IT’S TIME TO UPGRADE THE DEFENSE DEPARTMENT

SEN. JOHN MCCAIN

NOVEMBER 10, 2015

http://warontherocks.com/2015/11/its-time-to-upgrade-the-defense-department/

The worldwide threats confronting our nation, now and in the future, have never been more complex, uncertain, and daunting. America will not succeed in the 21st century with anything less than the most innovative, agile, efficient, and effective defense organization. I have not met a senior civilian or military leader who thinks we have that today.

That’s why the Senate Armed Services Committee is conducting a major oversight initiative on the future of defense reform. The purpose of this effort is to ask what problems are impeding the performance of the Department of Defense, define these problems clearly, and rigorously consider what reforms may be necessary. Last month, we began a series of hearings to consider the strategic context and global challenges facing the United States, defense strategy, the future of warfare, the civilian and military organizations of the Department of Defense, and its acquisition, personnel, and management systems. Much of this is the legacy of the Goldwater-Nichols reforms that were enacted in 1986. These will be the subject of the committee’s hearing today.

In no way is this effort a criticism of the many patriotic, mission-focused public servants, both in and out of uniform, who sacrifice every day, here at home and around the world, to keep us safe. To the contrary, it is precisely because we have such outstanding people that we must strive to remove impediments in our defense organizations that would squander the talents of our troops and civil servants.

Some would argue that the main problems facing the Department of Defense come from the White House, the National Security Council staff, the interagency process, and the Congress. I couldn’t agree more, especially about the dysfunction of Congress. But as former Secretary of Defense Robert Gates told the committee at the start of our defense reform effort, the problems inside the Defense Department are real and serious.

In constant dollars, our nation is spending almost the same amount on defense as we were 30 years ago. But for this money today, we are getting 35 percent fewer combat brigades, 53 percent fewer ships, 63 percent fewer combat air squadrons, and significantly more overhead — though exactly how much is difficult to establish, because the Department of Defense does not even have complete and reliable data, as GAO has repeatedly found.Defense Spending vs. Active Combat Units, Fiscal Years 1985-2015 (FY16 constant $M). Source: CRS, CBO.

Of course, our armed forces are more capable now than 30 years ago, but our adversaries are also more capable — some exponentially so. At the same time, many of the weapons in our arsenal today — our aircraft, ships, tanks, fighting vehicles, rifles, missiles, and strategic forces — are the products of the military modernization of the 1980s. And no matter how much more capable our troops and weapons are today, they are not capable of being in two places at once.

Our declining combat capacity cannot be divorced from the problems in our defense acquisition system, which one high-level study summed up as follows:

[T]he defense acquisition system has basic problems that must be corrected. These problems are deeply entrenched and have developed over several decades from an increasingly bureaucratic and overregulated process. As a result, all too many of our weapon systems cost too much, take too long to develop, and, by the time they are fielded, incorporate obsolete technology.

Sounds right. But that was the Packard Commission, written in 1986. Since then, cost overruns and schedule delays on major defense acquisitions have only gotten worse. Defense programs are now nearly 50 percent over budget and, on average, over two years delayed. It is telling that perhaps the most significant defense procurement success story of the last several decades — the MRAP — was produced by going around the acquisition system, not through it.Major Defense Acquisition Programs : Percent Cost Growth and Schedule Delay, Fiscal Years 1999-2014. Source: GAO. Total costs include RDT&E, procurement, military construction, and acquisition operations and maintenance. The number of active programs changes from year to year as programs start and complete development.

The rising costs of our defense personnel system are also part of the problem. Over the past 30 years, the average fully-burdened cost per servicemember — all of the pays and lifetime benefits that military service now entails — has increased 270 percent.Growth in Average Fully-Burdened Personnel Cost, 1985-2015. Source: Department of Defense Comptroller. The fully-burdened personnel cost includes all pay, benefits, housing, healthcare and allowances.

