Defense Contractors Angered by Gates Budget Strategy

April 03, 2009 | Last updated: July 31, 2020

Defense Sec. Robert Gates (WDCpix) and F-22 Raptors ( Defense Sec. Robert Gates (WDCpix) and F-22 Raptors (Air Force photo)

On Monday, an Iraq veteran named John Guardiano took to the right-leaning op-ed page of The Washington Examiner, a free daily paper in the district, to inveigh against the “Secret Defense Budget Tribunals” of Pentagon chief Bob Gates. Guardiano, troubled by the unusual steps taken by Gates to hold the details of his fiscal-2010 budget close to the vest, compared Gates’ efforts to the ill-fated efforts of then-first lady Hillary Rodham Clinton to construct a universal health-care regime in secret that ended in 1994. Needless to say, he disapproved. “Democracy can be messy and untidy, noisy and boisterous,” he wrote, “it can disrupt the work of the ruling class, who think they know better than we the people.” After all, Guardiano reminded, “America is not the Soviet Union or China.”

Guardiano’s bio for the paper quickly noted that his views “do not necessarily reflect the views of the U.S. military or his employer, a defense contractor.” The paper didn’t see fit to name the contractor.

Illustration by: Matt Mahurin Illustration by: Matt Mahurin

Still, Guardiano’s op-ed was indicative of two facts that remain salient as Gates is expected to deliver the substance of his long-awaited Pentagon budget to the White House next week. First, defense contractors and their Capitol Hill allies are alarmed at how Gates has shut them out of the the decision-making process about the Pentagon budget as he has publicly warned, in vague terms, about making “hard choices” that will place defense systems and weapons programs beloved by the armed services and their contractors on the chopping block. And second, Gates has adopted a strategy for his budget that presumes that most of the defense industry is an obstacle at best and an adversary at worst.

“Leaks are used by people opposed to the changes being considered,” said one Pentagon official supportive of Gates’ effort. “It’s about opposition [to the budget] mobilizing on outside and stopping that, from certain members of Congress, the [armed services] committees, the news media, what have you.”

Gates has taken extraordinary steps to keep the details of the fiscal 2010 budget to himself. First, he announced that he would withhold the substance of the budget from the Obama administration’s overall budget, delivered in February, and just divulge the overall spending request of $534 billion. ($663.7 billion when counting the costs of the Iraq and Afghanistan wars for the year, which will be funded through a supplemental budget request later this year.) Then he announced that he would empanel a review to determine what defense systems needed to be scaled back in funding or were no longer relevant for national security. He went so far as to insist that defense officials and military officers consulted by the review sign non-disclosure agreements to prevent them from leaking. “In principle, you’re not supposed to talk about this thing outside of the building, or share it within,” said an official who requested anonymity and who was one of several dozen officials asked to sign the non-disclosure agreement.

The agreement, first disclosed by DefenseNews in February, requires signatories to affirm “I recognize that a significant factor in the successful and proper presentation and completion of the President’s budget is the strict confidentiality that must be observed by all government participants.” That includes all discussions about “planning, programming and budget system documents and databases, and any other information … concerning the Administration’s deliberation of the nature and amounts of the President’s budget for Fiscal Year 2010.” The agreement placed into conflict two values that the Obama administration espoused during last year’s campaign: openness and reform.

The budget effort, according to insiders, had two main phases: first, solicitation of perspectives and advice from a variety of officials and servicemembers; and second, final decision-making by a comparative few officials. While Assistant Secretary of Defense Michael Vickers was part of a “small group” of Pentagon officials leading the review, officials influential during the final phase were Gates; Adm. Mike Mullen, chairman of the Joint Chiefs of Staff; Gen. James Cartwright, the vice chairman; and Brad Berkson, director of program analysis and evaluation.

Gates’ allies say that keeping the decision-making process open would have empowered defense contractors to lobby Congress to protect beloved — and expensive — defense programs at a time when the economy is forcing the closure of what Gates has called the “spigot” of defense cash opened by the 9/11 attacks. While the budget still represents an increase over last year’s defense spending, Gates testified to Congress in January about restricting Cold War-era systems or those of uncertain value to irregular conflicts like the Iraq and Afghanistan wars. “This budget going to involve very significant shifts and changes from what was done in past,” the Pentagon official said, but declined to characterize how the budget would change.

Defense reformers look at such claims with skepticism. Winslow Wheeler, a three-decade veteran of defense budget fights as a Capitol Hill staffer who now works for the Center for Defense Information, expected the budget to cut “low-hanging fruit” and leave many sacred-cow programs intact. But he said that the secrecy-centric approach to the budget would only delay the inevitable fight when it gets delivered to Congress. “They’re delaying the services running around behind their backs and [asking] Congress to please rescue” favored defense programs. “But it’s not question of if, it’s a question of when that happens. The service representatives — colonels, whomever — will come over to Congress to complain about the decisions — if Gates make some good ones.”

Even in the absence of specific information about the budget, defense lobbyists have wasted little time mobilizing to guard against cuts. In January, Lockheed Martin unveiled a Website called Preserve Raptor Jobs, arguing that the F-22 fighter jet it produces for the Air Force was a jobs engine during trying economic times. A spokesman for Lockheed told TWI last month that the site was merely intended to “provide information” primarily to the jet’s “supplier base,” but lawmakers from F-22-producing states warned Gates against cutting funding for the jet — which costs approximately $143 million per plane, of which there are currently 183 — using talking points that sounded much like text on the site. Similarly, defenders of the Army’s Future Combat Systems program for tech-enabled land warfare — the target of a Government Accountability Office report this week that criticized its “staggering” cost-overruns of $300 million — have argued in recent days that the program is crucial to soldier safety against insurgent attacks, even though it has yet to be deployed in full. The Politico reported this week that Boeing has deployed 100 lobbyists to Washington to push back against potential cuts.

The Pentagon official acknowledged that secrecy over the budget could hardly last forever. Lobbyists “have a sense of where the trajectory is going” in terms of prospective budget cuts,” the official said. “What usually happens is happening. But at least [the secrecy] is something that mitigates it somewhat.”

Wheeler said the ultimate decision when the budget is fully unveiled will be Obama’s. “The president will have to decide if he’s going to fight for his own budget and the decisions that Gates makes, assuming Gates makes good ones,” he said, “or whether to engage in the slippery-slope compromises with Congress. And the everyone-gets-happy route just makes everything worse in terms of an aging, shrinking and less ready to fight” military.