Panetta Said Ready to Release First Budget Numbers Jan. 26

January 11th, 2012

(Updates with budget request schedule and numbers beginning in second paragraph.)

Jan. 11 (Bloomberg) — Defense Secretary Leon Panetta is scheduled Jan. 26 to release the first details of the Obama administration’s fiscal 2013 defense budget, according to a U.S. defense official.

The date might change and the venue and level of detail haven’t been settled, said the official, speaking on condition of anonymity in advancement of an announcement. The entire Pentagon budget, along with the rest of the administration’s federal spending blueprint, is due to be released Feb. 6 and sent to Congress.

Defense spending in 2013 would be reduced 1 percent from this year’s initial $525.3 billion request before growing annually 1.8 percent in 2014, 2.3 percent in 2015, dropping to 1.9 percent in 2016 and increasing 2.2 percent in 2017, according to a Nov. 29 Office of Management and Budget document.

The administration plans $82.54 billion in funding for the Afghanistan and Iraq wars for 2013, according to OMB.

The basic defense-only “topline” numbers are currently projected at: $523.8 billion in 2013; $533.0 billion in 2014; $545.5 billion in 2015; $555.9 billion in 2016 and $567.9 billion in 2017, according to OMB.

The percentage increases are expressed in “nominal growth,” not adjusted for inflation. The OMB numbers apply only to Pentagon spending and not to non-Defense Department security agencies such the Energy Department, which maintains the nation’s nuclear weapons.

The 2012-2021 defense plan calls for $5.652 trillion in spending. OMB calculated that the total Budget Control Act- mandated defense cut over those years is $488 billion — or about an 8.5 percent total decrease.

The OMB data outlined the distribution of the initial $261 billion in reductions mandated by the Budget Control Act: $27.5 billion in fiscal 2012; $46.8 billion in fiscal 2013; $53.3 billion in 2014; $52.7 billion in 2015; $54.6 billion in 2016 and $53.5 billion in 2017.

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Will Obama’s ‘leaner’ military plan be felt on Brevard’s bases?

January 6th, 2012

The U.S. will have a “smaller and leaner” military force as outlined by President Barack Obama’s strategy announced Thursday to cut defense spending.

Until more details emerge and Congress addresses the issues in the coming months, it’s uncertain exactly how the Space Coast will be affected. However, financial analysts are optimistic about the future for defense contractors like Harris Corp., Brevard County’s largest employer.

In addition, because of the emphasis that would be placed on intelligence gathering, surveillance and communication, Patrick Air Force Base and Cape Canaveral Air Force Station — where military satellites are launched — are expected to see a positive impact.

“I would say that the intelligence, reconnaissance and surveillance are areas less likely to be cut back,” said Lawrence Harris, a financial analyst with CL King Associates.

Harris, who has no connection to the company of same name that employs 6,500 on the Space Coast, said that although the details and how Congress will respond are unknown, he sees no adverse effect for Harris Corp. or the county. Existing contracts with the Department of Defense, such as for mapping and software development, should remain intact.

“I don’t think that’s going to change significantly,” Harris said.

The new defense strategy outlined by Obama includes $487 billion in cuts during the next decade. An additional $500 billion in cuts could be coming if Congress follows through with plans for deeper reductions. The announcement comes weeks after the U.S. officially ended the Iraq War and after a decade of increased defense spending in the aftermath of the Sept. 11 attacks.

Sen. Bill Nelson, D-Orlando, said large standing armies in Europe are not needed anymore and that the president wants to focus on capabilities of quick-strike forces. He said that under the proposal, the United States may not be able to fight two sustained wars at the same time, but could build up the forces if necessary.

Nelson said that while cuts will have to be across the board, he does not see any negative impact on the Space Coast.

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Defense Secretary Panetta faces tough choices on national security in 2012

January 2nd, 2012

When it comes to national security issues in 2012, the person who faces the toughest choices is Defense Secretary Leon E. Panetta.

Look at what’s on his plate: the Pentagon’s budget crunch, the war in Afghanistan, the postwar period in Iraq, Iran’s nuclear ambitions, Israeli issues, U.S.-Pakistan relations, China’s growing military and the biggest challenge of all — Congress.

