Rebalancing – with more change on the way

There are good and bad things in this US DoD’s Fiscal 2010 budget proposals.  President Obama and the US DoD recognise – unlike Prime Minister Rudd – that there are limits to the size of the country’s coffers for military expenditure, despite the fact that the war in Afghanistan is rapidly replacing the one in Iraq and is escalating very rapidly.  As a result, the defence budget is carefully “tethered,” with Congress and the forthcoming Quadrennial Review yet to affect it.  This report primarily addresses military hardware that has been proposed by each of the services, and not the politics. 

The Fiscal 2010 budget asks for $663.8b, with $533.8b for the basic peace-time budget, plus $130b for Iraq and Afghanistan operations, as the Obama administration carries through with a promise to include war funding in the regular budget, rather than bury it as a “supplemental” as was the previous Administration’s practice. 

In an introduction to the Budget announcement, Defense Secretary Robert Gates said the budget “…provides the balance necessary to institutionally finance our capabilities to fight the wars we are in today and the scenarios we are most likely to face in the years ahead, while at the same time providing a hedge against other risks and contingencies.”

The official unveiling of the first Obama defense budget also launched a familiar fight with Congress over some key personnel programs, issues and unacceptable omissions of the Bush Administration regarding the welfare of service people – something that Obama pledged to eliminate. 
For example, the Budget recognises:-

• A 2.9% pay rise for active and reserve forces – an amount already rejected by the House and Senate Armed Services Committees, who have indicated they will provide a 3.4% raise for troops, effective 1 January 2010.
• An average 6% increase in the basic allowance for housing and a 5% increase in the basic subsistence allowance. 
• $47b for military health care and requests no fee increases.  However, the Defense Department statement on the budget says Defense officials expect “…to continue to work with the Congress to look for ways to slow the growth of medical costs while continuing to provide high-quality care.”
• A 2% pay rise for Defense civilians under the proposal.  Although key members of Congress representing congressional districts with large numbers of federal civilians have already vowed to provide civilians the same 2010 raise that will go to the military.

Rep. Ike Skelton, D-Mo., the House Armed Services Committee chairman, said in a statement that his panel is “…anxious to examine…” the budget.  “In the current economic climate, it is more important than ever to ensure that each defense dollar is spent wisely and effectively.  While many difficult budget and policy decisions are ahead of us, I believe the $533.8 billion requested for defense is a reasonable level which will allow us to support our troops and keep America safe.”

Defense officials say that the changes are part of an effort to have a realistic budget when considering the cost and production times for weapons systems, and to cancel programs that are either far over budget or providing limited new capabilities.

Overview

For Fiscal 2010, the US Defense Department released its $664b spending proposal that is focused on positioning the US military so that it is better placed for conducting irregular warfare, to revamp the way the Pentagon buys weapons, and to provide adequate funding for military personnel and their families.  The basis of the proposal also clearly draws from the experience of the Iraq campaign and the increasingly difficult problems in Afghanistan. 

The request includes both the $534b base budget and a $130b package to fund the war in Afghanistan and the continuing Iraq stabilisation process. 
The base budget represents an increase of $20.5b (or 2.1% in real growth) over the $513.3b enacted in Fiscal 2009. 
By service, the proposal covers:-

• $156.4b for the Navy in the base request;
• $144.5b for the Air Force (including $115.6b for Air Force-specific needs);
• $142.1b for the Army; and
• $ 90.8b for the Defense Agency.

By category, the base request includes:-

• $136.0b for military personnel (up 8.9% over 2009);
• $185.7b for operations and maintenance (up 3.7%);
• $107.4b for procurement (up 5.6%);
• $78.6b for research, development, test, and evaluation (down 1.1%); and
• $21b for military construction (down 4.1%). 

Among the highlights, the base budget adds nearly $2b to bolster intelligence-surveillance-reconnaissance capability, increases Army and Marine Corps strength, whilst also halting Air Force and Navy draw-downs. 

Service Programs

Overview

From a hardware perspective, the Budget cancels the Presidential Helicopter program; buys 30 F-35s (including ten for the Air Force), limits Army brigade combat teams to 45, reduces missile defense spending by $1.2b, delays the Navy’s next-generation cruiser, restructures the Army’s future combat systems, adds 2,400 personnel to the ranks of special operations forces, a 4% increase and seeks to grow DoD’s acquisition workforce by 20,000 by 2015 (to reduce dependence on support service contractors). 

