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06 Oct 08. The last time an impending U.S. Presidential Election loomed was in 2004, when the prospect of a Democrat President in the form of John Kerry caused analysts and Companies to rethink their strategies as the Democrats have historically cut defense spending.
At AUSA 2008 there was a more sombre mood on the floor with most pundits putting the scare stories of huge cuts by incoming President Obama, seen by some as given, behind them, offering a more balanced view of the future.
As we reported form the AUSA West Conference at Long Beach in May, the view of the top brass and General Metz in particular was that the current budget figures and Programs would survive but supplementals would disappear with some Programmes cut off in mid-stream. He asked industry for urgent COTS/MOTS solutions to bring these Programs to a conclusion and fielded, particularly the IED defeat systems, CREW in particular. One observer took a more sanquine and down-beat view and said that housing, as in the UK, was a major concern to the DoD and some Programs would have to go to meet the new housing repairs required to bring them up to standard.
But in general AUSA was very positive and busy with many contractors reporting new deals and products with JLTV, as we will report next week, taking centre stage, as ‘The Last Big Program.’
Retd. General Dan Zinini of SAIC, when asked at the FCS brief whether he expected FCS to be reviewed was very sanguine. He said that the FCS Team expected a review of FCS and it would be a timely moment to do so. He did not expect any big changes apart from the generally reported view of more short to medium funding going to the Infantry Brigades and not the heavier end of the Army. This would mean more spirals as we have reported over the past few years and which we will report next week.
Apart from FCS, Apache Block 3 looks safe although, as we report here ARH has been shelved. (See: Department of Defense will not certify the U.S. Army ARH program). The GD Stryker Program has had a cut of $1.5bn to meet spirals for the infantry whilst some observers see NLOS C as becoming part of the Stryker Brigade. The distinct lack of any FCS vehicles outside NLOS was noticeable from General Cartwright’s charts
October 9th media reports suggested that Pentagon officials have prepared a new estimate for defense spending that is $450 billion more over the next five years than previously announced figures. The new estimate, which the Pentagon plans to release shortly before President Bush leaves office, would serve as a marker for the new president and is meant to place pressure on him to either drastically increase the size of the defense budget or defend any reluctance to do so, according to several former senior budget officials who are close to the discussions.
However, experts note that releasing such documents in the twilight of an administration is a well-worn tactic, and that incoming presidents often disregard such guidance in order to pursue their own priorities. And with the nation’s economy caught up in a global financial meltdown, it remains unclear whether either Sen. John McCain , R-Ariz., Sen. Barack Obama ,
D-Ill., or a Democratic Congress would support such large increases for defense next year.
“This is a political document,” said one former senior budget official, who spoke on the condition of anonymity. “It sets up the new administration immediately to have to make a decision of how to deal with the perception that they are either cutting defense or adding to it.”
Dov Zakheim, the Pentagon’s top budget official from 2001 to 2004, who is not involved in the current discussions, agreed.
“The thinking behind it is pretty straightforward,” Zakheim said. “They are setting a baseline for a new administration that then will have to defend cutting it.”
The fiscal 2010 portion of the estimate includes a $57 billion increase, out of which $30 billion would go for a vaguely defined contingency fund and $14
billion would go for replacing or fixing existing equipment, called reset, and modernization, the former officials said.
They added that those items reflect the Pentagon’s attempt to anticipate the end of huge supplemental war allotments that have hidden the costs of resetting and modernizing the nation’s war-torn force. Both presidential candidates have pledged to scale back supplemental war spending.
But the numbers also seem to condradict the National Defense Strategy released recently by Defense Secretary Robert M. Gates , which called for tough tradeoffs in spending in an environment of limited resources.
“We cannot do everything, or function equally well across the spectrum of
conflict. Ultimately we must make choices,” Gates wrote.
The new estimate, which has not been publicly released, would raise the fiscal 2010 budget number announced by the administration this year from $527 billion to $584 billion, not counting operations costs for the ongoing wars.
Money to prosecute the ongoing wars is not included in the new estimate, meaning the military would still need significant supplemental appropriations in addition to the increased budget request.
Supplemental appropriations have been used to fund procurement and personnel
costs that are predictable and therefore should be placed into the regular
budget, said Admiral Michael Mullen, the chairman of the Joint Chiefs of Staff.
“We’re going to have to figure out how to get off supplementals,” Mullen told a group of Washington reporters on Thursday. “My strategic approach is to start to implant those things that are in supplementals that we think we’ve got to have into the baseline budget. We need to start doing that. We’re working our way through the next budget now.”