Hovering over him like a cloud is the presidential campaign. A chorus of Republican candidates, as Mitt Romney already has done, will almost certainly take issue with the Obama administration’s defense policies and spending levels. While the economy will be central to the campaign debate, defense will be a close second.

The budget crunch goes far beyond numbers. This week, the Pentagon will produce a revised defense strategy that will provide the basis for the fiscal 2013 Defense Department budget. The numbers themselves will come later this month as part of President Obama’s budget and will reflect the second year of a 10-year plan to cut $489 billion in defense spending, made in response to August’s Budget Control Act.

It remains to be seen what further defense reductions will be made as Congress wrestles with the “sequestration” requirement in the August statute — across-the-board budget cuts of more than $1 trillion over 10 years, half of which are to come from national security spending. These cuts were triggered by the failure last fall of the congressional “supercommittee” to come up with a deficit-reduction plan.

In a Nov. 14 letter to Sens. John McCain (R-Ariz.) and Lindsey O. Graham (R-S.C.), Panetta wrote that the Budget Control Act cuts “are difficult and will require us to take some risks, but they are manageable.” Further cuts under sequestration, he said, “would tie [the Defense Department’s] hands.” For instance, he said that across-the-board reductions would have to be applied equally to major construction programs, rendering “most of our ship and construction projects ‘unexecutable’ — you cannot buy three quarters of a ship or a building — and seriously damage our modernization efforts.”

Panetta has proposed that, if additional cuts are required, the Pentagon be allowed to pick and choose where they are made and not have to apply them across the board.

To reach the initial $489 billion in cuts, Panetta will have to defend before Congress the expected reductions in personnel for fiscal 2013, as well as the scaling back or ending of some weapons programs. All of these have their constituents inside and outside government — and especially on Capitol Hill.

How many F-35s do you buy; should you choose manned or unmanned weapons systems; how many nuclear supercarriers do you need; do you modernize all three legs of the nuclear triad — strategic bombers, land-based intercontinental ballistic missiles and strategic submarines? While dealing with these questions, Panetta must also protect money for operations, maintenance, and research and development, the favorite areas for congressional budget cutters.

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Challenging the Navy’s numbers

December 29th, 2011

Challenging the Navy’s numbers

Challenging the Navy’s numbers


Zachary S. Welch/AP – The USS Gerald R. Ford, known in Navy terms as CVN-78, will be the lead ship of six in a new generation of aircraft carriers scheduled to be built during the next 40 years.The USS Abraham Lincoln, known as CVN-72, is one of the previous Nimitz class of carriers.

Since the Defense Department faces the need to reduce expenditures, here is one suggested new year’s resolution: Make the military services have a mandatory 80 percent confidence level in their estimated costs of a new weapons systems before major funding is approved.

What is a “confidence level?” the average taxpayer might ask. It is something the services have been doing for years but without much publicity. It is the percentage guesstimate by which the military service believes the cost it puts forward for a new, major acquisition will actually hit that figure.

Believe it or not, the services over the past decade have known that their original weapons systems estimates have a 50 percent chance or less of hitting that goal, which is why there are almost always cost overruns.

Here is another proposed resolution for the military: Take a second look at how many new-generation, high-tech ships, planes or vehicles are really needed given the threats to this country.

The Army’s multi-billion-dollar Future Combat System was reduced to several major components; the Air Force’s F-22 was sharply cut and plans are to reduce the original purchase of the F-35. So now is the time to look at the Navy’s new generation of costly nuclear aircraft carriers and their proposed numbers.

The USS Gerald R. Ford, known in Navy terms as CVN-78, will be the lead ship of six in a new generation of nuclear carriers scheduled to be built during the next 40 years under the Navy’s 2012 shipbuilding program. The Ford is about 25 percent completed and is expected to join the fleet in 2015.