The Navy

The Navy is required by Congress to include a 30-year shipbuilding plan with each year’s budget, and this year it also was told to submit a 30-year aviation plan.  But neither document accompanied the budget the Navy sent to Congress.  Other than information about the ships and aircraft it wants to buy in the fiscal year that begins 1st October, there were not many new details about the Navy’s long-term plans included in the budget rollout, as it argued that it would be inappropriate to discuss a shipbuilding plan at this time.  The Navy also did not include a future-years defense plan as a part of this year’s budget, although that has been common for the first defense budget submitted in a new presidential administration.

The Navy appears to be backing off its oft-stated goal of building a fleet of at least 313 ships.  Instead, a Navy budget official said 7th May, the goal could change as part of the upcoming Quadrennial Defense Review [QDR].  In support of that statement, Rear Adm. T.J. Blake said everything about the United States defense posture was subject to change in the QDR.  “One of the significant elements of the QDR is force structure, so that would be a discussion as to what is the right force structure, and that’s a part of the discussion that’s going to take place this Summer.”  Likewise, Blake would not discuss how or when the Navy could buy aircraft to address its fighter gap – a time when officials worry that the F/A-18 Hornet aircraft could wear out before their replacement F-35 Lightning II comes online – because that, too, would be included in the QDR.

But for now the Navy’s official goal for a fleet of at least 313 ships remains, as that number came from analysis of the 2006 QDR and it would be inappropriate to argue against that case pending the findings of a new QDR.

The Navy is asking for $156.4b overall in Fiscal 2010 and is expecting $15.3b from the supplemental request sent to Congress earlier this (US) Spring, making a total base request of $171.7b.  That amount is $7.9b more than total funding in Fiscal 2009.

Of the above amount, the Navy wants to spend:-

• $44.3b on personnel;
• $44.8b on procurement, to buy eight ships, 203 aircraft and 2,476 missiles, torpedoes and other munitions;
• $42.9b on operations;
• $5.1b on infrastructure; and
• $19.3b on research and development that would include:-
  • the development of a new class of ballistic-missile submarine to replace the Ohio class;
  • continue research and development into its Zumwalt-class destroyers, although construction of the first one has already begun.  Included in this sector is $538m set aside for Zumwalt R&D that would also include research into the long range attack projectile – the new round the Zumwalt class is planned to fire from the advanced gun system – and testing of the tumble-home hull form. 

The Navy also wants to increase funding for depot-level maintenance for ships by $800m and part of that funding will go to the Navy’s new Surface Ship Life Cycle Management Activity, created in response to readiness problems in the surface force, and also following a year in which five ships and one submarine were deemed “unfit.”  That funding accounts for 96% of the maintenance the Navy projects ships will need for the fiscal year.

Shipbuilding

The $44.8b budget includes plans to build eight ships, as follows:-

• 1 Arleigh Burke-class destroyer, Flight 2 or 2A;
• 3 Littoral Combat Ships (the winner of a competition between Lockheed Martin and General Dynamics will be awarded two; the loser, one);
• 2 Lewis and Clark-class dry cargo and ammunition ships;
• 1 Virginia-class fast-attack submarine;
• 1 Joint High Speed Vessel (for Army).

The service also plans to ask for funding to pay for continuation of committed programs, including the second half of the Zumwalt-class DDG 1002; the third increment of funding for the carrier, Gerald R. Ford, and the second increment of funding for the refuelling and complex overhaul of the nuclear-powered carrier, USS Theodore Roosevelt, scheduled for September.

During the fiscal year, three destroyers, an attack submarine and an ammunition ship will join the fleet, and two attack subs, a frigate, an ammunition ship and an auxiliary fleet support ship will be decommissioned.

Aviation

The total aircraft budget proposal is $18.4b, up from last year’s budget of $14.1b.  Included are:-

• 9 F/A-18E/F Super Hornets;
• 2 E-2D Advanced Hawkeyes;
• 27 MH-60R helicopters;
• 18 MH-60S helicopters;
• 38 T-6A/B Joint Primary Pilot Trainers;
• 16 F-35B Joint Strike Fighters for the Marine Corps;
• 4 F-35C Joint Strike Fighters for the Navy;
• 6 P-8A Poseidons (there are strong rumours that this program will be severely cut);
• 1 C-40A Clipper cargo plane;
• 8 MQ-8B Fire Scout unmanned aerial vehicles.