While reset and modernization funds in the new estimate are relatively non-controversial, the $30 billion contingency fund could face stiff opposition on Capitol Hill. That money, if approved, would be available to rapidly deploy active duty forces overseas in the event of an unexpected crisis.
Both candidates have called for a wholesale reform of the Pentagon’s acquisitions system in an effort to control procurement costs, which have ballooned in recent years due to mismanagement.
Gen. George Casey, the Army Chief of Staff, told 3,000 attendees at the Eisenhower Luncheon Oct. 7 that a year after he had warned that the Army was out of balance because of the operational demands of the war on terror, the force was “well on the path” to bringing itself back into strategic balance. But, Casey warned, there were “a couple of tough years ahead,” and said one of his main challenges was to prepare for the future.
Meeting that challenge would require completing the expansion of the total Army to 1.1 million soldiers, continue the development of the Future Combat Systems and to produce leaders and doctrine able to deal with increasingly complex conflict against a determined enemy that threatens America’s way of life.
Noting that the theme of this year’s AUSA symposium was that the Army was “the strength of the nation,” Casey said, “At no time in our history has that strength been more important.” The seven years of the war on terror have been met by service and sacrifice “that come from our values and our warrior ethos. That gives me great confidence we will prevail in the global war on terror and handle whatever challenges we face in the future.”
The general recalled that he had set three imperatives to restore the Army’s balance: to sustain the force, prepare it for the current and future conflicts and reset the units on return from combat. “We’ve made very good progress,” he said.
To sustain the force, he noted the success in recruiting and retaining 300,000 active, National Guard and Army Reserve soldiers last year; a successful initiative to stop the exodus of captains; producing the Army Family covenants and doubling funding for family programs; creating 35 warrior transition units and other efforts to care for the wounded soldiers and “removing the stigma attached to PTSD and traumatic brain injury.”
To prepare the force, Casey said, they saw that extending the time between combat deployments was critical so they accelerated the effort to add active and Reserve soldiers, with the support of President Bush and Congress; ended the 15 month deployments and produced more than one million pieces of new equipment to provide the troops the best equipment and technology.
Resetting included changing the combat training centers from their conventional war format, reset 125,000 pieces of major equipment and moved to standardize the reset process. He said “the successful reset process will be the cornerstone of the expeditionary Army,”
Casey said the Army was “well on the path” to the 1.1 million force by 2010, was almost 85 percent done with modularizing the force and 63 percent completed in rebalancing the soldiers’ skills from Cold War to 21st century requirements. The Army also has restructured the FCS program, unveiled the non-light-of-sight cannon and produced the first major new doctrine in decades.
The general also emphasized the effort to convert the Guard and Reserve from the Cold War strategic reserve to an operational reserve. “There is more to do, but I believe we are closer to a total force than any time in my service,” he said.
For the nation to succeed in the persistent conflict of the future, Casey said, “Our land forces – the Army, Marine Corps and Special Operations forces – must be capable of full spectrum combat operations.” Those forces must be versatile, to cope with uncertainty; must be expeditionary, able to respond quickly to emerging threats anywhere; must be agile in forces and mindset to adjust to changing threats; must be lethal; must be sustainable at long distances, and must be interoperable with U.S. and foreign military forces and with American civilian agencies.
Because leadership is essential to everything they Army does, he said, they must develop leaders able to meet the future threats and “we have to be guided by our values and our warrior ethos.” (Source: Otto Kreisher)
In visits to Northrop Grumman’s Baltimore plant where the company is the Maryland State’s largest employer, Northrop told BATTLESPACE that they were still employing and finding it hard to source key staff. Oxley Inc. told the Editor the same story in Brandford Connecticut. With Wall Street jobs falling fast and affecting the greater economy, the defense industry is one stalwart which still has growth potential due to the current wars and threats and the incoming President is unlikely to make huge cuts. One area which is also crying out for staff is the security segment which needs linguists and mathematicians for the upcoming 2012 Olympics in particular. These jobs can be filled by ex-Wall Street analysts.
What was interesting about this year’s AUSA was the melee taking place in the streets above AUSA in Washington DC’s Congress and Senate. When the Editor surfaced and went for a very welcome drink with the British Emnassy team at a down town pub he was greeted by many people, particularly Trevor Harrison of NDI who asked the Editor what he thought of the cabinet changes in the UK! That news and the huge drops on Wall Street and the word’ markets had not filtered down to the AUSA floor!
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