And yet, all too often, the Department of Defense has sought to control these personnel costs by cutting operating forces, while civilian and military headquarters staffs have not shrunk (but sometimes grown). Indeed, from 1985 to 2015 the ratio of four-star officers to the total force increased by 65 percent. That’s because while the total force declined by 38 percent during that period, the number of officers stayed relatively constant.Growth of the Officer Corps Relative to Total Force, 1985-2014. Source: CRS.

These reductions in combat power have occurred while the Department’s overhead elements, especially its contractor workforce, have exploded. Nearly 1.1 million personnel now perform overhead activities in the defense agencies, the military departments, service staffs, and Washington Headquarters Services. An analysis by McKinsey and Companyfound that less than one-quarter of active duty troops were in combat roles, with a majority instead performing overhead activities. Recent studies by the Defense Business Board and others confirm that little has changed in this regard. The U.S. “tooth-to-tail” ratio is well below the global average, including such countries as Russia, India, and Brazil.Department of Defense Overhead Personnel. 1Contractor personnel not reported by all organizations. 2Includes all Military Department contractors. Source: FY15 Defense Manpower Requirements Report.

For years — decades, in some cases — GAO has identified some of the major management and administrative functions of the Department of Defense as being at high risk of waste, fraud, abuse, and duplication of effort. Perhaps none of this should be surprising when you consider the judgment of Jim Locher, the lead staffer on the Senate Armed Services Committee during the defense reorganization efforts three decades ago: “[T]he remedies applied by Goldwater-Nichols to defense management and administration have largely been ineffective. They were never a priority for the act’s drafters, and troubling trends remain. The Pentagon … is choking on bureaucracy.” He wrote that 14 years ago, and the problem has only gotten worse.

Ultimately, we must also ask whether the Defense Department is succeeding in its development and execution of strategy, policy, and plans. The Office of the Secretary of Defense, the service secretariats and service staffs, the Joint Staff, and the Combatant Commands are all bigger than ever. But is the quality of civilian oversight and control of the military better? Has the quality of military advice to civilian leaders improved? Are the joint duty assignments that our military officers must perform producing a more unified fighting force? In short, is the Department of Defense more successful at planning for war, waging war, and winning war?

Goldwater-Nichols was perhaps the most consequential defense reform since the creation of the Department of Defense. And yet, while the world has changed profoundly since 1986, the basic organization of the Department of Defense — as well as the roles and missions of its major civilian and military actors — has not changed all that much since Goldwater-Nichols. It must be asked: Is a 30-year-old defense organization equal to our present and future national security challenges?

Answering this question must be a forward-looking effort. Our task is to determine whether the Department of Defense and our armed forces are set up to be maximally successful amid our current and future national security challenges. The Senate Armed Services Committee will be guided in this effort by the same principles that inspired past defense reform efforts, including Goldwater-Nichols — enhancing civilian control of the military; improving military advice, operational effectiveness, and joint officer management; and providing for a better use of defense resources, among others.

This oversight initiative is not a set of solutions in search of problems. We will neither jump to conclusions nor address only symptoms. We will take the time to look deeply for the incentives and root causes that drive behavior. And we will always, always be guided by that all-important principle: First, do no harm.

It is my hope that the cause of reform will not be ours alone. Reforming, reshaping, and reimagining our defense institutions to meet the challenges of a more dangerous world will require drawing on the wisdom of our nation’s best defense experts, so many of whom are War on the Rocks contributors and readers. I hope our oversight initiative will start a broader conversation that will help inform and improve our reform efforts.

Finally, this must and will be a bipartisan endeavor. Defense reform is not a Republican or Democratic issue, and we will keep it that way. These are vital national security issues, and we must seek to build a consensus about how to improve the organization and operation of the Department of Defense in ways that can and will be advanced by whomever wins next year’s elections. Such bipartisanship is in keeping with the best traditions of the Senate Armed Services Committee and all those charged with providing for the common defense.

Senator John McCain (R-AZ) is the Chairman of the Senate Armed Services Committee.