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Republicans May Fight Obama’s $671 Billion 2012 Defense Budget

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Boeing Helicopter, Aircraft are Big Budget Winners
The budget includes $816 million to upgrade 19 Boeing AH-64 Apache Helicopters. Photographer: Neal/AFP/Getty Images

Feb. 15 (Bloomberg) -- The Obama administration’s $671 billion defense budget for fiscal 2012, which is $37 billion less than the current year’s request, may set up a fight in Congress with senior lawmakers opposed to such a reduction.

The request includes $553 billion in core Department of Defense spending, including weapons procurement, and $117.8 billion in military spending in Iraq and Afghanistan, according to the federal budget documents released yesterday.

Less than 2 percent to 3 percent growth in defense may lead to “dire consequences” for weapons and troops, said U.S. Representative Howard “Buck” McKeon, chairman of the House Armed Services Committee, in a statement yesterday. “I have significant concerns,” he said.

Defense Secretary Robert Gates’s proposal to cancel General Dynamics Corp.’s Expeditionary Fighting Vehicle and plans to reduce the Army and Marine strength were “budgetary shell games” not backed by strategy to counter threats from countries like China, defense analysts at the American Enterprise Institute in Washington said in a report yesterday.

The 2012 budget proposal includes $203.8 billion for weapons buying and research, including $113 billion in base procurement, $75.7 billion in research and $15 billion in war-related procurement.

$70 Billion To Modernization

It also includes $9.7 billion for 32 Lockheed Martin Corp. F-35 fighter jets, $4.7 billion for two additional Virginia-class submarines built by Northrop Grumman Corp. and General Dynamics and $975 million toward two additional Lockheed Martin Advanced Extremely High Frequency communications satellites.

“There are a number of new areas where we are beginning to invest,” Gates told reporters at the Pentagon yesterday. Almost all of $70 billion that the military services achieved in a budget-cutting exercise to reroute funding into higher priority areas will be funneled into modernization programs, Gates said.

The defense budget will also increase spending on cyber and electronic warfare, unmanned drones and helicopters, according to the budget documents.

Gates laid down a new marker yesterday for the current year’s budget, the 12 months that began Oct. 1, as Congress continued to delay completing work on the fiscal 2011 appropriations. He said he needs at least $540 billion, down from the $549 billion base budget proposed a year ago.

“I realize that in the current fiscal environment and political environment, it is unlikely that the Defense Department will receive the full amount originally requested,” Gates said.

‘Serious Considerations’

An interim spending resolution in effect through March 4 projects core Pentagon spending for the current year at about $526 billion, about $24 billion less than the Pentagon’s request.

“Suggestions to cut defense by this or that large number have largely become exercises in simple math,” Gates said. The discussions are “divorced from serious considerations of capabilities, risk and the level of resources needed to protect this country’s security and vital interests around the world.”

Current expenses include about $28 million a month to continue developing an alternative engine for Lockheed Martin Corp.’s F-35 Joint Strike Fighter, a program the department and military services have said they don’t need, Gates said.

F-35 Engine

Gates yesterday said he may try legal avenues in another attempt to shut down the project, kept alive by members of Congress who say it’s needed as a backup to the primary engine being developed by United Technologies Corp.’s Pratt & Whitney unit. General Electric Co. and Rolls Royce Group Plc are developing the second engine.

“When the current continuing resolution expires, I will look at all available legal options to close down this program,” Gates said. He called it a waste of money “needed for higher-priority defense efforts.”

General Electric defended the alternative engine as a valuable precaution that will save money through competition.

“Fifteen years of bipartisan congressional support for the F-136 engine is based on good government policy that will save taxpayers money,” said Rick Kennedy, a spokesman for GE Aviation, in an e-mail.

The proposed Defense Department budget for fiscal 2012 of $553 billion would represent growth of about 3.6 percent, adjusted for inflation, over the stopgap legislation, according to Pentagon figures.

Deficit Reduction

The request represents a $13 billion reduction from the $566 billion the Pentagon planned last year for fiscal 2012.

It’s the first installment of $78 billion in deficit reduction cuts, or 2.67 percent, that are part of a $2.91 trillion defense plan through 2016, according to the documents.

The proposal allots $52.5 billion for Tricare, the military health-care program, and allows for an increase in the enrollment fees for working-age retirees and families.

Gates said last May that military health-care costs are “eating the Defense Department alive.” Pentagon officials have tried for years to increase Tricare fees to help ease increases in health-care spending. Military advocacy groups and lawmakers have opposed passing along more costs in a program that has grown to 9.6 million beneficiaries.

The proposed 2012 budget includes an increase in enrollment fees of $2.50 a month for working-age retirees and $5 a month for families. The co-payment for prescription medication would increase by as much as $3 for those filled in retail pharmacies, while being eliminated for orders by mail. There would be no co-pay for prescriptions filled at military facilities.

War Expenditures

The Obama administration’s proposed $117.8 billion war bill would be the lowest expenditure for the wars since fiscal 2006. It reflects assumptions of declining troop levels in Iraq and Afghanistan.

The Pentagon today has roughly 97,000 troops in Afghanistan and 47,000 in Iraq. The 144,000 total is the lowest since July 2006, when the U.S. had about 148,100 deployed, according to military data compiled by the nonpartisan Congressional Research Service. U.S. troops are scheduled to leave Iraq by the end of this year.

To contact the reporters on this story: Tony Capaccio in Washington at Gopal Ratnam in Washington at;

To contact the editor responsible for this story: Mark Silva at

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