Comeback America Read online

  Terrorism in particular is a crucial area in which we need to change how we think about risk. The Pentagon must maximize value and manage risk in light of our current and expected resources. Note that I say we should manage risk, not minimize it. Why? Because in reforming government (as in many other endeavors), we can’t maximize value if we are concerned only with minimizing risk. Especially during a time of increasingly constrained resources, we have to determine an acceptable degree of risk and draw the line at spending excessively in a vain effort to eliminate risk altogether.

  A more fiscally prudent defense strategy will, in the end, involve carefully identifying the most dangerous threats that face us and allocating resources to meet those threats accordingly. So let’s rethink our defense strategy and handle the risks as need be. Our first principle may be that the era of massive military force is over. Our job in government today is to improve our economy and our administrative efficiency and effectiveness without compromising national security. This means maintaining an effective deterrent and the option of lethal force in a way that is both affordable and sustainable.

  Don’t get me wrong; I am not playing down the importance of military power or slighting the successes of our fighting forces in the Persian Gulf, Iraq, Afghanistan, or anywhere else. Nor am I suggesting that we hand off essential military work to civilians. Under the Pentagon’s “total force” concept, it has begun using more civilian contractors to supplement its military personnel. We all have read about the abuses by contractors working as security guards and interrogators in Iraq, and about the questionable contracts that were awarded without competitive bids. Congress needs to consider which jobs are “inherently governmental” and avoid using contractors to do work that should be done by the military or civil servants.

  America’s military training, technology, and logistics capabilities are second to none. But our success is often coupled with billions of dollars of waste—and our planning process emphasizes dividing up the pie of available resources rather than strategically assessing real threats and corresponding needs.

  COMBATING WASTE

  What do I mean by “waste”? It’s one of those slippery words I’ve been pointing out that doesn’t mean the same thing in Washington as it does in Webster’s dictionary. In Washington, “waste” too often means “programs other than mine.” After years on the front lines in Washington, I’ve also found that one person’s “waste” is another’s “investment.”

  We need a better definition—something that a professional accountant and auditor like me can consider objectively. Here’s the one I used when I oversaw the federal government’s budget: Waste is the failure to give taxpayers as a whole reasonable value for their money because of an inappropriate act or omission by a party with discretionary control over government assets or resources.

  Sorry, that’s a bit of a mouthful, but I chose all of these words carefully and for good reason. This definition covers everybody who can dip into the public coffers for personal, bureaucratic, or special interests rather than staying focused on our nation’s collective best interests. It covers the members of Congress who want to develop a weapons system to create jobs in their districts—not because we need the system. It covers the powerful contractor who lobbies Congress to adopt a technology that he has mastered—again, whether or not we actually need it. It covers military officers who want to buy their dreams with our money, elected officials who try to secure contributions and votes with our money, political appointees who push an ideological agenda with our money, and civil servants who negotiate bloated contracts with our money. It covers the government, which pays performance bonuses to contractors who are late and over budget and who fail to meet performance expectations. After all, it’s easy to spend someone else’s money. Washington does it all the time.

  The truth is that all too frequently what drives the Pentagon budget is not our security needs for the future but the wants of today. The word used in the Pentagon is “requirements.” I put that word in quotation marks because “requirements” is another of those words with a special Washington meaning. In the Pentagon, “requirements” might be no more than the wish lists produced by the various service branches. Creating the budget is largely a bottom-up process, in which the branches put together lists of hardware, personnel, bases, and other proposals that are all aggregated—often with only a modest review by the White House—and sent to Congress for action. And believe it or not, when determining what our requirements are, by law, the Pentagon is not supposed to consider how much they will cost. No wonder our military has a spending problem!

  Yes, of course planning is part of the process, but it’s not done in any properly designated and coordinated way. Like other bureaucracies, the Army, Navy, Air Force, and Marine Corps fight to hold their turf in the budget contest. And within their own establishments, there is huge pressure to preserve what they have—including expensive weapons systems that we might not need at all or excessive quantities of things we do need.

  On the other side of the coin, nobody in the civilian world who is prospering from the Pentagon’s generous spending wants to stop milking all those cash cows. Watch what happens when the Pentagon tries to cut a weapons program that benefits a powerful corporation—or when it proposes closing an outmoded military base that benefits the constituents of various congressmen and senators. Let’s call it like it is: Too many decisions in Washington are made based on local economic considerations rather than our national interest.

  When this planning process, politically tainted as it is, leads to the approval of a new weapons system—anything from a rifle to a jet engine to a supersonic fighter—the spending really starts in the production process, in the form of rising costs, broken deadlines, and changing specifications. We tried to keep track of these costs at the Government Accountability Office. One tool was the “high risk list” that we maintained to identify federal programs and functions that were subject to greater risk of fraud, waste, abuse, or mismanagement, or simply of failing to achieve their objectives. GAO’s 2009 High Risk Report contained thirty high risk items, of which fifteen related directly or indirectly to the Defense Department, and fourteen of the thirty required congressional action to effectively address. GAO supplemented this list with a periodic “quick look report” on major Pentagon weapons systems.