Other Acquisition highlights

In addition to shipbuilding and aviation plans, the Navy budget includes requests for the following:-

• 325 advanced precision kill weapons system [APKWS] missiles.  APKWS is a 70mm rocket launched from a helicopter against “…soft or lightly armoured targets.”
• 24 Trident II D5 submarine-launched ballistic missiles.  Ohio-class ballistic missile subs have 24 tubes and each missile packs multiple nuclear warheads.  The cost will be just more than $1.0b.
• $495m for research and development of the nuclear propulsion plant and missile compartment on the ballistic missile submarine that will replace the Ohio class and expected to join the fleet in 2020.
• Upgrades for Camp Lemonier, the US military base in Djibouti, including $8.1m for security fences, $21.7m for an ammunition supply point, $4.8m for a firehouse and $7.3m for road paving.
• $46.3m for channel dredging in Mayport, Fla., and $29.7m to repair the Charlie Wharf pier, former home of the carrier, USS John F. Kennedy.
• $284.2m for research and development of the Next Generation Enterprise Network, the replacement for the Navy-Marine Corps Intranet.

The Air Force

$115.6b is being sought for the Air Force in its Fiscal 2010 baseline defence spending request, and an additional $16b next year to cover the US Air Force’s [USAFs] operations in Afghanistan and Iraq.  Combined, this $131.6b budget is $3b less than the service’s baseline funds and war supplemental monies appropriated in Fiscal 2009. 

But, if the USAF factors in defense-wide activities that are funded from USAF accounts, the service’s proposal rises to $160.5b. 

Maj. Gen. Larry Spencer, the USAF’s budget czar, reportedly said that the spending proposal represents a “balance and rebalance” of the service’s priorities.  Of great significance, this budget now focuses on maintaining current systems rather than just transitioning to new ones.  Notably, about one-fifth of the $21.7b requested for procurement would go toward systems upgrades, not taking into account significant modernisation cuts. 

A number of programs have been cancelled, deferred or funds reduced, including:-

• TSAT communications satellite;
• CSAR-X rescue helicopter program;
• Termination of funding of F-22s at 187 and C-17s at 205;
• $4.9b for infrastructure ($0.8b less).

On the upside, the request includes:-

• $39.5b for personnel (up $2.1b from 2009), to provide an active duty strength of 331,700 and  “adequate” funding to sustain readiness;
• $30.8b for readiness ($0.2b more);
• $40.4b for modernisation, including procurement ($0.4b more), including:-
  • 81 fixed-wing aircraft, both manned and unmanned,
  • two modified Army helicopters,
  • one communications satellite,
  • one space-based early warning payload,
  • five space launch vehicles,
  • 7,139 missiles and bombs.

Budget Impact

Overall, the plan is to “rebalance” the Air Force “…towards procurement of proven and multi-role platforms,” the service said.  President Obama has reportedly signed off on Defense Secretary Robert Gates’ recommendation to:-

• Cancel the F-22 production program at 187 aircraft, allowing the USAF to take advantage of a “window” during which period the USAF expects to have air dominance anyway.  The budget contains $64m for F-22 shutdown costs (that may not be the whole cost);
• Retire 250 F-15s, F-16s, and A-10s (mostly from the active duty fleet), including some aircraft from the Guard and Reserve and reportedly the USAF will not lose too much capability; 
• Provide about $1.0b for radar and software upgrades for the remaining fighter force, and the number of air-to-air munitions purchased will be increased; 
• “Accelerate” the F-35 program, noting an actual decline from 13 aircraft to ten in 2010.   

Murky Waters for Air National Guard

Lt. Gen. Harry Wyatt, Director of the Air National Guard [ANG], reportedly said on 5th May (during a House Armed Services airland panel hearing) that “…to date, there are no firm plans” to mitigate ANG’s looming fighter gap, despite the fact that he believed the USAF “…has the capability…” to rework its F-35 bed-down plan to include earlier fielding to the ANG.  However, he acknowledged that “…the numbers are extremely critical, and the rate of production is extremely critical.”  Because of these issues, it appears that Wyatt has not ruled out buying modernised legacy fighters.

The ANG (which handles the bulk of the homeland air sovereignty alert mission) will lose 80% of its F-16 fleet to age in less than eight years, with their retirement in the 2017 to 2018 timeframe.  Whereas, Wyatt told the lawmakers, currently “…the bulk of the ANG recapitalisation in the F-35 occurs in the out years, approaching 2022 and thereafter.”  So if there is not an accelerated replacement program, “You can expect more safety issues, failed inspections, less combat capability, and mission gaps.”

