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U.S. Spy Budget Falls to $75.4 Billion in Second Decline

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Oct. 30 (Bloomberg) -- U.S. intelligence spending in the past year fell to $75.4 billion, the second straight year of decline since such budgets reached their highest level in the aftermath of the Sept. 11 terrorist attacks, according to figures released today.

The budget for U.S. intelligence activities overseen by the Office of the Director of National Intelligence fell 1 percent to $53.9 billion, according to the office, which oversees 16 agencies. Separately, the Pentagon said Congress approved $21.5 billion last year for military intelligence, a 10 percent decrease from the previous year.

The combined civilian and military intelligence spending for fiscal 2012, which ended Sept. 30, is down 4 percent from $78.6 billion appropriated in fiscal 2011 and compares with $80.1 billion in 2010, when spending peaked, according to government figures.

“Since 9/11, intelligence spending has surged, more than doubling over the past decade,” Steven Aftergood, an analyst with the Federation of American Scientists who tracks the intelligence budget, said in an e-mailed statement.

“Now we are finally seeing signs of stabilization or modest decline,” reflecting diminished operations in Iraq and Afghanistan, he said.

Spending “remains far above historical averages, and well above the immediate post-9/11 level as well,” he said, citing the 1997 aggregate intelligence budget of $26.6 billion, which rose to about $30 billion in 2001.

‘Less Capability’

U.S. spy budgets are set to decline by about $25 billion over the next 10 years, according to intelligence officials who have discussed the classified spending on condition of anonymity. Such cuts may leave the U.S. with “less capability in 10 years than we have today,” James Clapper, the director of national intelligence, said in November.

Much of the savings may come from consolidating a multitude of information technology systems used by the 16 departments and agencies that comprise the U.S. intelligence community, Clapper and other officials said.

The reduction in spending, intelligence officials have said, means less money will be available for research and development of new spy satellites and other technological capabilities, hiring specialists to analyze the flood of data, and bolstering the ranks of human spies who can operate in areas such as northern Africa and Central Asia.

Congress passed a law in 2007 requiring the director of national intelligence to make public the amount of money appropriated annually for intelligence, which already was widely reported. President George W. Bush opposed the measure, saying that releasing the number officially might compromise operations.

To contact the reporters on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net; Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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