It’s really, really, really difficult to be optimistic about cutting Pentagon waste. There are a massive amount of entrenched interests — in the services, on the Hill, among the hordes of defense firms just across the Potomac — that exist to ensure the safe delivery of defense contracts to well-heeled and politically-connected companies, with the protection of national security a secondary interest. Then there’s the demagoguery and jingoism that comes along with attempts to cut through that waste. So even before President Obama started saying he would "eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we’re not paying for Cold War-era weapons systems we don’t use," it was probably inevitable that people would start floating the meme that his defense budget is irresponsible.

But Obama might have actually taken a significant step today to take on that entrenched apparatus.

This morning Obama issued a memorandum to the heads of all the executive departments agencies directing them to restrict no-bid contracts; to rein in outsourcing of "inherently governmental activities"; and to, if necessary, cancel wasteful contracts outright. The crucial paragraph, even if it’s written in bureaucratese, particularly calls out the Defense Department:

I hereby direct the Director of the Office of Management and Budget (OMB), in collaboration with the Secretary of Defense, the Administrator of the National Aeronautics and Space Administration, the Administrator of General Services, the Director of the Office of Personnel Management, and the heads of such other agencies as the Director of OMB determines to be appropriate, and with the participation of appropriate management councils and program management officials, to develop and issue by July 1, 2009, Government-wide guidance to assist agencies in reviewing, and creating processes for ongoing review of, existing contracts in order to identify contracts that are wasteful, inefficient, or not otherwise likely to meet the agency’s needs, and to formulate appropriate corrective action in a timely manner.  Such corrective action may include modifying or canceling such contracts in a manner and to the extent consistent with applicable laws, regulations, and policy. [My emphasis]

Clearly this has applications far beyond the Pentagon. But the list of big-ticket defense items that have experienced huge cost overruns is a long one. Future Combat Systems in the Army; the Littoral Combat Ship in the Navy; the Joint Strike Fighter in the Air Force — all of these programs, near and dear to the services, have run massively over budget. If I was a lobbyist for Lockheed or Boeing, I’d be dialing my contacts in the Pentagon and the Hill to figure out what the prospective damage to my company was. And then I’d come up with a strategy to fight this forthcoming OMB review.

Obama went further in remarks at the White House, calling it a "false choice" to say that protecting the country requires acquiescence Pentagon waste. "In this time of great challenges," he said, "I recognize the real choice between investments that are designed to keep the American people safe and those that are designed to make a defense contractor rich." He also lent support to Sens. Carl Levin (D-Mich.) and former presidential rival John McCain’s (R-Ariz.) legislation to create new procurement oversight positions at the Pentagon. "The days of giving defense contractors a blank check are over," Obama said.

This effort hardly seems perfect. One of the people Obama specifically tasked to work with OMB for procurement reform is Bill Lynn, the deputy secretary of defense whose last job was lobbying for defense giant Raytheon. Perhaps Lynn is here because he knows how defense lobbyists work, and can come up with strategies to beat them at their own game. Or perhaps Lynn will find it difficult to overcome his background — and the sure-fire job waiting for him in the defense-lobby sector when he leaves government. And, of course, the defense lobby is one of the most powerful in Washington.

But Obama has now placed defense-contracting reform at the center of his efforts at cutting wasteful spending, and he’s put cutting wasteful spending at the core of his deficit-reduction approach; and both the press and the Republican Party will watch that deficit-reduction approach as a test of his presidency. That line from his YouTube address on Saturday about being ready for a fight with lobbyists over his budget? He might mean it.

Crossposted to The Streak.