Deputy Secretary Bill Lynn told the House Armed Services Committee (HASC) this week that DoD’s new budget plan “strikes the right balance for these difficult times.”  Testifying along with the Vice Chiefs of the Army, Navy and Air Force, and the Assistant Commandant of the Marine Corps, Lynn said the fiscal pressures facing the U.S. require DOD to “make the most out of every dollar entrusted to us.”   He was referring to the plan announced by Secretary Gates in early January to lower the FY2012-2016 budget plan by $78 billion (as part of the administration’s deficit reduction plan) and to achieve $100 billion in savings within the DoD budget. 

To achieve the budget reductions, Secretary Gates called for a civilian personnel freeze and a 10 percent annual cut in contractors who support government staff through 2013, reductions to general and flag officer and senior civilian positions, changes to organizational structures, and increases to some TRICARE enrollment fees and adjustments to pharmacy co-pays.  Lynn said the FY2012 base budget request (to be submitted to Congress in less than three weeks) will be $553 billion, an increase over the FY2011 budget request, but $13 billion lower than the amount projected for FY2012 in last year’s budget plan.  He also revealed that the FY2012 budget request for Overseas Contingency Operations would be $120 billion, compared to $160 billion in FY2011.

The $100 billion savings objective would be achieved, according to Lynn, from reorganizing, consolidating, or eliminating organizations, implementing better business practices (such as reducing the number of data centers and improving the acquisition process), and terminating programs such as the Marine Corps’ Expeditionary Fighting Vehicle (EFV) and the Army’s SLAMRAAM surface-to-air missile.  The plan allows the Military Departments to keep the savings and reallocate them to higher priorities.  Lynn said $28 billion of the savings would be used to pay for higher operating expenses, while the remainder (about$70 billion) would be used to fund high priority military capabilities.”  Lynn said the efficiency savings would allow the Navy to buy more ships and develop a new generation of electronic jammers.  Gen. Chiarelli, Army Vice Chief of Staff, told the Committee that the Army had determined through a review of air and missile programs that $1 billion saved from terminating the SLAMRAAM missile could be used to upgrade the PATRIOT missile and counter rocket and counter mortar programs, among others.  Gen. Breedlove, Air Force Vice Chief of Staff, said that efficiency savings would enable the Air Force to develop a new long-range penetrating bomber. 

Lynn also expressed concern over the continuing delay in final congressional action on the FY2011 DoD appropriations bill.  Lynn warned that the department’s effectiveness and efficiency would decline if FY2011 funding was continued at the FY2010 level. 

HASC committee members questioned the witnesses closely on a number of issues, especially the proposed termination of the EFV, planned reductions to Army and Marine Corps troop strength levels in 2015 and 2016, and increases to TRICARE fees and co-pays. HASC Chairman McKeon (R-CA) told Lynn that he agreed that DoD programs should be reviewed closely to make sure that limited resources were spent on the highest priorities.  But, he would not support proposals that would put added stress of servicemembers and their families or jeopardized national security.