Can Hagel Whip the Pentagon Into Fiscal Shape?
Business + Economy

Can Hagel Whip the Pentagon Into Fiscal Shape?

REUTERS/Kevin Lamarque

Chuck Hagel spoke to Defense Department workers this morning for the first time as Defense Secretary, telling them that America was still a force for good, and that the Pentagon must adjust strategies for dealing with evolving threats.

He also acknowledged the elephant in the room: in two days, $42 billion will begin to disappear from the Pentagon’s $800 billion budget. 

“Budget, sequestration, I don’t need to dwell on all the good news there,” he said, tongue in cheek. “That’s a reality… We’ve got ahead of us a lot of challenges. They are going to define much of who we are.”

Sequestration is just one of the challenges Hagel will face. The biggest is slashing the Pentagon’s budget by nearly $600 billion over the next decade while changing a military and contractor culture that isn’t accustomed to budget restraint.

Another hurdle: DOD can’t account for its spending and has never passed an audit. Weapons program costs are out of control and long-term spending commitments make it difficult to save money.

Proof of the enormity of this challenge took place a few hours before his confirmation vote Tuesday. The heads of each branch of the military complained to a House subcommittee that the sequester cuts Hagel will implement would put soldiers in harms way and make the country less safe.

"If we do not have the resources to train and equip the force, our young men and women will pay the price, potentially with their lives," said Gen. Ray Odierno, Army chief of staff, told the committee.


Meanwhile, Marine Corp chief Gen. James Amos told the defense subcommittee said the upcoming sequester would have a "devastating impact" on the military and create “unacceptable levels of risk" to U.S. interests.

Few outside of the military believe that this is the case. But a Pentagon hierarchy that is convinced the drawdown makes American vulnerable will resist any changes Hagel proposes. And DOD bureaucracy can make even the smallest change extremely difficult.

It remains to be seen whether Hagel is up to the task. While he has military experience, he was not successful in his first government post. As the administrator of the Veterans Administration in 1982, Hagel resigned over a lack of resources.

He then went into the private sector until 1996 when he became a Republican Senator from Nebraska. As a lawmaker he never toed the party line, and as his confirmation hearing illustrated, he angered Republicans along the way.

The nature of the task Hagel is charged with will anger a lot more people: he’s messing with the livelihoods of politically powerful people used to an endless supply of cash. Whether he has the political skills and the wherewithal to control the DOD’s budget without jeopardizing national security will define his legacy.