  A few eagle-eyes in Congress helped immeasurably. In the Senate, John McCain, a decorated Vietnam War veteran and former prisoner of war, generally led the charge against waste in the Defense Department. By his reckoning early in 2009, based on statistics from GAO’s audit and evaluation work, the cost of ninety-five major weapons systems had grown by 30 percent during development, rising to a total of about $1.3 trillion.

  The Pentagon, of course, has the main responsibility for managing and overseeing these projects. But no matter who is in charge, the system is so fundamentally flawed that billions of dollars in waste is virtually guaranteed every year. It’s pretty clear that the biggest area of Pentagon waste involves acquisitions and contracting. (In fact, that’s a major high-risk area throughout the government.) By the time I left the GAO, we had identified fifteen systemic problems with the Pentagon’s procurement systems, many of which were shared by other federal agencies. I call these the “fundamental fifteen.” Among other shortcomings, we highlighted bad planning, bloated contracts, congressional meddling, and the “plug and pray” approach to complex projects, in which the Pentagon divides the available funds for a program by the current cost per unit and prays that Congress will allocate additional funds to acquire more units. And procurement was only one problem. As of 2009, the Defense Department occupied nine of twenty-six high-risk areas on the GAO’s government-wide list. Many of these warnings had been on the list since its creation in 1992.

  There are lots of incentives to grab a piece of the budget bounty in the Pentagon, and very few to manage your share efficiently. I saw this myself during the approximately eight years I served as an ex officio
and nonvoting member of the Defense Business Board (DBB). The DBB, created during Secretary Donald Rumsfeld’s tenure, comprises top-level civilians and former senior flag officers (three-and four-star generals and admirals), and it made a number of solid recommendations designed to improve the Defense Department’s business practices. The DBB came up with ideas to improve military health care, mail delivery, and recruiting, among other things. But after a while, it became clear that many organizations and individuals within the Pentagon’s five walls had an effective pocket veto over any meaningful changes to the status quo.

  They got that power because in the Pentagon, any significant decision has to make its way through innumerable in-boxes. For example, when I participated in CAPSTONE, a training program for generals and admirals, I was told that more than twenty different units had to approve the activation of as few as twenty National Guard or Reserve members before the proposed deployment was sent to the secretary of defense, who had to give final approval. That kind of process is one factor behind my belief that if the Pentagon bureaucracy were 25 percent smaller, it might be 50 percent more effective.

  What’s really amazing is that nobody is in charge of shaping up the Pentagon’s business practices. The Defense Department does have a position for a deputy chief management officer, approved by law in 2007. But in Washington’s most rank-conscious bureaucracy, the new position ranks so low that it is unlikely to have any real effectiveness. As of this writing, the job is still open and has never been filled.

  What the Pentagon needs instead is a position equivalent in rank to the deputy secretary—level two in the hierarchy—with at least a five-year appointment to carry it beyond the term of any single administration. That would help attract a highly qualified professional with a proven record of transformational success. The new chief operating officer (COO) or chief management officer (CMO) would be in a position to transform the way the Pentagon does business. The COO or CMO should have a performance-based contract to help ensure that the new officer does just that. Don’t hold your breath waiting for the Defense Department to agree to that dose of responsibility. After all, everyone is for accountability until they are the ones being held accountable.

  COMING TO TERMS WITH THE MESS

  If and when such a new COO or CMO signs on, good luck to the person who gets the job; he or she will need it. The Pentagon’s business operations are a mess. This huge bureaucracy is the only major agency whose books are so jumbled that it cannot withstand a financial audit. While officials had planned to have their books in shape and audited by the time the Bush 43 administration came to office, the Defense Department is not expected to be able to go through such an audit for another ten years. Where do you start when the Pentagon has thousands of information systems that cannot even communicate with each other?

  After September 11, 2001, the Defense Department’s accounting books became more complicated, not less so. As I told you in an earlier chapter, that’s when the Bush administration started financing the so-called global war on terror with “supplemental” appropriations, a strategy that hid the cost of the war in the regular defense budget.

  The “emergency” and “supplemental” appropriations for Afghanistan and Iraq were not subject to the normal budget process and received even less scrutiny and accountability than the regular Pentagon budget. They were simply charged to our national credit card. Who knows exactly what we bought with those multiple billions? I don’t and the Pentagon doesn’t.

  President Obama, to his credit, proposed to include the costs of Afghanistan and Iraq in the regular Pentagon budget starting in fiscal 2010. He did this acknowledging the reality that some related costs would continue for a number of years. That’s a more honest approach, and it improves transparency. However, it also increases the federal government’s and the Pentagon’s baseline budget without any guarantee that we will be able to account for all the money. Remember President Reagan’s call to “trust but verify.”