The Navy budgeted CVN-78 “to the 40th percentile of possible cost outcomes,” according to former representative Joe Sestak (D-Pa.), who should know because he was at one time a vice admiral whose last major post was as deputy chief of Naval Operations for Warfare Requirements and Programs. Sestak further explained that the 40 percent confidence level meant “there is a 60 percent probability that the final cost of the CVN-78 will exceed the service’s estimate,” something he had written in an article in the Pittsburgh Post-Gazette in August.

Sestak, it should be noted, was removed from his policy post in 2005 because he pushed for budget cuts and further ruffled feathers in the Navy by calling for fewer ships, but more about that later.

There have long been complaints about the Navy’s failure to recognize the eventual cost of its ships. The Government Accountability Office pointed out in 2007 and again in 2008 that “the Navy tends to underestimate the costs needed to construct ships, resulting in unrealistic budgets and large cost increases after ship construction has begun.”

In 2008, the Navy projected $3.3 billion in research and development costs and $10.5 billion for procurement of CVN-78. The Congressional Budget Office put the procurement figure at $11.2 billion, while the GAO a year earlier said the “shipbuilder’s initial cost estimate for construction was 22 percent higher than the Navy’s cost target . . . [and] the actual costs to build the ship will likely increase above the Navy’s target.”

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Rise of the drone: From Calif. garage to multibillion-dollar defense industry

December 23rd, 2011

Lake Forest, Calif. — In 1980, Abraham Karem, an engineer who had emigrated from Israel, retreated into his three-car garage in Hacienda Heights outside Los Angeles and, to the bemusement of his tolerant wife, began to build an aircraft.

The work eventually spilled into the guest room, and when Karem finished more than a year later, he wheeled into his driveway an odd, cigar-shaped craft that was destined to change the way the United States wages war.

The Albatross, as it was called, was transported to the Dugway Proving Ground in Utah, where it demonstrated the ability to stay aloft safely for up to 56 hours — a very, very long time in what was then the crash-prone world of drones.

Three iterations and more than a decade of development later, Karem’s modest-looking drone became the Predator, the lethal, remotely piloted machine that can circle above the enemy for nearly a day before controllers thousands of miles away in the southwestern United States launch Hellfire missiles toward targets they are watching on video screens.

The emergence of hunter-killer and surveillance drones as revolutionary new weapons in the wars in Iraq and Afghanistan, and in counterterrorism operations in places such as Pakistan and Yemen, has spawned a multibillion-dollar industry, much of it centered in Southern California, once the engine of Cold War military aviation.

Over the next 10 years, the Pentagon plans to purchase more than 700 medium- and large-size drones at a cost of nearly $40 billion, according to a Congressional Budget Office study. Thousands more mini-drones will be fitted in the backpacks of soldiers so they can hand-launch them in minutes to look over the next hill or dive-bomb opposing forces.

This booming sector has its roots in the often unsung persistence of engineering dreamers who worked on the technology of unmanned aviation when the military establishment and most major defense contractors had little or no interest in it. Innovators such as Karem were often sustained by grants from the Defense Advanced Research Projects Agency (DARPA) and a handful of early believers, including the CIA.

Karem said he imagined his drones involved in a “tactical conflict with the Warsaw Pact, be it on the plains of Germany or as part of our Navy and Marines.” He had to sell his company, and with it the prototype of the Predator, long before it became the icon of a new kind of warfare.

“I did not envision the collapse of the Soviet Union and the rise of warfare with non-state adversaries,” said Karem, an aeronautical engineer who served for nine years in the Israeli air force before settling in the United States in 1977.

In the past decade, drones have become an integral part of U.S. military doctrine — so much so that it is difficult to recall how marginal they once seemed. The military had less than 200 drones the day before the attacks of Sept. 11, 2001; today it has more than 7,000, including mini-drones.

Before Sept. 11, drones weren’t “on the road map,” said Tim Conver, chairman and chief executive of AeroVironment, which builds close-in surveillance drones for the military. “It wasn’t something that [the Defense Department] had said: ‘We need this. Let’s build a program around this.’ ”

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The GOP’s Payroll Tax Fiasco

December 22nd, 2011

GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest.

The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play.

Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he’s spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible.

