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Cutting Fat, Adding Muscle: The Pentagon’s Budget Strategy

The U.S. Defense Wide Review is an attempt to free up time, money, and manpower to reinvest into its top priorities: lethality and readiness. Since the review began in August 2019, The Pentagon has identified approximately $5.7 billion in savings.

Since the 2021 budget request is, essentially, the same as last year except for inflation, the goal of the review is to cut parts of the Defense Department that are not part of the front-line military services, otherwise known as the bureaucracy.

According to DoD officials, “This is even more critical in fiscal year 2021, as the defense budget will remain flat, which means that after accounting for inflation, the DOD budget will buy less.”

The money saved will flow to National Defense Strategy priorities — including research into hypersonic weapons, artificial intelligence and big data, fifth-generation communications technologies, nuclear enterprise modernization, space, missile defense and response force readiness.

The review began soon after Esper took office and built on a similar process he put in place as Army secretary. The process involved personnel from the Office of the Secretary of Defense and the services. It was a line-by-line examination of the budgets of defense agencies and activities.

“We ended up with 21 sessions over the course of about 16-ish weeks,” a senior defense official said. The directors of the defense agencies and activities participated.

Esper looked at each organization and each budget item and asked basic questions: Why is DOD doing this? What is the requirement? Should this be done by this agency or one of the services?

The secretary has his own key phrases that boil down to freeing up time, money and manpower for redirecting to NDS priorities, the official said. “It’s a long, tough process, but it realized $5.7 billion in 2021 savings that re-prioritize to NDS priorities, and another $2.1 billion that will transfer from defense agencies and activities to the services,” the official said.

In some cases, the review called for increases in capabilities. In other cases, it called for cuts. Some legacy systems and equipment that were resident in the Fourth Estate are being cut. Some missions, overcome by events, are being ended. All this money will flow to higher priorities.

Officials said employees should not be affected by the changes. Any changes in personnel can be handled under normal retirements and attrition.

Most of the money can just be transferred. Some will require congressional action. Officials stressed these actions do not involve the combatant commands.

Secretary Esper has demanded that the various non-combat agencies place their fiscal requests “into one pot,” so the chief management officer would examine the budgets as a whole, shifting funds where they are needed and eliminating duplicative or overtaken capabilities. Essentially, this means “creating that same management incentive on them as on the front line services.  The goal is that if more funds are requested, an offset elsewhere should be found.

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The priorities outlined in the 2021 budget include:


NUCLEAR MODERNIZATION: Maintaining a strong nuclear deterrent is the highest modernization priority in the NDS. All three legs of the nuclear triad (land, air, and sea) are being modernized simultaneously and DWR savings enabled increased investment in this modernization effort.

• SPACE: The FY 2020 NDAA created the sixth Armed Service, the U.S. Space Force (USSF), to transform our ability to fight and win future conflicts. The DWR enabled DoD to fund the establishment of the USSF from within available resources. In addition, the DWR enabled substantial new investments in space capabilities, including resilience of the use of space and enhancements in our ability to control space.

 • MISSILE DEFENSE: The 2019 Missile Defense Review reiterated U.S. commitment to robust defenses against rogue regime missile threats. DWR savings enable increased missile defense capacity and capability, and allows MDA to pursue a multi-layered approach to homeland missile defense. This approach includes development and deployment of a Next Generation Interceptor (NGI) for Ground-Based Interceptors (GBI) and development and demonstration of lower altitude interceptors that can provide additional defense against threat missiles.

• HYPERSONIC WEAPONS: The FY 2020 budget established a significant program of investment in hypersonic weapons. The DWR enabled a major increase in this investment to accelerate development and fielding of hypersonic weapons over the Future Years Defense Program (FYDP).

• ARTIFICIAL INTELLIGENCE (AI): AI is a key technology for the future and the United States has been trailing our adversaries in investment. The DWR significantly accelerated investment in AI to increase the scope and capability of AI applications fielded across the full range of DoD missions. This investment will support and speed development of applications for maneuver, intelligent business automation and logistics, warfighter health analysis, and intelligence data processing.

• 5TH GENERATION (5G) COMMUNICATIONS TECHNOLOGIES: The DWR enabled DoD to resource key investments in secure and resilient 5G technologies and networks and speed their adoption by providing at-scale test facilities for rapid and extensive experimentation and application prototyping. These investments will allow our forces to leverage the dynamic spectrum without impediment across the battlefield as well as establish the foundation for Next Generation technologies through collaboration with industry, academia, and international spectrum access and communications standards organizations.

• RESPONSE FORCE READINESS: The new Immediate Response Force (IRF) and Contingency Response Force (CRF) enable the U.S. to rapidly confront incidents and threats to its interests across the globe with mission-ready units from all of the services. DWR savings resource substantial investments to IRF and CRF readiness allowing DoD to fully exercise these capabilities and further advance Dynamic Force Employment. Further details on these investments and related items will be provided in the FY 2021 President’s Budget.

Illustration: An unarmed Minuteman III intercontinental ballistic missile launches during a developmental test at Vandenberg Air Force Base, Calif., Feb. 5, 2020.