Pentagon's Hegseth sees growth in defense spending despite Musk review

By Phil Stewart and Idrees Ali

WASHINGTON (Reuters) - U.S. Defense Secretary Pete Hegseth said on Tuesday he wanted to increase overall U.S. defense spending and played down concerns over a pending audit by Elon Musk aimed at finding billions of dollars in waste at the Pentagon.

Speaking in Germany during his first trip overseas, Hegseth said he had already been in touch with Musk and expressed confidence in the effort to find billions in cost-cutting and to make the Pentagon more efficient.

"There's plenty of places (at the Pentagon) where we want the keen eye of DOGE, but we'll do it in coordination," Hegseth said, referring to Musk's Department of Government Efficiency.

"We're not going to do things that are to the detriment of American operational or tactical capabilities."

Still, Hegseth said he was already "intimately" involved with key committees in Congress about bolstering the U.S. military.

Musk's companies, like SpaceX, also hold major contracts with the Pentagon, which has raised significant conflict of interest concerns.

U.S. President Donald Trump has said the Pentagon will be an early target of Musk's DOGE, which will review U.S. defense spending once it finishes slashing spending at the Department of Education. Trump has said he expects Musk to find hundreds of billions of dollars of fraud and abuse at the Pentagon.

Leaders from across the political spectrum have long criticized waste and inefficiency at the Defense Department.

But Democrats and civil service unions say Musk lacks the expertise to restructure the Pentagon, and their efforts risk exposing classified programs.

Hegseth played down concerns of broad cuts of Pentagon agencies, like those seen at the U.S. Agency for International Development, saying: "The Defense Department is not U.S. AID"

"U.S. AID has got a lot of problems ... pursuing globalist agendas that don't have a connection to America First. That's not the Defense Department."Hegseth suggested Musk may target Pentagon efforts related to climate change, without offering specifics.

"I hope to welcome Elon to the Pentagon very soon," Hegseth said. "Look at a lot of the climate programs that have been pursued at the Defense Department. The Defense Department is not in the business of climate change solving the global thermostat. We're in the business of deterring and winning wars."

Over the weekend, Trump's National Security Adviser Mike Waltz suggested that the Pentagon's shipbuilding processes could be an area of particular interest for DOGE.

The Pentagon's budget is approaching $1 trillion per year. In December, then-President Joe Biden signed a bill authorizing $895 billion in defense spending for the fiscal year ending September 30.

Hegseth said he believed defense spending should increase further, even as he acknowledged concerns over a growing U.S. debt that he said was "a national security liability as well."

"I think the U.S. needs to spend more than the Biden administration was willing to, who historically underinvested in the capabilities of our military," Hegseth said.

"So the president is committed, as he was in the first term, to rebuilding America's military by investing."

At a minimum, Hegseth said, the U.S. defense spending should not drop below 3% of GDP. The World Bank, citing data from the Stockholm International Peace Research Institute, says the United States spent about 3.4% of GDP on defense in 2023.

(Reporting by Phil Stewart and Idrees Ali, Editing by Franklin Paul and Marguerita Choy)