By John Keller, Chief Editor
Military financial experts have some sobering news for anyone expecting sustained growth in U.S. defense spending: take a good look at the Pentagon's 2005 budget request; that's as good as it's going to get for perhaps the next 10 years.
No, you didn't misread that; don't expect big defense increases over the next decade, despite the global war on terrorism. The U.S. budget deficits — now reaching $521 billion, the weak dollar internationally, and the potentially crushing future Social Security and Medicare obligations to retiring baby boomers may be creating overwhelming pressure to bring down defense expenditures.
These cheerless predictions have some in the defense industry taking a frank look at their long-term prospects. "We thought it was party time when [President] Bush was elected, but if this is as good as it's going to get, then I had better start looking for a door," says a program manager at one defense industry electronics supplier.
Despite the lack of anticipated growth in defense spending, military procurement, research, and operations still represent a substantial slice of the federal budget. Anticipated U.S. defense spending should amount to $5 trillion over the next decade, says U.S. Rep. Jim Moran, D-Va., who sits on the House Appropriations subcommittee on defense, as well as on the House Budget Committee.
Much of this news came in late March at the McGraw Hill Defense Budget Conference in Arlington, Va. Experts from the Pentagon, Capitol Hill, and private industry cautioned attendees about dismal prospects for military growth beyond 2005.
Continuing military operations with no letup in sight make it even worse for technology suppliers and integrators. More soldiers in the field means most of the defense budget goes for beans, boots, and bullets, which leaves dwindling amounts of money left over for technology procurement and research.
U.S. military force and personnel costs in the future could start crowding out research and procurement accounts, and "I don't see any substantial reductions in personnel costs," Moran says.
For federal fiscal year 2005, which begins Oct. 1, the Pentagon is asking for $401.7 billion — up by 0.6 percent from the 2004 request. Of the 2005 budget, The Department of Defense (DOD) wants $74.9 million for procurement — down 7.8 percent from 2004, and 140.6 billion for operations and maintenance — down 19.3 percent from 2004.
One of the few bright spots for 2005 is research and development, for which DOD wants $68.9 billion — up 4.2 percent from 2004. Experts predict an additional $50 billion supplemental defense spending in 2005 to support continuing military operations in the Middle East.
That's the good news. Now for the … well, anyway.
Increases in research spending reflects the Bush Administration's strategy to replenish the pool of military technology so as to make a quantum leap in the capability of the next generation of weapon systems.
That sounds like a good idea — on paper. Time will tell whether there will be many new generations of weapons in the near future. The longer the war on terrorism grinds out on the ground, the more the pressure will mount to defer or eliminate these big future procurements and make do instead with what's already available, albeit with substantial system upgrades.
If the financial pressures that have been brought to bear on the defense budget cause cancellation of many more new projects, military and congressional leaders inevitably will call into question the wisdom of increases in the research and development budget.
Already we can see a troublesome picture emerge from the status of some big-ticket procurements that have been the centerpieces of DOD budgets past. The Army's RAH-66 Comanche attack helicopter: canceled. The Army's Future Combat System: in trouble. The Air Force's F/A-22 Raptor fighter-bomber: of questionable utility.
Experts say the Future Combat System — FCS for short — is "ill-defined, and under-funded," and is causing serious concerns on Capitol Hill. The FCS is to be a networked multimission combat system that consists of several manned and unmanned vehicles and related advanced command and control.
The F-22, meanwhile, has drawn the skeptical gaze of analysts in the U.S. General Accounting Office (GAO), which is the investigative arm of Congress. In a study released March 15, GAO "recommends that DOD complete a new business case that determines the continued need for the F/A-22." Not exactly a glowing review of the program thus far.
Some observers say that even the F-35 Joint Strike Fighter, as well as several secret programs, may shortly come into question and under close scrutiny on Capitol Hill and in the halls of the Pentagon.
"I think the Joint Strike Fighter should stay, but we are getting a lot of resistance to the Joint Strike Fighter and the F-22," Moran says. "I think we will yet see a fighter system sacrificed."
On the upside, however, plenty of opportunities exist for replenishing military technology, such as military wheeled vehicles. "We will have to replace a large portion of or wheeled fleet, 17 percent of which is in Iraq operating at 10 normal operational tempo," says Army Lt. Gen. Jerry Sinn, the Army's military deputy for budget.
Unmanned aerial vehicles, such as the AAI Shadow and the AeroVironment Corp. Raven, are of growing importance to Army operations, says Army Maj. Gen. James Grazioplene, the Army's director of force development.
