A procurement ‘time bomb’ Building U.S. end strength leaves less money for arms By John T. Bennett Defense News February 12, 2007 As Congress begins debating the Pentagon’s $645.6 billion defense spending request for 2008, some former officials and analysts are warning that the president’s plans to swell the military and send additional troops to Iraq will severely limit weapon programs in coming years – especially if the conflict ends and the overall defense budget shrinks. “When [U.S. forces] leave Iraq, supplementals will go away and the defense budget will start to come down, maybe drastically,” one former official said. “And when those things coalesce, industry better be prepared. The Army and Marine Corps [troop] increase is the one time bomb buried in the out years” of President Bush’s 2008 military spending blueprint. The White House in January announced plans to add 92,000 soldiers and Marines over the next eight years, an average of about 12,000 annually. The 2008 request asks lawmakers for $12 billion to start covering the costs, bringing the total personnel request to $116.3 billion. But it remains unclear just how much the Army and Marine Corps will need to spend to pay, train, equip and take medical care of the extra troops. Some analysts say the annual cost will be between $10 billion and $15 billion. Others say estimates are impossible because the cost of health benefits, combat equipment, and other items changes too much from year to year. Some former government officials and defense observers were sounding alarm bells – even if cautionary at this point — about the cost of this permanent, larger fighting force. “Once U.S. forces leave Iraq, baseline budgets will come down and they’re going to start looking for bill payers,” said Gordon Adams, a fellow with the Woodrow Wilson Center in Washington and a Clinton-era official at the White House’s Office of Management and Budget. The biggest targets will be next-generation weapons, especially Air Force and Navy programs, observers say. Senior Air Force officials warned Feb. 5 that the service faces a $20 billion shortfall each year through 2028; the Navy has slowed its future aviation portfolio. In addition to the end strength hike, the president’s plan to send an additional 21,500 troops to Iraq will cost extra as well. The White House is asking for $5.6 billion to cover these costs. But J. Michael Gilmore, the CBO’s assistant director for national security, told the Senate Budget Committee Feb. 6 that the surge actually could cost the nation between $9 billion and $13 billion. The Pentagon has been too tight-lipped about how it arrived at the $5.6 billion figure, Gilmore said. Several former officials last week said the Pentagon’s calculations appear to have omitted the costs of deploying more support personnel to aid the extra 21,500 troops – sometimes referred to as the “logistics tail.” Rosy Few Years The next two years “appear to be very rosy for industry,” with a continuing boom for companies that make items “that directly support the war,” said Phillip Coyle, a former Pentagon director of operational testing and evaluation who is now an analyst for the Washington-based Center for Defense Information. In the short term, industry – from aircraft manufacturers to ground vehicle makers to shipbuilders to smaller companies that sell body armor and generators to the Pentagon – stand over the next several years to keep rolling up profits as the build-up continues. Coyle and others also noted the surge will mean good things financially for companies that offer support services to the military. “They have to take the tail with them, and more and more that’s being done by the private sector,” Coyle said. The 2008 request essentially keeps the U.S. defense giants’ major futuristic programs alive and thriving, while also giving a boost to companies that make items urgently needed for combat, such as body armor, large blast-resistant trucks and even lower-profile things like generators. Former officials and analysts contacted last week agreed the White House’s 2008 Pentagon spending plan features few surprises – the lone exceptions several experts cited were funding reductions for some Air Force-run space initiatives and a reduction in the Missile Defense Agency’s top line. “The main theme of this budget [package] is it’s all about the war, the war, the war,” said Coyle. Because of the nature of the war in Iraq, contractors that supply the military – particularly the ground services – heavy vehicles, body armor and other combat gear is “where industry will see the most profit,” said Coyle. “I mean, if you’re a company working on the Joint Strike Fighter, you’re not going to go broke by any means,” he said, “but that’s just not the department’s top priority.” But “industry better be ready for a tidal wave” that might wipe out the recent procurement binge, the first former official said. Major defense firms “better be positioning themselves for the slowdown” that will likely occur after the 2008 presidential election and the eventual end of the Iraq conflict, said Pierre Chao of the Washington-based Center for Strategic and International Studies. “There is a growing amount of angst over what happens next.” “When more and more of these new programs start to hit the production line,” Chao said, and there are fewer dollars for defense spending, “they could find there’s not enough money for them all.” (Archives)