Steve Moore on the House GOP scuttling the Senate’s payroll tax cut extension.
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Standoff as House Rejects Tax Bill
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House Republicans yesterday voted down the Senate’s two-month extension of the two-percentage-point payroll tax holiday to 4.2% from 6.2%. They say the short extension makes no economic sense, but then neither does a one-year extension. No employer is going to hire a worker based on such a small and temporary decrease in employment costs, as this year’s tax holiday has demonstrated. The entire exercise is political, but Republicans have thoroughly botched the politics.

Their first mistake was adopting the President’s language that he is proposing a tax cut rather than calling it a temporary tax holiday. People will understand the difference—and discount the benefit.

Republicans also failed to put together a unified House and Senate strategy. The House passed a one-year extension last week that included spending cuts to offset the $120 billion or so in lost revenue, such as a one-year freeze on raises for federal employees. Then Mr. McConnell agreed with Senate Majority Leader Harry Reid on the two-month extension financed by higher fees on Fannie Mae and Freddie Mac (meaning on mortgage borrowers), among other things. It passed with 89 votes and all but seven Republicans.

Senate Republicans say Mr. Boehner had signed off on the two-month extension, but House Members revolted over the weekend and so the Speaker flipped within 24 hours. Mr. Boehner is now demanding that Mr. Reid name conferees for a House-Senate conference on the payroll tax bills. But Mr. Reid and the White House are having too much fun blaming Republicans for “raising taxes on the middle class” as of January 1. Don’t be surprised if they stretch this out to the State of the Union, when Mr. Obama will have a national audience to capture the tax issue.

If Republicans didn’t want to extend the payroll tax cut on the merits, then they should have put together a strategy and the arguments for defeating it and explained why.

But if they knew they would eventually pass it, as most of them surely believed, then they had one of two choices. Either pass it quickly and at least take some political credit for it.

Or agree on a strategy to get something in return for passing it, which would mean focusing on a couple of popular policies that would put Mr. Obama and Democrats on the political spot. They finally did that last week by attaching a provision that requires Mr. Obama to make a decision on the Keystone XL pipeline within 60 days, and the President grumbled but has agreed to sign it.

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Senate Minority Leader Mitch McConnell speaks at a news conference as House Speaker John Boehner listens.
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But now Republicans are drowning out that victory in the sounds of their circular firing squad. Already four GOP Senators have rejected the House position, and the political rout will only get worse.

One reason for the revolt of House backbenchers is the accumulated frustration over a year of political disappointment. Their high point was the Paul Ryan budget in the spring that set the terms of debate and forced Mr. Obama to adopt at least the rhetoric of budget reform and spending cuts.

But then Messrs. Boehner and McConnell were gulled into going behind closed doors with the President, who dragged out negotiations and later emerged to sandbag them with his blame-the-GOP and soak-the-rich re-election strategy. Any difference between the parties on taxes and spending has been blurred in the interim.

After a year of the tea party House, Mr. Obama and Senate Democrats have had to make no major policy concessions beyond extending the Bush tax rates for two years. Mr. Obama is in a stronger re-election position today than he was a year ago, and the chances of Mr. McConnell becoming Majority Leader in 2013 are declining.

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At this stage, Republicans would do best to cut their losses and find a way to extend the payroll holiday quickly. Then go home and return in January with a united House-Senate strategy that forces Democrats to make specific policy choices that highlight the differences between the parties on spending, taxes and regulation. Wisconsin freshman Senator Ron Johnson has been floating a useful agenda for such a strategy. The alternative is more chaotic retreat and the return of all-Democratic rule.

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Defeat the McCaskill /Toomey Bill Banning Earmarks

December 18th, 2011

Senators Claire McCaskill (D-MO) and Patrick Toomey (R-PA) announced they will introduce a bill that would ban earmarks by law. This is just another example of congresspersons doing something for publicity’s sake and not to promote good government.

