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The real issue with Iran sanctions

Paul Richter of the LA Times reports that China, India, Russia, and Turkey are rushing to cut energy deals in Iran despite the recently passed U.N., U.S., and Europe sanctions -- a story that will come as a shock only to those who haven't been paying attention.

Many folks seem to be reading the article as proof that the sanctions aren't working. Well, maybe.  As you can see here, Secretary of State Hillary Clinton doesn't have a very good answer as to what the administration is doing to convince China to be more cooperative.

What we don't know is whether the actions of Iran's new friends outweigh whatever bite the sanctions are providing. For that, we'll need a lot more than the anecdotal evidence we've seen so far -- but we probably won't get it.

A few weeks back, I asked a senior administration official how we'd know that the sanctions were working. I expected him to talk about oil and gas deals drying up, insurers staying away, and so on. Instead, what he said was: We'll know it when Iran comes to the table, seeking to cut a deal.

That's probably the right way to look at it. According to Iran analyst Gary Sick, the key question isn't whether the sanctions are biting, but "whether Iran is capable under its present leadership to take a sober decision about how to deal with the outside world."

So far, most signs point to no.

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Gates wields the knife

In a press conference today, Defense Secretary Robert Gates briefed reporters on a major overhaul within the department as it seeks to trim $100 billion from the military's budget over the next five years. Gates recommended that the Joint Forces Command (JFCOM), one of the DOD's 10 combat commands (which also include Central Command, focusing on the Middle East, European Command, and African Command, among others) be eliminated and its duties absorbed elsewhere within the department.

Additionally, the Pentagon will try to cut the use of outside contractors by 10 percent per year for each of the next three years.Gates announced freezes and cuts in the department's use of contractors, hiring of upper level civilian and military staff, report and study generation, development of intelligence organizations, and use of outside boards and commissions to provide independent advice. In addition to calling for the elimination of JFCOM, the Pentagon will eliminate the office of the assistant secretary of defense for networks and information integration (NII) and the Business Transformation Agency.

Gates said that given the realities of fighting two wars, ongoing terrorist threats, other major powers investing heavily in their own militaries, and the current economic and fiscal situation, the DOD "must make every dollar count." He emphasized that this was not a budget cut, just a shifting of resources within the department.

"I've been determined to change the way this department does business for a long time," Gates said, noting that a culture and attitude of "endless money" must be replaced by one of "savings and restraint."

"It's about reforming and reshaping priorities to insure we can focus resources where they belong," he said. "Most importantly, our men and women in uniform."

The Defense Business Board (DBB), the Pentagon's independent board of economic and business advisors, found in a report delivered to Gates in July that JFCOM, headquartered in Norfolk, VA,  has more contractors on its payroll than military or civilian personnel. JFCOM, once known as the U.S. Atlantic Command, was established during the Cold War to defend Atlantic sea lanes from Soviet attack. In 1999, it was renamed and given a new mission to focus on education and experimentation across all branches of the armed services.

This decision is part of a large initiative to save $100 billion over the next five years by reducing waste and duplicate spending at the Pentagon, reflecting the scaling down of the wars in Iraq and Afghanistan. The hope is to use that savings for fighting forces and the modernization of weapons systems. According to The Hill, the Defense Department is expecting to pay $200 billion in indirect operating expenses this year alone -- an amount higher than Israel's annual GDP. Eliminating JFCOM could save the Pentagon billions of dollars.

JFCOM employs nearly 4,900 people in Virginia. According to the AP, Senator Mark Warner, who has also served as the state's governor, said he saw "no rational basis" for dismantling JFCOM. "One thing I learned in the business world is you sometimes have to spend money to save money," he said. "It's a no-brainer that JFCOM is one of the commands that could use more resources."

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