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02 February 2004

Defense Comptroller Says Budget Decisions Driven By War on Terrorism

Services aim to manage the high demand on forces, equipment

By Jacqui Porth
Washington File Security Affairs Writer

Washington -- Under Secretary of Defense Dov Zakheim says the new $401.7 billion defense budget reflects the fact that "we are still in a war on terrorism."

Speaking to reporters at the Pentagon February 2 as he unveiled the parameters of the new budget for fiscal year 2005, Zakheim said considerable thought has been given to managing the continued high demand on U.S. forces and equipment by the war on terrorism.

The new budget -- for the year beginning October 1 -- calls for a seven percent increase in spending over the current fiscal year. Zakheim, the Pentagon's comptroller, pointed out that the account for military personnel has increased significantly, from $97.9 billion in fiscal 2004 to $104.8 billion in 2005, with continued growth projections through fiscal year 2009. He said doing right by service personnel is a major theme of the budget, and providing force protection is a matter of extreme urgency. The budget calls for a 3.5 percent pay raise for the military and the official said recruitment and retention remain "very good."

Funding for operations and maintenance costs are up from $127.6 billion in 2004 to $140.6 in 2005 and they, too, are projected to grow toward the end of the decade. Spending on research, development, testing and evaluation is another growth area: climbing from $64.3 billion last year to $68.9 billion this year and climbing until 2008.

Besides prosecuting the war on terrorism and managing demand, the proposed budget also looks to improve and integrate intelligence capabilities. While actual figures are not available, Zakheim spoke from a chart indicating funding increases would be used to improve worldwide human intelligence collection and develop and use promising new technologies.

Another theme of the 2005 budget is a continued emphasis on transforming military capabilities to meet more contemporary world threats. This means funding for cruise missiles, unmanned vehicles, advanced ships, heavier armored HUMVEES (High Mobility Multipurpose Wheeled Vehicles), a laser satellite system, a joint tactical radio program, and legislative authority to transfer funds within the budget to help other nations fight terrorism.

The military services are all seeking increases to fund procurement and R&D. The Army has a budget of $95.4 billion in 2004 and now wants $97.2 billion for 2005, an increase of $1.8 billion. The Navy and Marine Corps had a $115.1 billion budget in 2004 and is looking for $119.3 billion in 2005, a $4.2 billion increase. The Air Force had a 2004 budget of $110.9 billion and is seeking $120.5 billion in 2005, a $9.6 percent increase. Even the non-service Department-wide budget is looking to grow from $53.9 billion in 2004 to $64.7 billion in 2005, a $10.8 billion increase.

The Navy is focusing on shipbuilding as it plans to take delivery of three Arleigh Burke destroyers, one Seawolf-class submarine, one Los Angeles Fast Attack Submarine and four Spruance-class destroyers in 2005. The five year projection for Navy ships is 290 in 2005, 290 in 2006, 298 in 2007, 303 in 2008, and 309 in 2009.

Zakheim particularly praised the military Commanders Emergency Response Program (CERP) that helps fund urgent humanitarian and reconstruction requirements in Iraq and Afghanistan as the "single, most successful program in Iraq today." Using money seized from former Iraqi regime elements and congressionally approved transfers, he said it funds health and educations programs, promotes irrigation and food distribution and fixes broken electrical grids -- all in an effort to eliminate the middle man and fix problems swiftly.

In a January 30 background briefing on this subject, a senior defense official said neighborhood projects in Iraq such as sanitation are effective in winning friends and easing friction for coalition forces. If clean up efforts are not prompt, he warned, people are likely to switch sides and allegiances. Asked about a role for the Agency for International Development, the official said AID tends to focus on larger, more time-consuming projects but often doesn't have the ability to move fast enough in ways that the military can.

The 2005 budget provides for continued development of a multi-tiered defense against intercontinental ballistic missiles. The Missile Defense Agency (MDA) is asking for $9.2 billion this year, up from $7.7 billion last year. MDA's budget submission indicates that international participation has become a major priority for the program.

An MDA release says "we will strive to structure our programs to promote cooperation and ... seek to take advantage of allies' capabilities to enhance the BMDS (Ballistic Missile Defense System)." It also says that investments will sustain cooperative R&D programs with Israel by continuing support for the Arrow anti-missile program and for Japan's work to improve the Standard Missile 3. There are plans to upgrade the early warning radar at Fylingdales in the United Kingdom and to investigate other unnamed British R&D projects. MDA is also looking for international cooperation for the Kinetic Energy Interceptor and is awaiting the conclusions of a NATO Feasibility Study on missile defense.

MDA also announced plans to terminate the Russian-American Observation Satellite (RAMOS) program with the 2005 budget. While still expressing interest in cooperative efforts with the Russian Federation, the MDA suggested the money (around $550 million) could be better spent on missile defense cooperation projects with Russia.

Some of the other highlights of the defense budget request include:

-- increased spending for maritime prepositioning;
-- added R&D money for defenses against MANPADS (Man-Portable Air Defense Systems);
-- increased money for the Chemical and Biological Defense Program;
-- new money to explore anti-personnel landmine alternatives and to fund humanitarian demining;
-- more funds for handheld standoff minefield detection and explosive ordnance disposal equipment;
-- increased funding for international headquarters and agencies, including R&D money for NATO;
-- additional money for technologies to defend against weapons of mass destruction;
-- more money for global command, control, communications and intelligence and early warning;
-- more funds for servicewide arms control activities;
-- a bigger budget for the Defense Threat Reduction Agency;
-- more money for the National Defense University;
-- a larger request for the Special Operations Command; and
-- greater appropriations for overseas contingency operations.

On the procurement side more money is being sought for:

-- 1,026 Guided Multiple Launch Rocket Systems (up from 786);
-- 37 High Mobility Artillery Rocket Systems (HIMARS) (up from 24);
-- another Virginia-class submarine;
-- 97 lightweight towed 155mm howitzers for the Navy (up from 60);
-- two more F-22 Raptor combat aircraft;
-- three more C-17A tactical airlift aircraft;
-- many more Joint Direct Attack Munitions (from 20,244 to 23,137).

Spending on equipment associated with psychological operations has declined to $18.4 million from a recent peak last year of $33.2 million.

Slides associated with the annual defense budget briefing may be viewed on the Web at http://www.defenselink.mil/news/Feb2004/g040202-D-6570C.html

All slides in a single PDF file. (.pdf 380 KB)