Behind the Headlines with Mark Hyman: Pentagon Accounting

Behind the Headlines with Mark Hyman.

Pentagon Accounting When he was Secretary of Defense, Donald Rumsfeld gave a rather significant speech. Unfortunately, it was immediately forgotten. The very next day was September 11th. In his speech, Rumsfeld admitted that DOD was incapable of tracking $2.3 trillion in spending. Rumsfeld didn't say the Pentagon lost $2.3 trillion. He said the Pentagon's accounting process was so complex and cumbersome that it couldn't determine when, were, how, or if the money was spent. DOD spent $366 billion in 2001. The entire Federal budget was $1.8 trillion. So losing track of $2.3 trillion over a period of years is huge.

Last year, the Pentagon spent about $820 billion. It still cannot account for how billions are spent. Four years ago this week, Defense Secretary Robert Gates directed the military services to reduce staffing and operational inefficiencies to save money. Today, the process to identify inefficiencies in the Pentagon is well, inefficient. The Government Accountability Office found no real progress has been made in identifying inefficiencies -- let alone eliminating them. DOD has been given a pass in balancing its books while waging wars in Afghanistan, Iraq and Libya. But, that dog don't hunt no more. It's long past time for the Pentagon to get its financial house in order.

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