President Barack Obama delivers his State of the Union on Wednesday. (White House Photo)

Steve Kosiak has spent much of his career as a defense analyst frustrated by military bloat. In early 2003, he found it was “impossible to say precisely” how much of the Bush administration’s military buildup was actually attributable to the post-9/11 emergency and how much was pre-existing defense pork. A 2005 paper he authored for the Center for Strategic and Budgetary Assessments, a leading Washington defense think tank, warned that rising defense costs could add “some $900 billion to projected deficits.” And in December 2008, he devoted almost 100 pages to carefully itemizing the costs of the Iraq and Afghanistan wars — $970 billion as of then, he found — and placing them in a broader social, economic and budgetary context.

The Obama administration is deeply familiar with Kosiak’s work. A year ago, the White House tapped him to oversee defense spending for the Office of Management and Budget. And that makes President Obama’s decision to exempt the hundreds of billions spent annually on defense and homeland security from a proposed overall freeze in discretionary spending — a policy he formally unveiled in his State of the Union address Wednesday night — particularly difficult for defense analysts to understand.

[Security1]Leading defense wonks, particularly those on the left, have harsh words for the exemption. “Ridiculous,” said Laicie Olson of the Center for Arms Control and Non-Proliferation. “Completely inappropriate,” said Lawrence Korb of the Center for American Progress. “A political decision,” said Charles Knight of the Project on Defense Alternatives.

Obama’s first defense budget, submitted last spring, topped out at $663 billion when including the costs of the wars in Iraq and Afghanistan — an overall increase from the final Bush administration Pentagon budget — but also terminated major defense programs hated by reformers, including the Air Force’s F-22 fighter jet, the Army’s Future Combat System vehicle and ground-based missile defense. But despite the real-dollar increase, conservatives criticized Obama’s budget when they saw that those program cancellations would bring down future defense spending. Similarly, Obama raised the Department of Homeland Security’s budget to $43 billion from $40 billion.

Reformers had looked to the release of the master Pentagon planning document known as the Quadrennial Defense Review, currently scheduled for a rollout next week, to guide future reductions in defense programs of questionable value, plagued by cost overruns or beset with design flaws, like the Marine Corps’ Expeditionary Fighting Vehicle. When announcing his cuts last year, Defense Secretary Robert Gates hinted that the so-called QDR would shape future decisions on cuts or program restructuring.

Several defense analysts said they have received indications the Expeditionary Fighting Vehicle will survive the QDR relatively unscathed, however. It is unclear if the QDR will indicate any additional program cuts are forthcoming, but the document will be released alongside the administration’s proposed fiscal 2011 defense budget, which is expected to total $740 billion when roughly $33 billion for funding Obama’s Afghanistan “extended troop surge” is factored in. Reports indicate that Obama will seek to fund that through a supplemental budget request rather than one big budget document for all defense requirements — something candidate Obama pledged not to do.

But while Obama did not rule out future defense cuts in the speech, many of these defense wonks could not understand why an effort at deficit reduction would explicitly exclude defense spending. “Defense spending is over half our discretionary spending,” Olson said. “It would be crazy not to include it. It begs the question whether this is a real effort.” Shortly before the speech, Rep. Nancy Pelosi (D-Calif.), the speaker of the House, told reporters that any spending freeze ought to include defense spending.

The freeze will also exclude spending on entitlement programs like Medicare, Medicaid and Social Security. As a result, administration officials anticipate the spending freeze will save $250 billion over 10 years — a little more than a third of last year’s defense budget alone.

Korb, the senior defense analyst at the White House-connected Center for American Progress and a former Reagan Pentagon official, said the decision only made sense in terms of politics. “It’s another indication that Democrats are afraid of being seen as quote-unquote soft on defense,” Korb said, noting that no defense reformer was proposing cuts to any programs used for the wars in Iraq or Afghanistan.

Still, Todd Harrison, an defense-budget analyst at the Center for Strategic and Budgetary Assessments, said he believed the combination of massive defense budgets, massive federal deficits and a weak economy would inevitably compel Congress and the president to cut defense. “It’s likely in the future that everything will come under pressure, defense included,” Harrison said. But he conceded that a variable in that calculation is “political will” for such cuts — which is not in evidence in either the White House or, especially, the Congress, which loves to send defense money back home to individual states and districts.

