The new effort to adjust Pentagon spending is not a cut, but a reallocation to find $50 billion for the Department of Defense’s priorities under the new Trump administration, the nominee for the department’s second-highest job told a Senate panel.
Testifying before the Senate Armed Services Committee, Stephen Feinberg said the targets could include “legacy systems that are not essential to the mission.”
Feinberg, a co-founder of the private equity firm Cerberus Capital Management, added that in the $850 billion Pentagon budget there is “so much there that we can get at without getting to bone.”
USNI News reported last week that submarines, “executable” surface ships and nuclear modernization are among the 17 areas off-limits to the shifts that would amount to about 8 percent of the total budget.
The services’ recommended offsets were due on Monday to Defense Secretary Pete Hegseth and the White House Office of Management and Budget.
The cutting of 5,400 probationary employees in the DoD civilian workforce and a hiring freeze announced last week “will be part of the initial effort,” a Pentagon news release said.
“We anticipate reducing the Department’s civilian workforce by 5-8% to produce efficiencies and refocus the Department on the President’s priorities and restoring readiness in the force,” the news release continued.
The personnel cuts could affect 75,000 DoD civilians.
“I believe these [personnel] cuts are always hard,” Feinberg said. He expects that some of the cuts would come from “people who want to retire, people who would like [to] resign early.”
Committee Democrats sharply questioned Feinberg over the Pentagon’s personnel cuts and his firm’s experience in turning around companies it bought and later sold.
“You will lose the expertise of these [workers] or replace them with contractors and military personnel,” said SASC ranking member Sen. Jack Reed (D-R.I.).
“In these kinds of reorganizations, there’s always turnover,” Feinberg said. In another exchange, he told lawmakers: “I don’t have the details” where these cuts in personnel and programs will occur. “I do trust the secretary’s judgment.”
He added: “I spent a career in restructuring” and that personnel cuts “can be done fairly.”
As the person who would run the day-to-day Pentagon operations, Feinberg said in his opening statement that our biggest threat is China, which has “a great economy and great military.”
He cited shipbuilding and counter-space capabilities as weaknesses and challenges facing the Pentagon.
“Not meaning to be too negative, but we really need to plug these shortages, focus on our own protection,” said Feinberg. He tied development of hypersonics with nuclear modernization to the Pentagon’s top spending priorities. “It’s a coordinated problem,” citing China’s rapid advancement in both areas.
As for specific West Pacific needs, Feinberg said: “Clearly, we need to develop autonomy in significant numbers” along with hypersonics. He also wants to look closely at the Next Generation Air Dominance program for sixth-generation aviation.
On shipbuilding, critical for operations in the Pacific, Feinberg said “talent is everything.” Working from persistent policy optimization [PPOs] algorithms, the administration, Pentagon leaders and manufacturers “who have done this before” can achieve operational turnaround.
He defined the deputy defense secretary’s role as a person who “has to go program by program, line by line and not pass it off.”
The Pentagon also does not “have the right financial metrics” to assess its own programs and personnel. Feinberg said there are 480 or so systems in the department now trying to do this, but they need consolidation. It’s necessary “to bring in the right help to work closely with the Pentagon to clarify and make simpler” the auditing process.
“It’s super-important, we’ve got to have financial accountability,” he added.
In acquisition, this means eliminating “gold-plating” requirements and then adding to them, which drives costs ever higher, he added.
Several times during the hearing lawmakers asked Feinberg whether he would hold back subordinates from talking freely with Capitol Hill or testifying before committees about their work without fear of retaliation. He said he would not.
The questions, primarily from Democratic members concerned over politicizing the services, were prompted by the Friday removal of Air Force Gen. CQ Brown from his position as the chairman of the Joint Chiefs of Staff; Adm. Lisa Franchetti as the chief of naval operations; Air Force Gen. James Slife as the vice chief of staff of the Army and the judge advocate generals of the Army, Navy and Air Force.
