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From the QDR to the NDP
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Our intent in sponsoring this legislation, was to drive the defense debate to a strategy- based assessment of our future military requirements and capabilities, not to do a budget- driven incremental massage of the status-quo. Senator Joseph Lieberman (D-CT), a key sponsor of QDR/NDP enabling legislation, 19 May 1997, just after the release of the QDR. For purposes of fiscal planning, the QDR projected stable annual defense budgets of roughly $250 billion in constant FY 1997 dollars. Report of the Quadrennial Defense Review |
| Table Of Contents |
Summary of QDR Policy Issues and Politics Since May 1997 1
Despite the wishes of the congressional backers of the Quadrennial Defense Review (QDR) that it be driven by strategic requirements and not by budget considerations, it is clear from the QDR itself that consensus within the Pentagon formed around a budget target. For the exercise of exploring alternative postures, "each of which reflects a somewhat different 'path' toward meeting the challenges of the projected security environment," 2 the budget was held as a constant and details of the posture were varied. A strategic approach would construct alternative postures that can carry out national strategy at similar levels of risk. Extremely expensive posture options might be eliminated as unrealistic and wasteful, but options below, at, and somewhat above current expenditure levels would certainly all be relevant. These options were absent from the QDR.
This is important partly because QDR recommendations driven by budget targets have impacted the way in which the debate about the QDR has unfolded since. The most persistent criticism of the QDR's predecessor, the Bottom Up Review (BUR), was that its budget levels did not adequately support its force posture. This criticism became more compelling as time went on and savings were harder to collect from using the surplus equipment of the large Cold War force instead of procuring new items. The QDR's principal answer to the growing budget pressure was to reduce end strength by 5% and find additional savings from base closings and O&M reforms such as out-sourcing and privatization of depot work. In that way the Pentagon hoped to relieve the budget pressure on a posture that remains essentially the same (excepting the modest adjustment in size) as that of the BUR before it.
Reductions in the Reserve Components
The QDR's recommendations look to preserve many of the programs dear to the military services (and industry) and recommends considerable reductions in Reserve Component force structure and additional base closings -- a surefire recipe for heartburn among legislators. Jason Sherman, "QDR: Marginal Changes," Armed Forces Journal International, June 1997 |
After the release of the QDR on May 19, 1997 the first strong response was from the National Guard which felt it had not been consulted adequately in the QDR process and had been blind-sided by the size of the cut they were asked to take (Army reserve components were reduced by 45,000 -- a 7.8% cut.) Even before the QDR was released Major General Edward J. Philbin (Ret.) of the National Guard Association was writing that: "The Army made not even a pretense of obtaining expert input from the Army Guard...the final analysis was nothing more than a numbers game, devoid of national strategy and rife with ancient Army bias against -- and animus toward -- the Army Guard." 3 Leaders of the Guard protested that they were asked to take much deeper cuts than the active component which had not yet been reduced to its planned minimum end strength. Secretary Cohen responded May 27th to "the evidence of discord" 4 within the Army by ordering an "Off-site" meeting to resolve internal disputes. On May 29th Assistant Secretary of the Army for Manpower and Reserve Affairs Sara Lister weighed in with a complaint that the proposed cut of 33,700 civilians from the Army structure had not been discussed with her. A National Guard source said civilian cuts were favored by the Army because cuts to the active and reserve components had already been discounted by the Congressional budgeting process and would save no money (the Army had been given a target of saving $2 billion from personnel.) 5 When the "Off-site" ended on June 4th there was agreement that the reserve components would be cut 20,000 by FY-02, civilian personnel would be reduced by 17,400 by FY-06, and 15,000 would be cut from active forces by FY-99. The remaining 25,000 in cuts to the reserve components would be postponed until after FY-02, giving both sides of the issue time to work the political process. It was also agreed that the National Guard's 15 enhanced brigades would have slightly lower "manning" levels, but the Guard extracted a pledge that these brigades would be kept at a 90% level of readiness. Left unresolved was an Army proposal to convert heavy National Guard divisions to a light configuration requiring fewer soldiers.