Rep. Neil Abercrombie (D-Hawaii), panel chairman, asked Wyatt to provide the new plan anticipated with DoD’s release of its 2010 budget, which happened on 7th May.  However, the publicly released documents and briefings apparently offered no new information addressing the ANG’s dilemma. 

Stealthy Is Not There

Although Defense Secretary Robert Gates has said he’s only postponed the Air Force’s next-generation bomber [NGB], it is “zeroed out” for 2010, deputy Air Force budget director, Patricia Zarodkiewicz told reporters at a Pentagon briefing.  No “placeholder” money is in the procurement or R&D budgets.  Gates has said he wants more clarity on the NGB program – a position criticised by some defense analysts and lawmakers, who cite the 2006 QDR recommendations and a decade of study.  As recently as last year, the NGB was expected to be a $5b R&D effort. 

However, the Budget does contain $500m to continue upgrading and operating the existing bomber fleet, mainly with new radars and communications gear, with $173m to keep 76 B-52s available as nuclear platforms.  However, USAF officials could not immediately say whether there’s any money for upgrade, service life-extension or replacement of the AGM-86 air launched cruise missile or AGM-129 advanced cruise missile, which only the B-52 carries and without which it has no nuclear mission.  The Air Force announced a heavy drawdown of both missile inventories two years ago.

The Airlift Agenda

There is $400m in the Air Force’s budget request for a restart of the KC-X tanker program.  Service officials said they anticipate a new competition and an award to be made by the middle of Fiscal 2010, but the number of aircraft and the methodology of the competition apparently is yet to be decided.  There is $700m in the budget request for the C-5 re-engining and avionics modification program, which also funds the C-130 avionics mod.  No money is in the budget for additional C-17s beyond the 205 now on contract, although Congress is looking to add some in its supplemental deliberations.  The Air Force put $91m in its budget request to shut down the C-17 line.  The service is also funding eight C-27 joint cargo aircraft [JCA] as the newly appointed program manager.  Army funds for the program were deleted – see below.

JCA Moves from Army to Air Force:-

Among the program decisions revealed in the Budget was the Office of the Secretary of Defense’s (OSD) decision to take the Army out of the C-27J JCA program and put it solely under the Air Force.  The Army already had purchased eleven airframes and spent $280m on the effort to field aircraft to replace its elderly C-23 Sherpas.  The Air Force budget includes eight JCAs, with a total price tag of $328.5m, including $9.4m in R&D.  The OSD also slashed the total size of the JCA buy from 78 to 38 aircraft.  The theme behind this decision is to “exploit some synergy” in the Air Force for the intra-theater mission between the JCA and the C-130.  The OSD holds the view that the two aircraft have, in some cases, similar capabilities.  As a result, the Army must now work out how to divest the training and equipping piece of the program, as well as the eleven airframes it has already purchased.  “Where we are, at this juncture, is that the Air Force leadership, the Army leadership, and the Air Guard and the National Guard are still working out the implications of how to effect this transfer,” Army Lt. Gen. Edgar Stanton III, the Army’s military deputy for budget matters, said, “Issues such as training, manning and facilities are still being discussed.” 

Predator Out, Reaper In:-

The Air Force is not buying any more Predator MQ-1 killer-scout unmanned aerial vehicles [UAV], but it will increase its fleet of MQ-9 hunter-killer UAVs by 24 aircraft, in its budget.  Overall, the Defense Department wants to achieve a 50 Predator-class surveillance capability by 2011.  Unexplained is what happened to the earlier vaunted MC-12 “Liberty” intelligence-surveillance-reconnaissance UAV.  24 were funded in Fiscal 2009, but USAF requested none in 2010.

No CSAR-X, Period:-

The Pentagon will not continue the CSAR-X combat search and rescue helicopter program and has cut the $144m that had been planned for the aircraft in this budget.  In announcing the CSAR-X termination on 6th April, Defense Secretary Robert Gates questioned the need for a single-service, single-purpose program.  The $89m left in this budget request will be used for “…a requirements review,” presumably after the need for the CSAR mission is settled in the just-commenced QDR. 

MH-60 Pavehawks:-

Because the Air Force has not been replacing any of its combat-losses of or retirement of the MH-60G Pave Hawks (it has been waiting for the new aircraft), the service will start upgrading the existing fleet and will buy two new Sikorsky UH-60 Black Hawks through the Army to supplement what’s left.

