The Department of Defense, wary of a possible $600 billion cut that could take place under the Budget Control Act, is working to map spending trends throughout the United States’ vast military-industrial complex.
The default cut will kick in if the Congressional supercommittee is unable to pinpoint $1.5 trillion in Federal spending cuts by Nov. 23.
“Cuts of this magnitude would be catastrophic to the military,” Army Chief of Staff Gen. Raymond T. Odierno has told House members. “In the case of the Army, it would significantly reduce our capability and capacity to assure our partners abroad, respond to crisis and deter our adversaries while threatening the readiness and potentially the all-volunteer force.”
The Defense Department is working in various ways to validate its massive expenditures and stave off cuts to its budget. Focusing on the massive amounts of money that the department pays out to its industrial base, Defense officials are attempting to map just how and where dollars are spent.
Brett Lambert, deputy assistant secretary of defense for manufacturing and industrial base policy, testified before the House Armed Services Committee on Wednesday, saying the military’s industrial base includes companies of all shapes and sizes, from garage start-ups to some of the world’s largest public companies. He added that most of the companies patronized by the military have little or no direct involvement with defense, but act instead as suppliers.
Lambert said that the Defense Department is doing everything it can to ensure that it is only paying reasonable prices and receiving optimal service from industrial base companies. As cuts loom, he says the department will work to find out exactly where each dollar goes and eliminate some “soda-straw visibility” in defense spending.
“In the high-budget environments of the past, many companies have grown to expect high [profit] margins, independent of quality,” he said. “As budgets shrink, this practice must end. As the budget environment changes, we do expect some niche firms to face difficulty due to decreased demand.”
The Defense Department also says that it is doing everything it can to include more small businesses in its industrial base.
The Defense Department has spent nearly $8 trillion on national security since 2001.