The active/reserve/civilian tensions and disputes did not end with the June "Off-site" meeting. On 9 September Assistant Secretary Sara Lister and Army Vice Chief of Staff General Ronald Griffith issued a memo summarizing the "Off-site" agreement. This memo brought sharp rebuke by Guard and Reserve leaders on 23 September. The Guard complained that eleven principles governing active Army support of the National Guard which the ARNG had pressed for and won at the "Off-site" had been downgraded to "goals" by DoD and that force structure reductions were being insinuated by DoD when only end strength reductions were agreed upon. The Army Reserve leaders complained that reductions in active military technicians must be compensated by increased full time support to Reserve units -- language in the memo suggested to them the possibility of DoD reneging on this commitment. 6
In response to a question about his views on the "Off-site" agreement, Army Chief of Staff General Dennis Reimer, whose self-stated responsibility is to the Total Force, said, "...ultimately this boils down to resources...I think if you are not getting enough resources to do all the things that they want done in the 11 principles, then you have to have a funding philosophy that, basically, centers around the first-to-fight units." 7
Base Closures
The QDR's end strength reductions are logically connected to further base closures. The QDR found "enough excess base structure to warrant two additional rounds of BRAC (Base Realignment and Closure Commission) similar in scale to those of 1993 and 1995." 8 The proposed BRAC rounds would be in 1999 and 2001. Congressional response to the proposed BRAC rounds was generally hostile. In particular, lawmakers cited a lack of trust generated by the Administration's decision to "privatize in place" two facilities marked for closure by the 1995 BRAC; this was considered to be political interference in the non-partisan BRAC process. 9
As early as June high ranking Air Force officers were asserting that without BRAC authority and "a very aggressive program of out-sourcing and privatization" they would not be able to meet the end strength reductions called for in the QDR. 10 In August a senior Navy official confirmed that end strength reductions for the Navy would likewise be difficult without BRAC. 11
We need to deregulate defense just as we have deregulated many other American industries so we can reap the cost and creativity benefits of wide-open private competition. A guiding principle of the American government is that the government should not perform private sector-type functions, and this should also be true of the defense sector unless a compelling military need is demonstrated. William S. Cohen, The Secretary's Message, Report of the Quadrennial Defense Review, May 1997
However, congressional skepticism was affirmed by a July GAO report, titled "Military Bases: Lessons
Learned from Prior Base Closure Rounds." The report stated that "net savings were not generated as
quickly as initially estimated because of the costs of closing bases and environmental clean-up were high
and offset the savings. Further, data on expected savings have been difficult to obtain..." 12 By summer's
end legislation for a new round of BRAC was considered a dead letter for at least the remainder of this year.
Depot Maintenance Out-sourcing
The QDR called for relaxation of the so-called "60-40" rule (10 USC Section 2466) that prohibits more than 40% of depot maintenance work from being out-sourced to competitive bid by private contractors. As reported by Jason Sherman,
Cohen is looking to mine additional dollars for weapon modernization by introducing free-
market forces to the military's infrastructure business. His message to Congress is simple: "If
you want to keep bases, then you can't expect to modernize. If you want to hold on to
facilities, then you will not protect your forces as well." This line of reasoning echoes with
recommendations of the 1995 Commission on Roles and Missions (CORM), a 1996 Defense
Science Board (DSB) task force, and the QDR's National Defense Panel, all of which believe the
military's massive infrastructure is monstrously inefficient. 13
When the QDR's depot reform reached Congress the reception was cool. The opposition was led by the bi-partisan depot caucus, some of whom's members had lost depot work in their districts when the President won the "privatization in-place" of two bases which the 1995 BRAC had recommended closed. Opponents of the privatization point to GAO studies that show that privatization actually drives up costs and an Army study showing the costs of private contractor work during the Gulf War considerably higher than similar work by federal employees. 14
As Congress nears its annual recess in November 1997 it looks like a compromise may emerge. The immediate issue of the two privatized bases would be solved by allowing private contractors and public depots to compete for work, albeit under a series of restrictions. Public depots would gain an office of arbitration within the DoD through which to expeditiously appeal controversial decisions. The compromise would accept the QDR's desired 50-50 public-private formula, but new categories of private contractor work would be added to the calculation, diluting the effect of the nominal change. 15
If a compromise on depot work is achieved it will likely both slow the realization of any savings and
decrease their magnitude. When this effect is added to the refusal of Congress to approve new rounds of
BRAC and the postponement of reserve component end-strength reductions it becomes clear that much
of the budgetary impact of the QDR is evaporating. It is likely that the FY99 DoD budget debate will reveal
a force structure still too big and modernization plans too ambitious to be supported by a $250 billion
budget.
