Hegseth wants massive Pentagon cuts, but many obstacles stand in his way
The Pentagon is not unaccustomed to what its denizens term 'cut drills.' These are last-minute orders to find funds to cut, numbering in the hundreds of millions or even billions of dollars, in an upcoming or current budget.
Because of the last-minute nature of such requests for budget reductions, the programs most often scuttled are promising new development efforts, whether already in procurement or still in research and development. Legacy programs, on the other hand, which both Pentagon bureaucrats and Hill staffers favor, inevitably avoid the budget guillotine.
Secretary of Defense Pete Hegseth's demand for what can only be termed 'the mother of all cut drills' renders it inevitable that few programs, new or long-standing, will survive unscathed. His memo calls for an annual 8 percent reduction in budget authority though fiscal 2030.
The Pentagon has indicated that its fiscal 2026 target is about $50 billion in cuts. But that amounts to less than 6 percent of the 2025 Biden defense budget. An 8 percent reduction in actual new budget authority would come to $72 billion in fiscal 2026 and some $375 billion through fiscal 2030.
Both sets of estimates appear to be based on an annual inflation rate of 2.1 percent through 2030, which the Department of Defense assumed in its fiscal 2025 budget projection. But that rate seems artificially low, given the likelihood that the inflationary impact of tariffs will drive rates above the already higher current inflation rate of 3 percent. Applying a higher inflation rate could increase the Hegseth targets by at least another $10 billion.
Hegseth has indicated that 17 categories of defense spending will be exempted from the proposed cuts. Some of these exemptions are vague programs with potentially major costs. The most egregious example is the plan for an Iron Dome system over America. This effort could cost as much as $100 billion annually through 2030; its total cost has been estimated at $2.5 trillion. Other programs — such as priority critical cybersecurity, 'executable surface ship programs' and what are termed 'Indo-Pacom construction projects' — will be less expensive than Iron Dome, but have yet to have their costs defined.
Still other exempted programs with well-developed estimates will also consume a significant portion of the defense budget over the next several years. These include Virginia-class submarines, with a unit cost in excess of $7 billion; the Air Force Collaborative Combat Aircraft program, ranging from $750 million in FY 2026 to about $3 billion in FY 2030; the strategic nuclear modernization program, amounting to at least $18 billion annually; and Replicator and other dispensable drones, which, depending on the number purchased, could approach $1 billion.
Given the decision to exempt major Navy and Air Force programs, it appears that Army programs, especially Army force levels, will be a major target for significant cuts. While Hegseth is unlikely to reduce military pay and benefits, their costs would drop commensurate with any reductions in military personnel.
Civilian employee levels are certain to be another major target for reductions. The number of Defense Department civilians has risen since 2003 by 137,000, or nearly 20 percent, even though the U.S. is not involved in a major conflict. By far the biggest increase has been in the Defense Agencies, totaling over 80 percent. There appears to be no real justification for these increases.
Finally, base operations, long considered to be a funding 'black hole' within the operations and maintenance accounts, could also face significant reductions. To achieve these cuts, however, requires an ability to identify how exactly funds for base operations are put to use. That has proved to be exceedingly difficult in past budget reduction attempts .
While Army force levels, defense civilians and base operations are likely targets for budget reductions, the Pentagon has but a few days to identify these or other bill-payers for the so-called exempted programs, as well as the sources of the $50 billion or more in budget cuts that Hegseth is seeking.
It is noteworthy that the Department of Defense did not list either aircraft carriers or the F-35 program as targets for reductions or even program termination. Until now, the only clearly identified reductions are in so-called 'woke' programs, and climate-change related efforts. Eliminating them will not bring the Pentagon even remotely close to its budget reduction target. To come anywhere close to Hegseth's target, the Pentagon bureaucracy will engage in yet another cut drill, with many promising programs falling on the cutting room floor while legacy activities survive yet again.
Moreover, many of the administration's proposed reductions will have to face significant congressional opposition, even from otherwise supportive Republicans. There is a lengthy list of legacy programs that have survived well beyond their optimal service lives due to the jobs they created and sustained in members' districts. Bureaucrats working on these programs have a history of providing legislators with ammunition to sink any effort to kill their pet programs. As a result, even dovish members of Congress have consistently and successfully defended programs located in their district, regardless of expense or military suitability.
Hegseth was able to overcome the challenges of Senate confirmation. That experience will be nothing compared to the congressional buzzsaw that is sure to materialize once he has actually specified which Pentagon programs he seeks to cut.
He will not find it a pleasant experience.
Dov S. Zakheim is a senior adviser at the and vice chairman of the board for the Foreign Policy Research Institute. He was undersecretary of Defense (comptroller) and chief financial officer for the Department of Defense from 2001 to 2004 and a deputy undersecretary of Defense from 1985 to 1987.
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