We've talked about it here, and we talked to our buddy Phil about it on Midrats - and Phil hits on it again.
Just when you thought it was safe to take a knee and run out the clock on 2011 in the hopes that the new year would be better — it ain’t.We've been talking about it for years - any economic historian could tell you it was coming - and we haven't even hit the Terrible 20s yet.
Sandra Erwin of National Defense magazine penned a deeply pessimistic look ahead Wednesday that concluded the Pentagon’s 2012 could make 2011 look like a box social by comparison. The Building will continue to cover its eyes and plug its ears about the truth of the big crunch; the services’ food fights will only intensify; strategy types’ lazy groupthink will persist; and cost and schedule problems are only going to worsen on the big programs.
The problem is deep, ugly, and institutional. It will only change with the right leadership; first in suits - then in uniform. There are people who can do what needs to be done - but they don't have the top cover bureaucratically and politically to do it.
You'll know change when you see it - when leaders who have clearer and more active priorities than the socio-political fads of Diversity and green energy come to the front.
Sandra sees it along with another Midrats alumni, Daniel Gouré.
The Pentagon Will Continue to Live in Denial About the Approaching Fiscal Train WreckPart of the problem is that we don't study our own history; recent or far. Combine that with a culture that does not reward aggressive debate - and you drift until you run aground.
Yes, a budget train wreck is a shopworn cliché inside the Beltway. It dates back to 1995, when the Center for Strategic and International Studies published, “Averting the Defense Train Wreck in the New Millennium.” One of the authors, industry analyst Daniel Gouré, admits that the Pentagon has so far avoided fiscal disaster. The post 9/11 spending surge prevented the Defense Department from fixing its weapons cost-growth problem and only exacerbated an imbalance between tooth and tail. But with the nation in dire financial straits and its leaders incapable of addressing the debt crisis, “We know the train wreck is inevitable,” says Gouré. “We choose not to think about it because it’s not here right now.”
The trends that the CSIS report brought to light in 1995 have not changed, he says. “Nobody wants to address cost growth in major systems.” At the time, the message was that the Defense Department needed to make strategic choices of whether to modernize its aging equipment or reduce its work force. The same dilemma exists, and it’s only been made worse by the huge increases in the cost of military personnel.
Regardless of the election outcome, Gouré predicts, whoever takes over has to come to grips with the reality that the current defense apparatus is unaffordable.
New Buzzwords Will Masquerade Old Thinking
Pentagon strategists and think tanks have a history of becoming infatuated with “concepts,” which also can be described as the Pentagon’s worldview captured in three-letter acronyms. The decade of the 1990s was all about NCW (network centric warfare) which morphed into RMA (revolution in military affairs). Then came EBO (effects-based operations), coupled with CBR (capabilities based requirements) or TBR (threat based requirements).
Changes in buzzwords didn’t really bring about innovative thinking, however, says Frank Hoffman, military analyst at the National Defense University. “We suffer from strategic amnesia,” he says, “and continue to repeat [mistakes of] the past.”
There are signs of the problem at the core of our military structures all over the place if you want to see them. They are I&W of a deep fault a the core of the system. That is where the pathetic comes in.
DFAS is unable to reconcile the cash activity recorded in the Navy’s general ledger accounting systems to that recorded in DCAS. DFAS officials stated they acquired the Business Activity Monitoring (BAM) tool to perform this reconciliation; however, after 4 years of effort and $29 million, the BAM tool does not yet provide the information needed to identify and resolve the underlying causes of differences between DCAS and Navy general ledger systems. As of April 2011, there were more than $22 billion unmatched disbursements and collections affecting more than 10,000 lines of accounting. DOD IG officials stated they were performing substantive testing to confirm the balance of the Marine Corps FBWT as part of their audit of the Marine Corps’s Fiscal Year 2011 Statement of Budgetary Resources. This testing did not include internal control and did not provide assurance on the effectiveness of the Marine Corps’ FBWT reconciliation process. Navy, Marine Corps, and DFAS-CL officials agreed existing FBWT policies and procedures are inadequate. DFAS-CL and Navy officials stated the base realignment and closure changes 2006–2008 resulted in loss of experienced DFAS-CL personnel and that remaining staff have not received needed training. The Navy is developing a plan of action and milestones (POAM) to address weaknesses in audit readiness.Excuses. Acceptance of a systemic incompetence that if practiced in the civilian sector would land people in jail.
Defense Secretary Leon Panetta said in October that the Pentagon is preparing to be audit-ready by 2014. The Senate passed an amendment in the defense authorization bill from Sen. Kelly Ayotte (R-N.H.) that would have required the 2014 Pentagon audit, but the amendment was stripped out of the final legislation.