While that political will may not exist in Washington, there is reason to believe it exists outside of the city. According to a Pew poll from December, defense spending ranked among the most popular sectors of the federal budget to cut. Eighteen percent of respondents identified “military defense” as a target for desired budget reductions, compared to six percent for education and 15 percent for unemployment assistance.

“Its absolutely ridiculous to think that we’re going to cut things like education and spend money on nuclear weapons and programs that don’t work, are faulty, have been faulty for years and continue to waste money,” Olson said.

[W]hat goes unanswered is who is going to carry out the President’s orders. What is not included in the President’s plan is how he plans on dealing with the crisis in the government contracting workforce. Take the Pentagon for example. Over the past several years “acquisition workforce has dwindled by 25 percent, while the contracting workload has increased by a factor of seven.” The Defense Contract Management Agency alone has lost more than half its workforce and according to a Pentagon estimate “in 1997 one auditor was responsible for $642 million in private contracts; today one auditor is responsible for $2 billion in private contracts.”

This problem is only going to get worse as more than half of all contract auditors are expected to retire within the next 10 years. What is needed are not only more contract management officials, but the Pentagon also needs to make this career path an attractive one for career officers so that they are persuaded to stay with it.

A good point. It’s worth remembering that the Obama memo lays out the parameters for a review process, not its conclusion. The Levin-McCain legislation that Obama backed on Wednesday would creates a new acquisitions czar, the director of independent cost assessment, and a fair reading of the memo suggests that it would view acquisitions officials as the sort of “inherently governmental” functionaries worth keeping. So Cohen might be a bit premature.

Furthermore, the key figures to watch on the review are Peter Orszag, Rob Nabors and Steve Kosiak at the Office of Management and Budget; Scott Gration at NASA; and Bob Gates at the Pentagon. Kosiak, Gates and Gration, at least, understand the role for qualified and independent acquisition officials at the Defense Department. (Gration is a recently-retired Air Force general.) Speaking about Kosiak, longtime defense-reform gadfly Winslow Wheeler told me, “I know him, I like him, he’s a smart guy, and he’s well informed. It’s gonna be a real test for him [to see] whether he can translate his academic talents into bureaucratic talents to fight the bureaucracy on this and make new regulations that really mean something.” All of this remains to be seen, but Cohen might have put his finger on a target that the review is likely to acquire anyway.

As a former CIA officer turned well-respected assistant secretary of defense for (deep breath) special operations, low-intensity conflict and interdependent capabilities, Vickers is, on the face of things, an unusual choice for such a job. But the guy is also a bona fide budgeting expert, from back when he was at Andy Krepinevich’s think tank, the Center for Strategic and Budgetary Assessments. (I thought I was all slick with the news of Vickers’ inclusion in this budgetary “small group,” but it turns out that InsideDefense had this already.)

I have a request out to talk to Vickers, but this is a reasonably good sign that Gates intends to make good on his recent calls to rebalance the way the Pentagon budget and acquisitions process buys a lot of stuff that isn’t relevant to the two wars the United States is currently fighting. Vickers has a long history of discussing imbalances in Pentagon budgetary priorities and how irregular warfare often gets the shaft. Indeed, a presentation he gave to a House panel in November 2005 argued that “the current defense portfolio is out of balance” and specifically criticized the Pentagon for having “excess capacity for traditional challenges — and not enough for irregular warfare (i.e., [the war on terror]), disruptive threats (i.e., China), and countering WMD.” (He did, however, urge greater purchases of the F-22 fighter jet in addition to greater surveillance capabilities, so it’s not as if he’s a zealot.)

Andy Krepinevich, Vickers’ old boss, said not to read too much into Vickers’ writings for the think tank, since he hadn’t been there in two years and “so much has changed — Iraq has simmered down, Afghanistan has bubbled up.” Still, it’s hard to see how the Pentagon’s budgetary priorities have privileged irregular warfare since Vickers left CSBA and entered the Defense Department.

One interesting footnote: one of Vickers’ old CSBA colleagues is Steve Kosiak — they’ve even collaborated on some reports over the years — and now Kosiak is head of defense programs for that very same Office of Management and Budget, so that might help explain Vickers’ inclusion in the process. “The two of them got along well,” said Krepinevich. “That relationship will come in handy.”