Experts Predict $20 Billion in Additional Cuts as DoD Costs Rise

Michael Bayer, DBB; Photo:,,

Even though Defense Secretary Robert M. Gates has proposed a sweeping round of efficiency initiatives, the Defense Department will likely need to lop an additional $20 billion off the budget, because of rising costs, according to the chair of a federal advisory committee.

According to Defense News, Chairman of the Defense Business Board Michael Bayer said this means DoD will need to shift about $123 billion, rather than the original $103 billion to weapons programs, as Gates has prescribed to realize at least 1 percent growth in the defense budget over the next few years.

But another Pentagon adviser, Andrew Krepinevich, president of the Center for Strategic and Budgetary Assessments, was skeptical of even those gains.

“Gates may be able to hold on for a while,” he said, but predicted that “once the long knives come out,” DoD will have to reduce its budget “to address the nation’s fiscal situation.”

The culprits for the rising DoD costs, Bayer said, are increasing personnel costs, federal debt levels and stabilizing interest rates.

As for fixes, Bayer said nearly all the solutions come down to reducing personnel, including military staffs and civilian contractors.

“No one in the department really knows how many contractors are in DoD,” he said.

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