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News Link • Military Industrial Complex

Perpetual War Machine Depression-Proof at Least ‘Until 2016′

• Bloomberg News
The U.S. government will enhance its role as a customer of the military-industrial complex through 2016, Pentagon Comptroller Robert Hale said in an interview, Tony Capaccio reported today at Bloomberg (via Business Week).

The government’s “spending on weapons through 2016 likely will grow faster than the overall defense budget, which will have annual increases of only about 1 percent above inflation”, Mr. Cappacio reported. Mr. Hale said that the “goal would be to get forces and modernization to grow by 2 or 3 percent” and “to move money from support-type activities—operations and maintenance, military construction—into acquisition”.

Mr. Cappacio reported on the recipients of this corporate welfare expansion:

An increase in weapons spending will include greater purchases of Bethesda, Maryland-based Lockheed Martin Corp.’s F- 35 fighter, new ground vehicles, ship construction, satellite systems and unmanned drones, according to the Pentagon’s long- range plan. Northrop Grumman Corp., of Los Angeles, and Chicago- based Boeing Co. also stand to benefit.


Hale’s remarks are good news for defense contractors, said Todd Harrison, a defense analyst with the Washington-based Center for Strategic and Budgetary Assessments.

Though Defense Secretary Robert Gates has announced the Pentagon will be shut off the “gusher”, Mr. Cappacio reported that the efforts will be to cut overhead, as the total spending itself only sees growth:

Congress approved $104.8 billion for weapons buying this year and is considering proposed procurement spending of $111.2 billion for fiscal 2011, which begins Oct. 1. The Pentagon may request $120 billion in 2012, rising to $137 billion in 2015, according to comptroller’s office projections that Hale said are, at this time, only for planning purposes.

Estimates about how much money may become available from the cost-cutting efforts are “going to get squishier” as projections move further into the future, Hale said. “That’s just inevitable.”

The Pentagon plan calls for $7 billion in savings in 2012, increasing to $11 billion in 2013 and $18.9 billion in 2014, according to a Pentagon fact sheet. The largest savings are projected at $37 billion in 2016.


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