sequester dispelled, not just moved to the horizon,” he added. “And we need a return to normal budgeting. Together with the Congress, we can then continue the great strategic transition upon which we have embarked.”


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