Earmarks are not inherently bad and they usually don’t cost taxpayers additional money. In most instances, the earmark is for funds that are approved for a particular agency and if the Congress doesn’t tell the agency how to spend some of the approved funds, the agency will spend it on something they want. Doing away with earmarks is giving authority on all funds appropriated by Congress to the Executive Branch; it is not saving money. I agree with Congresswoman Doris Matsui (D-CA) when she says, “I think members of Congress know their districts pretty well and know what they need.” “By banning [earmarks] entirely, we are giving all the power to the administration. I don’t care if it’s a Democrat or a Republican in the White House, they should not have that power.”

Are there absurd earmarks? Of course there are! Are there absurd programs funded by federal agencies without the funds being earmarked? Of course there are! But there are also some really important earmarks which are placed in an appropriations bill because if they aren’t their agencies have little opportunity/incentive to fund the specific project.

We should reform the earmark process, not eliminate it and pander to those who have used its demise for political propaganda. There are a number of ways to reform it. One would be for each congressperson who requests an earmark to not only attach his/her name to it but to have to report it online. If the earmark is for a congressperson’s own district, they would have to ask for quarterly reports from the earmark recipient and then be required to post those online. That way their constituents, and anyone else, would see who is receiving an earmark, what it is for, who the congressperson is responding too and they can then decide if they feel that the project funded was worthwhile.

There are also earmarks which fund more national projects. These should be placed online by the committee in whose bill they were included and the quarterly reports would be requested by the committee and posted. Each recipient of an earmark in addition to having to file a report with the agency from which the funds came would be required to file a report with the congressperson who asked for the earmark and/or the committee in whose bill it was placed.

There are many ways to make the process more open and effective but killing earmarks because it is momentarily feel good politics isn’t the way to go. Senators McCaskill and Toomey should find better things to do with their time. I am sure the residents of Missouri and Pennsylvania would rather they focus on a jobs bill and on making sure that as the economy begins to improve it impacts them rather than being pandered to with this side issue.

For years we have seen presidents of both parties running for reelection traveling the country awarding special grants to states and communities for all kinds of things to win votes. They use the money Congress has appropriated and if there were an earmark on some of the money there would simply be a little less for Presidents to dole out on their own. I opposed President Obama when he came out against earmarks but I understood it. It was good politics and gave him more money to spread around on his own. He should thank John McCain (R-AZ) for that as he was the person that kept raising the issue in the last election but didn’t explain to the American people the real story about how the $30 billion allocated to earmarks would still be spent if those earmarks were eliminated. There was never a push by McCain, other members of Congress, or the president to rescind the $30 billion in earmarked money included in the spending authority for the agencies once they weren’t told how to spend it. They simply got to spend it anyway they wanted.

The American people deserve the truth about earmarks and I urge the other members of Congress to defeat the McCaskill/Toomey bill.

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Editorial: Well-grounded approach

December 17th, 2011

City of Hampton is on the right track in mapping its Langley retention strategy

December 17, 2011

For almost a century, Langley Air Force Base has been a part of the Peninsula landscape, contributing billions of dollars to the area economy and providing employment for generations of military families.

But despite the long history of military installations in Hampton Roads and Langley’s seemingly ideal location by the sea, assuming that it will be here in perpetuity is shortsighted.

Just ask the city of Virginia Beach.

Just a few years ago, our southside neighbor was shocked to learn its Naval Air Station Oceana was on the Department of Defense’s Base Realignment and Closure list because the site did not have the flexibility needed for ongoing operations. Development around the base had become too close for military comfort. Determined to keep Oceana open, the city undertook long-term systematic efforts to address encroachments around the base and make it more attractive to the Navy.

In order to meet military requirements, Virginia Beach sought and obtained $7.5 million in annual state matching funds and agreed to spend up to $15 million annually to acquire land in the “clear zone” immediately adjacent to the base and rezone or acquire land in the “accident potential” zone just beyond the clear zone. Virginia Beach was so successful in its land acquisition process– just last month, it purchased 800 acres of private farmland and woods – that Oceana no longer faces imminent closure.

While the land around Langley doesn’t include as many development encroachments as Virginia Beach had to address, it too faces the likelihood of another salvo of closures by an infrastructure-heavy Air Force. With so much at stake, Hampton and its neighbors must be as proactive as possible in preserving the base.