  Since Obama’s truth-telling strategy makes the Pentagon’s budget base much larger, Congress and the administration will need to work hard to be sure that all nonrecurring costs attributable to Iraq, Afghanistan, and other military and support operations are eliminated when we draw down our forces. As is the case with almost any department or program in Washington, it’s easy to add numbers to a budget, but very difficult to subtract them.

  THE PSYCHOLOGY OF “WAR”

  Despite all its management problems, the Pentagon has huge and unparalleled influence on Capitol Hill. When a general or admiral in gleaming uniform, sitting ramrod straight, puts a list of “requirements” before a congressional committee, it’s very hard for members of Congress to say no. We are talking about national defense, after all. How do you turn down a warrior demanding, say, a new fighter or ship, when the lack of it could lead to American deaths? How do you turn down a request for more benefits to support our servicemen and-women whose job is to put their lives on the line for America?

  There is a psychological dimension in the give-and-take between Washington’s civilian and military leaders that is not often acknowledged. A lot of it has to do with the way our definition of “war” has changed over the years. In the dictionary, it’s defined as “open and armed conflict between nations.” This makes sense to me and is generally consistent with how our nation defined it for more than 150 years. That takes us to the last war we actually declared, World War II. We have been through a number of serious national conflicts since then—in Korea, Vietnam, the Persian Gulf, Afghanistan, and Iraq. But in none of those conflicts was the constitutional mandate fulfilled that war must be declared by Congress.

  I don’t know about you, but I am concerned that our nation has lost sight of what war is. “It is a good thing that war is so terrible,” General Robert E. Lee said, “or we would come to love it.” War is too terrible to take lightly. It demands of us a commitment of American lives and treasure for the benefit our country. For that reason, as I said in chapter 3 about principles, when we fight a war, Congress should declare it—not just pass resolutions of support. And all Americans should participate to support it in some meaningful way.

  That sense of shared national defense started to erode during the conflict in Korea, which we called a “police action” and failed to declare as a war. It eroded further in Vietnam, another undeclared war, where young men of means and education found ways to avoid the draft. After President Nixon ended the draft in 1973, we built a leaner, more professional military machine that essentially has stood apart from the larger American society ever since. Like a big corporation, the military recruits its young professionals by offering a good salary, generous benefits, and the promise of personal fulfillment (“Be All You Can Be;” “An Army of One”). The great majority of Americans support our people in uniform, but without that old sense of personal involvement. When it’s time to fight, we leave it to the one-half of one percent of us who are military professionals.

  The two wars we are fighting as I write this—one winding down in Iraq and one gearing up in Afghanistan—already have lasted longer than World War II and have cost billions of dollars and thousands of lives. If you want my opinion, I would say that invading Afghanistan after 9/11 was justified, since the Taliban government had provided safe harbor to al-Qaeda, but the invasion of Iraq was not. I make this statement despite the fact that our son Andy served as a Marine Corps officer and was in the first wave of the invasion to liberate Iraq in 2003. Andy and the hundreds of thousands of military personnel who were part of Operation Iraqi Freedom did their job well. Fortunately, Andy came home safe and sound, but thousands of other Americans and Iraqis died and tens of thousands have been maimed or otherwise affected for life.

  There was a time when soldiers and civilians were the same people fighting for the same cause. During World War II, virtually all Americans had a role in our nation’s war effort. America’s young people joined the ranks or were drafted. Their parents in many cases worked in the indus
tries that built a great military machine from scratch. If you were old enough to fight, you either fought or promoted the war effort in some other way, like working in a factory that supported the war, paying higher taxes, or buying war bonds.

  Today that is not true. War has become a presidential prerogative, endorsed by Congress, and sometimes after the fact. We citizens may or may not be asked to pay for it (as inconspicuously as possible), then we go about our lives essentially ignoring it. I’ll leave it to others to argue whether that’s a good way to run a democracy. But it sure is a terrible way to build transparency and accountability into our Defense Department.

  If anything, the divide between military service people, elected officials, and Main Street Americans is growing. Since the creation of the all-volunteer force, fewer and fewer elected officials have military experience. In addition, an ever-smaller percentage of the American population has direct military experience. Simply in terms of the balance of power, this growing gap puts elected officials at a disadvantage when questioning the military and results in a divide between those who serve our country and those who benefit from that service.

  Congress, of course, reflects the larger population: There’s a big disconnect between civilian and military. The numbers fluctuate, but in the 111th Congress, which convened in January 2009, only 121 of our 535 senators and representatives are military veterans, and according to many news sources, fewer than a dozen have had sons or daughters serving in Iraq, as our son Andy did, or in Afghanistan. In a situation like that, where most of the people who control the purse strings have no personal stake in our military, how do they determine how much is too much in the defense budget? How do they acknowledge bad planning, excess, and waste—and say no? It’s not easy.