Secretary of Defense Pete Hegseth is trying to harness two seemingly untamable forces: the Pentagon and the Department of Government Efficiency. First, he ordered the military to reallocate 8% of its budget away from low-priority items like climate change to better align with President Donald Trump’s ‘America First’ programs. If implemented, the budget shift would result in a 40% adjustment toward funding Trump’s priorities over DOD’s standard five-year defense program.
Hegseth emphasized that his directive is ‘not a cut.’ Instead, he is ‘refocusing and reinvesting existing funds into building the force.’ Second, Hegseth has acknowledged that DOGE had officially entered the Pentagon. DOGE, he explained, would ‘be incorporated’ into DOD efforts ‘to find fraud, waste and abuse in the largest discretionary budget in the federal government.’
Hegseth is shrewdly attempting to leverage the power of DOGE and implement a much-needed comprehensive reform of the Pentagon budget. His reallocation plan assumes that savings from wasteful and unnecessary programs should be large enough to fend off pressure for more harmful cuts, potentially in areas essential for warfighting. His success will hinge on whether DOGE will embrace Hegseth’s 8% budget reallocation plan or if it demands blanket cuts on the Pentagon. President Trump, who has indicated he will allow his cabinet secretaries to take the first crack at cuts instead of DOGE, will be the pivotal player in Hegseth’s gambit.
Hegseth’s position is similar to another reform-minded Defense Secretary, Robert Gates. Fifteen years ago, Gates warned that after a decade of war in Iraq and Afghanistan ‘the gusher of defense spending’ was over. With budget cuts looming, Gates reached an agreement with President Barack Obama that any efficiency and overhead savings he found could be reinvested back into force structure and modernization priorities — rather than used as an excuse to shrink the Pentagon budget.
Gates found $100 billion in savings by reducing Pentagon contractors, canceling weapons programs like the Marine expeditionary fighting vehicle, and shuttering excess organizations like Joint Forces Command, but Obama reneged on his promise. He argued he could not justify real growth in the defense budget amid a debt crisis. Nine months later, Obama signed the Budget Control Act into law, with disastrous consequences for defense. In the 10 years after the BCA was enacted, the Pentagon’s budget was cut by 14%, totaling nearly $1 trillion.
Trump will determine whether his team repeats the same mistake as Obama and Gates. Unlike 2010, the stakes are even higher and there is a consensus in Washington that America needs a military buildup to confront China’s unprecedented military modernization. Over the past two years, the PRC has enjoyed a 15% increase in its defense budget. This year China’s defense budget growth will outpace China’s economic growth, revealing where Xi’s real priorities lie.
Congress appears to be doing its part to help. The reconciliation process underway on Capitol Hill may add $150 billion in defense dollars over the next decade. Reconciliation is an opportunity to move beyond the perennially dysfunctional annual defense authorization and appropriation bills.
The multi-year funding measure would allow the Pentagon to recapitalize an industrial base that has not seen an upgrade since the 1980s.
Defense funding in a reconciliation measure is especially critical to these priorities because, as Hegseth warned, substantial defense increases may not be coming in the president’s own budget request. That reality explains why Hegseth has said the Pentagon may have to make do with the resources already available and ‘make sure that every dollar goes further.’ Hegseth’s order could reallocate at least $50 billion this fiscal year and nearly $250 billion over the life of the defense program.
Internal efficiencies along the lines of what Gates found more than a decade ago combined with capital increases from a reconciliation measure could deliver transformative results: a leaner, more agile Pentagon now able to recapitalize the industrial base, deploy new technologies and catalyze other underfunded priorities like munitions production critical to a China fight. A predictable flow of capital would go a long way toward realizing Trump administration priorities like expanding shipbuilding capacity and the Golden Dome national missile defense system.
Trump has declared ‘we will again build the strongest military the world has ever seen. We will measure our success not only by the battles we win but also by the wars we end — and perhaps most importantly, the wars we never get into..’
Whether DOGE prunes away DoD’s excess waste and inefficiencies or is an anvil that smashes through Pentagon programs – good and bad alike – is in President Trump’s hands. He uniquely can prevent the mistakes of his predecessors and allow the Pentagon to reinvest in itself and carry out the goal outlined in his platform to ‘Strengthen and modernize our military, making it, without question, the strongest and most powerful in the world.’
Michael Stanton is a research assistant at the Reagan Institute.