Bloomberg News

Pentagon’s Budget Plan to Draw 40% of Cuts From Weapons Systems

February 21, 2012

Feb. 11 (Bloomberg) -- The U.S. Defense Department’s fiscal 2013 spending plan draws more than 40 percent of proposed reductions from weapons accounts that contribute less than a fifth of the budget, based on Pentagon projections.

The military budget that President Barack Obama will send to Congress on Feb. 13 calls for $525 billion in spending, a reduction of $45 billion from previous projections. About $18.7 billion of the cuts would come from weapons procurement, according to data provided by an official who spoke on condition of anonymity because the budget hasn’t been submitted.

The breakdown shows the Pentagon is cutting weapons more deeply in an effort to limit cuts in personnel and benefits, according to Todd Harrison, a defense analyst.

“Compare that to spending on military personnel, which accounts for one-third of the budget but is only taking one- ninth of the cuts,” Harrison of the Center for Strategic and Budgetary Assessments in Washington, said yesterday in an e- mail. “Protecting pay, benefits, and end strength is a higher priority than modernizing weapon systems.”

The $98.8 billion the Pentagon will propose spending on weapons in fiscal 2013 compares with $117.5 billion it had projected for the same period a year ago. Through 2017, cuts in weapons spending would average about 37 percent of the annual reductions projected by the administration, according to a nonpartisan government analyst who also spoke on condition of anonymity before the budget submission.

Details behind the reductions will unfold over the next month as lawmakers and their staffs press the Pentagon for specifics and military officials outline their respective service budgets.

Cutting 100,000

A five-year plan outlined by Defense Secretary Leon Panetta last month calls for slowing weapons acquisition and reducing forces by 100,000. That plan already has been criticized by Republican lawmakers as cutting too many people.

“The president has abandoned the defense structure that has protected America for two generations, turning 100,000 soldiers and Marines out of the force,” California Republican Representative Howard “Buck” McKeon, chairman of the House Armed Services Committee, said in a Jan. 26 statement.

Few weapons systems would be canceled outright by the Pentagon.

“The absence of big program kills may suggest to investors that DoD investment fared relatively well,” Byron Callan, a defense analyst with Capital Alpha Partners LLC in Washington said in an e-mail. “These procurement figures suggest a tougher reality for industry. Even without big, iconic platform cuts, industry will still see some pain.”

Lockheed’s C-130

One project being canceled is $4 billion to modernize the C-130 transport plane built by Lockheed Martin Corp. The Navy plans to cut eight of nine planned Austal Ltd. high-speed transports.

Mostly, programs would be delayed, such as postponing until after 2017 the purchase of 179 of Lockheed Martin’s F-35 fighter jet. One Virginia-class submarine would be moved to 2018, and acquisition of 24 V-22 Osprey aircraft would be postponed.

“The defense aerospace, shipbuilding, and vehicle manufacturing industrial base will take a big hit in a short amount of time under these proposed spending levels,” MacKenzie Eaglen, a defense analyst with the American Enterprise Institute in Washington, a policy group, said in an e-mail.

“Yes, there will still be ‘reset,’ maintenance, overhaul and repair work for some companies, but not nearly enough to support the current workforce,” she said.

The proposed weapons spending budget is $104.3 billion in fiscal 2014, or $21.6 billion less than projected previously; $112.3 billion in fiscal 2015, or $17.2 billion less; $116.3 billion in 2016, or $20.9 billion less; and $122.9 billion in 2017 or $16.8 billion less.

The Office of Management and Budget had previously projected procurement spending through 2017 would be $650.3 billion. The new plan calls for $554.6 billion, or $95.7 billion less, over the period.

--Editors: Larry Liebert, Terry Atlas

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus