Flat defense budget, cost-savings push seems likely for 2022

Sen. Reed with senior leadership from Army Futures Command at the Army Applications Laboratory in 2019. (U.S. Army photo by Patrick Enright)

The Defense Department will likely have to look even deeper for cost-savings as flat budget looms for 2022 and beyond.

Sen. Jack Reed (D-R.I.), the chairman for the Senate Armed Services Committee, said that while topline budget numbers don't adequately reflect value, the Pentagon and military services should look for cost-savings and where reinvestments can be made.

"One of the ironies of the Budget Control Act was that it was designed to reduce the deficit but after a while it actually became a force to, I think, increase spending because Republicans want strong defense spending. We're 50-50 split and we would get strong domestic spending and ironically it led to the budget you've seen the last few years. That's now gone," Reed told reporters Feb. 24 during a Defense Writers Group virtual event.

"The topline number may not be the best guide of are we getting value for the money, and that's what we're going to try and look for. What are the systems that provide real advantages going forward, what programs and policies make us stronger as a nation."

Reed wouldn't divulge a rough topline number for the upcoming 2022 budget, but said budget pressure will likely squeeze all areas of government spending beyond DOD, especially as COVID-19 related spending increases with the Biden administration's upcoming nearly $2 trillion economic relief package.

Reed surmised that "tighter" future budgets mean making judicious calls despite bidirectional tugs from Republicans who support increased defense spending and some left-leaning Democrats calling for dramatic cuts.

"We're going to look at and have to justify whatever we put in the budget," Reed said, adding that he was confident that bipartisanship support would prevail. "We have to be able to show what we're asking for makes sense."

But things could get complicated as military services are asked to look for cost-savings as some members of Congress hesitate to eliminate legacy programs.

"There are legacy systems which all of the services have asked us to eliminate and there's certain reluctance because they are stationed in our home states or they have impact," Reed said.

"There are steps that every service can take to save resources and reinvest those resources...that's the first step, what can we generate internally."

Part of the quest for cost-savings for legislators, which comes as DOD re-delegates duties of the now defunct chief management office that was charged with the matter, will come from acquisition reforms, including sustainment costs and the procurement process, Reed noted.

"We have to change the way we do business, we have to be able to connect with small companies," the senator said, "we have to cut down on the long, long [procurement] process, we have to look at the issues of how do we effectively protest contracts, for example."