“Cyber” issues

The US Strategic Command that oversees the operations of the military’s unclassified and secure computer networks has come under scrutiny and a proposal has been tabled to combine the presently two separate offices of Cyber-Defense and Cyber-Attack to provide important synergies.  No decision has been announced yet that this will happen, but if it does, the functions of its joint task for global network operations and its joint functional component command for network warfare would likely be combined under a single commander.

Another issue to be resolved is to improve the security of the DoD’s computer networks to reduce their breaching by hackers.  To date, it appears that hackers’ primary intention is to steal information and not to deny the operation of the networks.  Of the two techniques, denial of the operation of a network is considered to have the most serious impact on the operations of the DoD in the battle with the hackers.  The US DoD is continually striving to improve the security of the systems and this imposes the development of more sophisticated hacking capabilities that has clear cost and capability implications on their actions.  An increase of 2,000 to 4,000 personnel is estimated to be required over the next five years to defend the Defence cyber networks.   

The Army

The total Fiscal 2010 budget request was $225b, which was 2% less than the last year’s sum, comprises a $142b base request (up $2b) and $83b “Overseas Contingency Operations” request for overseas combat operations in Iraq and Afghanistan.

The proposal will fully fund the All-Volunteer Force at accelerated Grow-the-Army levels to: 547,400 for the active component, 358,200 for the ANG and 205,000 for the US Army Reserve.  The budget request demonstrates the Army’s commitment to soldiers and families by funding $1.7b in family programs, completing the construction of warrior-in-transition complexes included in the Army Medical Action Plan, and privatising more than 2,000 houses through the Residential Communities Initiative.

Army Budget Priorities:-

• Grow and sustain the All-Volunteer Force;
• Station the force to meet strategic demands by providing infrastructure and services;
• Train and equip soldiers and units to maintain a high level of readiness for current operations;
• Provide effective and efficient support to combatant commanders;
• Reset our soldiers, units and equipment for future deployments and other contingencies;
• Transform the Army to meet the demands in a changing security environment;
• Modernise the force.

Program Overview

Of the $142b:-

• $58b for personnel accounted for the biggest part of the Army’s base budget request with pay increases of 2.9% for military personnel and 2% for civilians;
• $7b, including the base and contingency funding, for aircraft, including:-
  • 54 Lakota Light Utility Helicopters,
  • eight AH-64 Apache helicopters,
  • 39 CH-47 Chinook helicopters,
  • 83 UH-60 Black Hawk helicopters, and
  • 704 RQ-11 Raven UAVs;
• For vehicles:-
  • Joint funding of $5.5b for 1,080 lighter mine resistant ambush protected all-terrain vehicles,
  • $1.7b for 10,268 high mobility multi-purpose wheeled vehicles,
  • $1.6b for 5,532 medium tactical vehicles, and
  • $1.4b for an unspecified number of heavy tactical vehicles.
• Active force increase to 547,400 soldiers:- The Army also plans to end its formation of active-duty brigade combat teams at 45, three short of earlier plans.  Funds allocated for recruiting will also be “zeroed” as the number of personnel volunteering for an Army life is higher now than for many years, probably due to the recession in the United States;   
• Future combat systems [FCS]:- The medium-range munitions program for FCS will end, but FCS dollars for 2010 will continue the development of three unmanned ground vehicles, two UAVs, a non-line-of-sight launch system, unattended ground sensors and an information network.  The implementation of mature FCS to all 73 brigade combat teams (not just the 15 brigade combat teams originally planned) are planned to be accelerated.  The plans for the FCS were lowest on the Army’s list of priorities; 
  • Manned ground vehicle [MGV]:- The cancellation of the MGV might have its origins in a criticism of it made in April by Defence Secretary, Robert Gates who reportedly referred to it as a “Cold War relic.”  The decision to cut the MGV resulted in a budget reduction of $633m;
  • Operations and maintenance [O&M]:- $93b including the base and contingency requests for total O&M effort was relatively level with last year’s budget;
  • Research and development:- $10.5b, decreased from $12.1b last year.

Conclusions

• A balanced budget in the light of the United States economic situation.
• Recognition that the shape of future military action is changing again, with “grunt” mobility, survivable communications networks imperatives, along with the ultimate fall-back of nuclear deterrence being retained.
• The strong, rational arm of Defence Secretary Robert Gates is evident and with the President’s support.
• Recommendations arising from the forthcoming QDR are highly likely to change this budget to a “draft status.