The Pentagon must make “modest” cuts or shifts in major defense programs this year to reduce the explosion of costs when procurement begins in 2008 and 2009, Defense Secretary Donald Rumsfeld said.
“It could be a cancellation, it could be shifting something to a farther year out so the cost doesn’t hit at exactly the time of other costs,” he said. “It could be skipping a generation of technologies. It could be moderating the size of something.”
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Rumsfeld worries that ballooning costs in current programs won’t allow the U.S. to buy the newer technology needed to make the military lighter, quicker and easier to deploy.
“As these things grow and become not research programs but acquisition programs, you end up with an amount of money being projected that grows geometrically,” the secretary said in an interview Monday with Bloomberg News.
“The `bow wave’ is gigantic,” Rumsfeld said, referring to the growing aggregate cost of current systems. “A few modest changes early on can affect that very favorably.”
“If you wait, three, four, five years, you’re facing a wall that’s 50 feet high,” he said. “Doing this is never easy, on the other hand it’s a lot easier with a budget that’s growing than with one that’s shrinking.”
Won’t Name Programs
The secretary wouldn’t single out which programs are in for cuts or revision.
Last month he ordered planners to devise strategies by Sept. 1 for potential cuts to the Lockheed Martin Corp. F-22 fighter; the Boeing Co.-United Technologies Corp. Comanche helicopter; the Boeing-Textron Inc. V-22 Osprey tilt-rotor aircraft; the Northrop Grumman Corp. CVNX aircraft carrier; and, a new space-based radar for continuous surveillance of an adversary such as North Korea.
“In some cases, we will forego currently planned weapons systems to invest in capabilities that will reduce future risk,” Rumsfeld writes in an internal order guiding the fiscal 2004-2009 budget. The space-based radar program hasn’t begun so no cost is projected; the other four programs total about $167 billion.
The defense secretary canceled United Defense Industries Inc.’s $11 billion Crusader howitzer program last month. The contractor, the Army and their allies in Congress resisted and the weapon’s utility and funding are still being debated, showing how tough it is to cancel a weapons program once it’s underway.
Other Costs
The fact that Congress is about to approve the largest increase in defense spending in two decades shouldn’t lull anyone into thinking most of it’s going into weapons, the secretary said.
“A big chunk of it is for conducting the global war on terrorism” as well as to cover growth in costs for health care, salaries and military infrastructure, Rumsfeld said. “There are a lot of calls for the funds being authorized and appropriated that are really away from the weapons side of the house.”
Of the $396 billion requested for fiscal 2003, $124 billion, or less than one-third, is for weapons research and procurement. That’s $10 billion more than this year and $26 billion or 27 percent more than fiscal 2000.
By comparison, military personnel costs, including health and pay, have increased by 29 percent, to $94 billion, from $73 billion in 2000. Similarly, operations and maintenance costs have increased by 39 percent, to $150 billion for fiscal 2003 from $108 billion in 2000.
Cost Projections
Rumsfeld’s concern is driven in part by Pentagon projections of spending through 2019 to research, develop and buy current weapons.
The current $124 billion increases gradually to $145 billion in fiscal 2007. It grows to $165 billion in fiscal 2008 and is that much or higher in each of the next five years.
The Joint Strike Fighter alone will demand $5.8 billion in 2008 when the first large purchase of planes is scheduled. And there’s no hint of cutting this Lockheed program, which at $226 billion will be the costliest in combat aircraft history, with 2,852 planes scheduled for delivery to the U.S. Air Force, Navy, Marine Corps and British Royal Navy.
Other commitments in 2008 include: $5.3 billion for the F-22; $5.1 billion to buy two Virginia class submarines; $3 billion for the new DD-X destroyer; $3.6 billion for the F/A-18E/F; $3 billion for the Army Future Combat System; $3 billion for the Comanche; $2.9 billion for a new LHA class of Navy amphibious assault ship and, $988 million to start procurement of a new Navy multimission aircraft.
While long-range schedules and costs are inevitably adjusted because of cuts and tests failures, “the reality is that the bow wave that exists is of sufficient magnitude that reasonable people will say the time to fix it is now,” he said. “Every year you wait and you are much closer to it requires a much more severe change — it can mean `wrenching’ and harmful to people.”
Bloomberg News
