Pentagon plays down report on $125 billion cost-cutting study

Wash. Post reported Pentagon leaders suppressed
report, fearing defense budget would be cut

WASHINGTON — The Pentagon and the White House on Tuesday played down a report that the Defense Department had discarded an internal study that found it had a bloated bureaucracy and could cut $125 billion in administrative costs over five years.

Pentagon press secretary Peter Cook said senior managers at the Pentagon concluded that the study, “while well-intentioned, had limited value” because it didn’t take into account existing programs to improve efficiency and because it lacked “specific, actionable recommendations appropriate to the department.”

The Washington Post reported Tuesday that the study, released in January 2015, recommended streamlining bureaucracy through personnel attrition, curtailing high-priced contractors and making better use of information technology. The report was prepared by the Defense Business Board, a panel of corporate executives and consultants from McKinsey and Company. It found that the Pentagon was spending almost a quarter of its budget on overhead and business operations.

The newspaper said Pentagon leaders suppressed the report fearing it could prompt Congress and the White House to cut the defense budget.

White House spokesman Josh Earnest disputed that it had been suppressed. He noted that a defense trade publication in early 2015 had written about the report and that at least as of Tuesday it was available on the Pentagon’s website.

Both Earnest and Cook said some cost-cutting reforms proposed by the Pentagon have been blocked by Congress.

“There are many self-described defense hawks and fiscal conservatives in the United States Congress who are blocking Pentagon-recommended reforms that would strengthen our military and save taxpayers billions of dollars,” Earnest told reporters aboard Air Force One. “That’s the real scandal.”

Cook said Defense Secretary Ash Carter has pushed for reforms, some of which he has been unable to get through Congress. The department is pushing for a new round of base closures and adjustments to health care fees.

Carter “agrees that we must continue to aggressively pursue efficiency especially in the times of constrained budgets,” Cook said. He spoke to reporters in Tokyo, where he was traveling with the Pentagon chief.

But a Democratic senator, Claire McCaskill of Missouri, said if the Post report is true, “the Pentagon played Congress and the American public for fools.” She said she would investigate in her role as the top Democrat on the Senate Homeland Security and Governmental Affairs Committee in the next Congress.

The chairmen of the House and Senate Armed Service committees issued a joint statement saying the report provided valuable data to the committees’ work aimed at reducing the Pentagon’s bureaucracy, “even if reasonable people can differ over the report’s assumptions and the unique challenge of government reform.”

Rep. Mac Thornberry of Texas and Sen. John McCain of Arizona also expressed concern that restrictions on the release of data behind the report “may have denied taxpayers the transparency they deserve.” They urged the Pentagon to make sure that all materials associated with the study are publicly available.