Hagel weighs major reforms, Pentagon priorities

Driven by steep budget cuts and a changing national security environment, Defense Secretary Chuck Hagel is pushing forward with a comprehensive review of Pentagon strategies and operations, he said April 3 in Washington.

Speaking at National Defense University, Hagel reiterated the need for Defense Department leadership to reassess force and command structures and spending priorities, signaling potential major reforms that could change much of the way the Pentagon operates.

"The task ahead for the department is to prepare for the future, but not in a way that neglects the present," Hagel said. "We are therefore undertaking a process to develop options, choices and priorities to deal with further reductions in the defense budget...all anchored by the president's defense strategic guidance."

Hagel said his goal in the strategic choices and management review, led by Deputy Defense Secretary Ashton Carter and Joint Chiefs Chairman Gen. Martin Dempsey, "is to ensure we are realistically confronting the bulk of our strategic and fiscal challenges."

Hagel pointed out that there has been little in the way of changes to command structure since Goldwater-Nichols in 1986 – a reorganization effort that targeted interoperability, but did not account for costs and efficiencies, he said.

The secretary admitted that implementing sweeping reforms likely will require overcoming significant institutional resistance.

"It is already clear to me that any serious effort to reform and reshape our defense enterprise must confront the principal drivers of growth in the department's base budget – namely acquisitions, personnel costs and overhead."

Some of Hagel's decisions already have proved unpopular, even as he has taken steps to show solidarity. Acknowledging the damage to morale that looming furloughs are inflicting on DOD personnel; Hagel earlier in the week said he will voluntarily return part of his salary to match pay cuts resulting from the $41 billion in cuts the Pentagon must institute this fiscal year.

Despite receiving additional defense spending under the recently passed continuing resolution, civilian furloughs remain on track to happen, although at a reduced length of 14 days instead of the originally planned 22 days.

"I wish we had other options, but the reality is…we are dealing with a $41 billion shortfall that was not planned," Hagel said, adding that shoring up shortages of resources in DOD's most critical area of readiness must take priority. "We have to make decisions based on what we think is the most fair way to do this, but our readiness capabilities have to always come first, because it is the first mission of this institution. If we can do better, we will do better."

While readiness remains a top area of concern, Hagel also said he is focused on determining other priorities as the military draws down from Afghanistan and the threat landscape changes. And cybersecurity is a growing priority.

"Cyber attacks [that] barely registered as a threat a decade ago have grown into a defining security challenge, with potential adversaries [having the] ability to strike at America's security, energy and critical infrastructure with the benefit of anonymity and distance," Hagel said. "Most of the pressing security challenges today, and the most important political, economic and cultural elements, do not necessarily lend themselves to being resolved by conventional military strength."

In a statement issued after the speech, Rep. Howard P. "Buck" McKeon, (R-Calif.), chairman of the Armed Services Committee, said, "As encouraging as many of the secretary's remarks are, the fact that he is being driven to consider dramatic reform not because of strategic threats but because of an irrational budgetary environment remains troubling. The Armed Services Committee will do what it can to prevent the Pentagon from making ill considered short term cuts at the expense of long term strategic need. We cannot allow inadequate budgets to drive unacceptable strategies."