[0] Wendover Productions has a great video about the insane amount of logistics dedicated to the goal of never having to wait for materiel practically anywhere in the world. https://www.youtube.com/watch?v=iIpPuJ_r8Xg
The issue is that the US population has a very low tolerance for combat losses (especially losses defending a foreign country), and the Chinese population (read Communist Party) has a much higher one (especially losses towards what they perceive as country reunification). If in a fight the US inflicts one million Chinese casualties, while incurring one hundred thousand, then the US might call it quits.
The US need not only be able to defeat China, but do it with minimal losses. That's why you need to maintain the huge capabilities gap that currently exists.
https://fiscaldata.treasury.gov/americas-finance-guide/feder...
I won't speak to whether or not its wise to reduce military funding, but your statement about why you can't have non-locals working on local projects runs counter to my experience.
From about 2004 to 2014, the state of Oregon spent somewhere somewhere around $1.3 billion to repair hundreds of bridges. The consultant managing the effort assembled a team of dozens of highway and bridge engineers, who worked closely with Oregon Department of Transportation, the NTSB and the Federal Highway Administration to make sure it all complied. For the record, getting a state to sign off on bending state regulations is typically a lot easier than getting the Fed to sign off on bending Fed regulations, to the extant that if a state has less stringent road requirements, those state requirements only apply on roads not covered by the FHWA.
At the end of the project, most of those consulting engineers then got flown to other states (Florida and Pennsylvania come to mind) to work on projects of similar sizes. Does a transplant from Oregon have more knowledge of local concerns than a native Floridian and Pennsylvanian? Of course not. But it turns out that you can hire local for negotiating with contractors, but you cannot just hire local when it comes to managing billion-dollar construction projects, if those don't happen very often locally.
The only difference between a federal organization to manage projects of this scale and a private consulting firm is that the bill to the taxpayers on the latter is an order of magnitude larger.
Draining the US military of 1/5 of it's budget while Russia is invading it's neighbors and China is more aggressive with Taiwan is probably unwise.
Then bringing in federal assets to run an extremely local project (forcing those people to also travel for extended periods of time), with no jurisdiction (fed can't overrule state laws on planning typically) sounds like a disaster.
The government also has a very spotty track record with construction projects.