In 2008, nearly 26,000 depended on Langley for support while the base contributed to another 6,577 indirect jobs to the region. Its annual economic impact is nearly $1.3 billion, with just over half of that representing payroll of military and civilian personnel. About one third is spent on local services, materials, equipment and supplies.

Fortunately, Hampton is moving in the right direction. In 2010, the city and neighboring localities finalized a Joint Land Use Study that included recommendations for acquiring and managing the land surrounding the 2,833-acre base.

In the latest step, the city has announced it will seek $6 million from the state in 2012 to start the acquisition process. The city will contribute another $6 million. Because Langley is important not only to the economic health of our region but that of our state, as well, the funding partnership only makes sense.

Over the next few years, the plan is for Hampton to purchase 19 parcels of private property in the clear zone identified as incompatible. Because local governments in Virginia lack powers of eminent domain, land in the clear zone – property that must be free of all future development – will have to be acquired from willing sellers. With today’s depressed real estate market, the city might just find an unexpected percentage of not only willing but eager sellers.

Hampton will also begin taking steps to rezone some of the affected property in the accident potential zone to reduce density and meet other compatibility requirements.

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Travis supporters map out goals for 2012

November 18th, 2011

FAIRFIELD — Recent cuts to Travis Air Force Base manpower and the possibility of more military cuts to come has the Travis Community Consortium looking forward to 2012 as a year when it pushes as hard as possible to keep the base and its missions intact.

The Consortium, an alliance of local governments, spent its last meeting of 2011 Tuesday examining a strategy to preserve current base missions, strengthen base joint ventures with organizations such as UC Davis, seek green programs to reduce base energy consumption and make Travis as attractive as possible for new missions.

Madison Government Affairs, the Consortium’s advising lobbyist, pointed out that while Travis Air Force Base has already taken a hit, it was not a big one.

Early this month, the Air Force announced the base was eliminating 58 civilian positions and 35 active-duty positions, mainly from support services on base.

There are also plans to inactivate the 15th Expeditionary Mobility Task Force headquarters and the 615th Contingency Response Wing headquarters in 2012.

This was part of an Air Force-wide move to eliminate approximately 9,000 positions throughout the service while adding 5,900 positions in areas it considers high priorities. Air Mobility Command’s portion of the cuts was 657 civilian positions.

The recent failure of Congress budget supercommittee to reach an agreement means the Department of Defense faces $600 billion in cuts over the next 10 years.

Madison representatives pointed out while this is a time of great angst, it’s also a time of great opportunity for the base and its supporters.

There is $22 million in the President’s 2012 budget to build a 144-room dormitory on base, which has so far sailed smoothly through the federal budget process.

The Air Force is also looking to replace 179 of its aging KC-135 air tankers with Boeing KC-46 air tankers.

Given the availability of ramp space at Travis, Madison representatives noted that if the Consortium did the same lobbying it did to get the C-17 at Travis, some of the KC-46s may find a home at Travis.

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Local Elected officials disturbed with cuts in community development…

November 18th, 2011

WASHINGTON, DC. – Local government officials today are baffled by the short-sighted decision of Congress to cut the Community Development Block Grant (CDBG) program as part of the Minibus Appropriations bill.

CDBG is the largest federal program dedicated to supporting the economic development and job creation activities of cities, counties and states in thousands of communities across the nation.

CDBG creates jobs, leverages private investment for economic development, supports home-ownership, builds critical infrastructure, including energy efficient improvements. It also provides critical social services to communities based on their distinct local needs while also assisting cities and counties in planning for community and economic revitalization.

The nation is facing dire fiscal pressure related to ongoing issues of home foreclosures, rising unemployment, and a loss of confidence in our federal lawmakers who cannot agree on a plan of action that will turn this economy around. Now is surely not the time to for Congress to send the message that funding in support of neighborhoods and family economic stability is not a top priority.

With over 85 percent of people in this country living in cities and metropolitan areas, we know that as go cities and counties, so goes the nation.

In the last year, local government officials have repeatedly traveled to Washington to explain to Members of Congress the impact of the CDBG program in communities all across this country.

We will not rest until the CDBG funding is restored.

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