Sunday, December 13, 2009
DoD To Add $100B to 2011-15 Spending
The Obama administration will add $100 billion to the Pentagon's 2011-'15 base budget plan to cover the rising cost of personnel and pressing modernization needs, officials said.
IF APPROVED BY Congress, the additional money would allow U.S. defense spending to rise about 1 percent above projected inflation, analysts said. (AFP)
If approved by Congress, the money would allow U.S. defense spending to rise about 1 percent above projected inflation, analysts said.
The Pentagon's 2010 budget request called for $534 billion, plus $130 billion to cover the wars in Afghanistan and Iraq. It did not include the estimated $30 billion that will be needed to fund President Barack Obama's recent decision to send 30,000 more troops to Afghanistan.
Nor did the 2010 spending plan contain the customary five-year spending outlook, although the new Obama administration had in January pledged annual defense spending of about $540 billion, plus inflation, plus $50 billion for operations.
Among other procurement efforts, the money will pay for new Air Force global strike programs - including work on new manned and unmanned systems - Army brigade combat team modernization, a Navy attack submarine, and the Navy's new Carrier Long-Range Strike system, sources said.
Pentagon spokesman Bryan Whitman declined to discuss the administration's budget deliberations. But multiple sources confirmed the $100 billion figure.
Analysts called the decision a victory for Defense Secretary Robert Gates, who has lobbied the White House for more funding. Gates, who reviewed a draft of the Quadrennial Defense Review in early December, is to meet with the military services this week to discuss their spending plans, sources said. The QDR and 2011 budget request are due to Congress in February.
Gates, who scrutinized a draft version of the QDR on his trip last week to Afghanistan and Iraq, announced in Kirkuk, Iraq, that the review likely will endorse a new family of Air Force long-range strike systems that are manned and unmanned. In April, Gates pushed back funding for the Air Force's new bomber, stripping it from the 2010 budget.
The QDR and 2011 budgets are being shaped with an eye toward strengthening the U.S. defense industrial base, sources said. Pentagon acquisition chief Ashton Carter and industrial policy director Brett Lambert have said DoD must better preserve key industrial capabilities, in part by spending more. Lambert has said he worries about major prime contractors but is applying more focus on second-, third- and fourth-tier firms that supply critical components and skills.
Pierre Chao, the managing partner of Renaissance Strategic Advisors, called the plus-up "a welcome relief."
"From a macro perspective, it means that the administration is focused on funding defense at the right level, that they are very sensitive to the strains on personnel and those concerns will be funded," Chao said. "To those who were focused on the programs and hardware side, it provides relief to the extent that programs don't have to be raided to support the people side of the department."
The Lexington Institute's Loren Thompson noted that Gates had pressed the White House to keep the Pentagon budget growing faster than inflation.
"It's important to understand that a significant amount is going to rising health care costs; however, there is no question increase of this magnitude will allow the continued modernization of weapons systems," Thompson said.
But Gordon Adams, a defense budget expert with Henry L. Stimson Center and American University, said the plus-up is back-loaded, with most of the money coming in the last years of the five-year plan.
"In the first year, it doesn't look like much, but in the out-years it's a big deal," Adams said. "But as Mark Twain is said to have said, making predictions is difficult, especially about the future. It's the near-term war that matters and they are not getting anything like the growth they wanted in year one, and that's where the real money is."
Posted by Steve Douglass at 6:40 AM