Gates advisor calls for overhaul of military fringe benefits.

• Position: DEFENSEINSIDER

The so-called "efficiencies" that Defense Secretary Robert Gates is seeking in the Pentagon's budget are only a drop in the bucket when it comes to tackling wasteful spending by the Defense Department, said a senior advisor to Gates, retired Marine Maj. Gen. Arnold Punaro.

"The military has generated a General Motors-style system of fringe benefits and deferred compensation" that could bankrupt the Defense Department, Punaro said. Further, with 40 percent of the defense budget now being consumed by overhead--and that share expected to rise--the military's capabilities to fight wars are being drained by bureaucratic bloat, Punaro explained. Putting it in context, the Defense Department's overhead costs of $212 billion are larger than the entire economy of Israel.

The Defense Department doesn't spend its money wisely, he said.

Punaro noted that the office of the secretary of defense in 1997 had 3,000 employees. That work force was deemed too large by then-Secretary William Cohen and he cut it by 1,000. Today, OSD has 5,000 workers and spends $5.5...