It's not going to be easy because we have something called the National Defense
Panel also that will question what is being done. They'll say it's not visionary
enough... And you say well that's great, it's great to have vision, but you've got
to deal with today as well. So it's going to be balancing the needs of -- meeting
the realities of today's threats with anticipating those of tomorrow and then try
to structure yourself in a way that allows you to make the kind of investment
that will get you there. Secretary William S. Cohen, news briefing excerpt, 16 April 1997 The National Defense Panel (NDP) was appointed by Secretary Cohen in February 1997. Of its nine
members, five are retired or reserve military officers and four are civilians, three of whom have served as
officials in the DoD. In addition, as critics have pointed out, four of the members of the panel, including
its Chair, Philip Odeen, are defense contractor executives. 16 As mandated by statute, the NDP met and gave an initial assessment of the QDR in May. In its assessment
the NDP called attention to what it perceives as its unique role to consider the longer term, ensuring the
"incorporation of the revolution in military affairs, increased effectiveness of functions carried out in
space, and development of intelligence capabilities to meet the challenges of the 21st Century." Although the "Panel view[ed] the QDR as a significant step forward," their assessment noted areas of
difference in "emphasis and priorities." Among these were
The Panel also had serious doubts about the reliability of the QDR's budget goals. The assessment states:
Although the NDP took several rounds of public testimony from defense specialists in the Spring, it has
essentially operated in executive session since. In August, Panel Chair, Philip Odeen, speaking at a
symposium in McLean, VA. stated that after numerous consultations with experts in the U.S. and abroad
he did "not view Russia as likely to become a 'serious military competitor' to the United States within the
2015 to 2020 time frame..." 18 Such an assessment could foreshadow a recommendation to decrease
conventional structure in the next decade to help pay for modernization and experimentation for a
post-2015 strategic environment. However, a September story in Defense News 19 based on interviews with a Panel member stated that the
Panel "is likely to recommend protecting several high-tech projects, but offer[s] no advice on how to pay
for them." The sources indicated that the Panel was leaning toward "a smaller, 30- to 40- page report
laying out what warfare may look like past 2010, and the capabilities the U.S. military will need to fight
then." To counter future threats "emphasis must be placed on stealth, precision, range and mobility." The
Panel may endorse the concept of a "budget wedge" of development funding for priority capabilities and
technologies that could be expanded in the future to meet threats as they arise. On October 9, 1997 Inside the Pentagon reported
Speaking at a symposium in Washington on October 13th Philip Odeen stressed that part of the
"transformation strategy" that the Panel favors is "increase[d] experimentation as a way of hedging
against the unknown of the future..." He identified a "general need to devote increased resources to
research and development, advanced concept technology demonstrations, prototyping new weapon
systems, and conducting major experiments in future warfighting..." Odeen said that DoD may need $10
billion a year, starting in four or five years, to underwrite the transformation. 21 Inside the Pentagon's October 16, 1997 report on the Odeen briefing includes the following list of topics
"emphasized" in the upcoming report: The apparent decision of the NDP to not specify areas or programs to cut from the QDR plans has already
elicited Congressional criticism. Inside the Pentagon quotes one Senate staffer as saying, "...any real
transition strategy must involve some recognition of a need for disinvestment as well as investment."
