#1, I'm fine with, DOD has always had a huge problem with austerity in how shit looks versus what the really need. I could tell you some stomach-turning stories of the kind of things the 3ID CG wanted to spend money on when I deployed there.
#2, I don't get the 'Head count' comment, this doesn't really have anything to do with DOD population, it means studies of all sorts of esoteric contingencies; a lot of it is actually necessary/desirable like studying TBI effects or suicide reduction, or (In the case of DARPA) important foundational research. Then again a lot of it is crap to keep money flowing and people busy, too. SOME economy is certainly possible here.
#3, I don't have a problem with it, managers can deny step increases now for poor performers, they just normally don't because they have better things to do than spend the next three years in and out of bullshit EEOC hearings over trying to do it. I don't have a problem with applying it to the seniority increases of underperforming UNIFORMED personnel, either, those are basically just the uniformed equivalent of the civil service step increases, and anyone who thinks all military personnel are executing their jobs perfectly, or even adequately in a lot of cases, is a total idiot.