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Secretary Gates Sounds Alarm on Defense Budget Issues

Defense Secretary Robert Gates sounded his loudest alarm yet on military spending, calling for an across-the-board review of all Pentagon spending and operations.

In a Saturday speech at the Eisenhower Presidential Library in Abilene, Kan., Gates put the defense establishment and Congress on notice that the military must cut overhead, find a way to rein in explosive growth in medical spending and other personnel costs, and curb the exponentially rising costs of modern weapons systems.

Gates said that given current tough economic conditions, and given the typical annual spending increase of 2 percent to 3 percent above inflation needed to sustain readiness, "it is highly unlikely that we will achieve the real growth rates necessary to sustain the current force structure."

Gates said he has directed every military service, command and staff and Pentagon department to take "a hard, unsparing look at how they operate - in substance and style alike" in preparing for the 2012 budget submission to Congress.

"The goal is to cut our overhead costs and transfer those savings to force structure and modernization," he said.

"Simply taking a few percent off the top of everything on a one-time basis will not do," Gates said. "These savings must stem from root-and-branch changes that can be sustained and added to over time."

Based on the 2011 request of $550 billion for spending not directly related to the wars in Iraq and Afghanistan, Gates' call for spending cuts would have the services collectively take about $11 billion to $16.5 billion out of the 2012 budget.

Gates said such overhead savings might be realized through:

- Reducing redundant "headquarters and secretariats" that do not directly support "real-world needs and missions."

- Converting executive or flag-officer billets to lower grades to "create a flatter, more effective, and less costly organization."

- Combining or eliminating commands or organizations that "conduct repetitive or overlapping functions, whether in logistics, intelligence, policy, or anything else."

The speech ended a week in which Gates fired a shot across the Navy's bow over its spending habits. During a trade show speech in Washington, D.C., he said the Navy can't afford to keep buying hugely expensive ships at the expense of what he views as more efficient unmanned weapons systems.

At that same trade show, Chief of Naval Operations Adm. Gary Roughead warned that the Navy and Marines are being "challenged" by rising personnel costs.

Marine Corps Commandant Gen. James Conway noted that while spending on care for wounded sailors and Marines is critical, there's been no adjustment in health care costs for two decades.

"Unless it's addressed, it'll just eat our lunch," Conway said.

Army Chief of Staff Gen. George Casey expressed similar concerns about rising personnel costs while speaking with reporters May 6.

"That's my challenge," Casey said, "finding the right balance between an Army that's large enough to meet the demand and where the personnel costs meet the needs of the soldiers, civilians and families and at the same time don't divert so much away from our ability to train, equip and support. And I don't have an answer on that yet."

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