Congressional aides expressed concern that the NDP would default the hard choices back to the Pentagon,
"to a bureaucratic process specifically aimed at not alienating any of the services..." 22
Summary of Reporting on the Likely Findings of the NDP
The funding necessary to attain the constant $60B procurement goal beginning in 2001 and hence,
satisfy the Defense Strategy, rests on several key assumptions either specified or implied:
...the National Defense Panel is likely to recommend a broad shake-up or "transformation" of
the way the United States develops and conducts national security policy, and not just from
the perspective of the Defense Department...Little to date has been done in the way of
fulfilling the specific language of the law that requested the panel to craft an alternative
analysis. No concrete recommendations on force elements or force structure have been
made. Odeen said the panel will not address specific numbers of units, but it will suggest new
technologies and concepts the department should exploit... 20
Transformation challenges
Enablers/barriers
... the Panel believes that its greatest contribution lies in setting directions for the future and in identifying paths to meet them. We do not intend to propose specific numbers of systems or organizations that should make up future forces. Philip A. Odeen, "Opening Remarks: Testimony Before the National Security Committee," 16 April 1997 |
Footnotes
1. Principal sources for this summary are: Defense News, Army Times Publishing Co., 6883 Commercial Dr., Springfield, VA 22159-0400, subscription - $99; Inside the Pentagon, P.O. Box 7167, Ben Franklin Station, Washington, DC 20044, subscription - $795; and Armed Forces Journal International, 8201 Greensboro Drive, Suite 611, McLean, VA 22102, subscription - $38.
2. Office of the Secretary of Defense, Report of the Quadrennial Defense Review, May 1997, p 19.
3. Edward Philbin, "We Don't Like It and We Won't Take It," National Guard Magazine, June 1997.
4. See "Cohen Memo to Army on End strength Reductions" in Inside the Pentagon, 29 May 1997.
5. See "Army Civilians Struggle with Military to Set 'Offsite' Agenda," Inside the Pentagon, 5 June 1997.
6. See "Guard, Reserve Leaders Issue Memos Rejecting Army 'Offsite' Summary," Inside the Pentagon, 25 September 1997.
7. John G. Roos, "View from the Top," AFJI, October, 1997, p 24.
8. Report of the Quadrennial Defense Review, Office of the Secretary of Defense, 15 May 1997, p 54.
9. See "Lawmakers Eye Various Concepts for Revising Base Closure Process," Inside the Pentagon, 5 June 1997.
10. See "Without BRAC Authority, USAF's QDR End strength Cuts Limited," Inside the Pentagon, 12 June 1997.
11. See "Two Services Cannot Achieve Full QDR Personnel Cuts Without BRAC," Inside the Pentagon, 21 August 1997.
12. See "GAO Lists Lessons Learned for Future Base Closure Rounds," Inside the Pentagon, 31 July 1997.
13. Jason Sherman, "QDR Lays Difficult Recommendations At Congress's Feet," AFJI, July 1997, p 6.
14. Jason Sherman, "The Depot Dilemma," AFJI, October 1997, p 10.
15. "Depot Maintenance Compromise Under Review by Congress, Pentagon," Inside the Pentagon, 16 October 1997, p 4.
16. Miriam Pemberton and Martha Honey, "Military Peer Review," The Nation, 26 May 1997, p 24.
17. The National Defense Panel, "Assessment of the May 1997 Quadrennial Defense Review," May, 1997.
18. "NDP Chairman: Russia Unable to Act as 'Serious Military Competitor'," Inside the Pentagon, 14 August 1997, p 22.
19. Jeff Erlich, "NDP Report Will Focus on Threats, Not Cuts," Defense News, 22-28 September 1997, p 3.
20. "NDP May Suggest Security Policy Shake-up Instead of Specific Force Cuts," Inside the Pentagon, 9 October 1997, p 8.
21. "NDP's Proposed 'Transformation Strategy' Could Cost $10 Billion," Inside the Pentagon, 16 October 1997, p 1.
22. "National Defense Panel Draws Sharp Criticism for Skirting Specifics," Inside the Pentagon, 23 October 1997, p. 1.
Citation:
"From the QDR to the NDP", Project on Defense Alternatives, Commonwealth Institute, Cambridge, MA USA, November
1997.
Internet: http://www.comw.org/qdr/qdr2ndp.html.