Politics, war drawdown will determine Defense spending

Two questions will determine future defense spending. First, will the new Democratic majority in Congress put the brakes on what have been record levels? Second, what will happen to spending if, as seems likely, a drawdown in Iraq begins in 2008?

The answer to the first question appears to be no. The 2008 Defense budget markups by both the Democratic controlled House and Senate Armed Services committees show that strong bipartisan support exists for funding anything armored and bound for troops in Iraq and for the Pentagon's costly modernization plans. Voting for big defense budgets provides Democrats cover to demonstrate support for the troops fighting overseas while decrying the Bush administration's Iraq war management.

Click here for a full list of the Top 100 defense contractors, from Government Executive's Aug. 15 special Procurement Preview issue.

Between the administration's baseline defense budget and supplemental funding for the wars in Iraq and Afghanistan, the Defense Department is projected to receive $624.6 billion in fiscal 2008. You would have to go all the way back to 1946 to find higher defense spending; the 2008 Defense budget request surpasses even the peak years of military spending during the Korean and Vietnam wars. The United States spends roughly as much on defense as the rest of the world combined. While the dollar figures are certainly high, strong economic growth keeps total defense spending at just over 4 percent of gross domestic product.

Procurement funding jumped about 22 percent over last year's request, with aircraft and ships, as always, topping the list. While the Air Force has not had to contest the skies for superiority since, well, really since Vietnam, the Pentagon continues to buy large numbers of costly front-line fighter aircraft and Congress appears willing to go along. One area where Democrats might rein in spending is missile defense. Bellicose statements and the occasional ballistic missile test by Iran and North Korea, however, likely will keep the funding coming for the various radars and interceptors that fall under missile defense, though perhaps a little less than the Bush administration's requested $9 billion in 2008.

The beginning of an Iraq withdrawal would have an impact on military spending with an immediate contraction in the operations and maintenance account and less urgency in spending on Iraq-specific weapons programs. The Army and Marine Corps' request for 22,000 Mine Resistant Ambush Protected Vehicles to swap out one-to-one with armored Humvees in Iraq is the most likely program to be curtailed as troops come home. An Iraq withdrawal also could embolden members of Congress who think military spending excessive, but who are reluctant to say so as long as troops remain bogged down in Iraq.

Signs of a shift in thinking are emerging among high-ranking Pentagon procurement circles about how weapons are bought. Lessons learned in Iraq and Afghanistan have rubbed the luster from gold-plated, big-ticket weapons programs with long development and production times. Instead, the department wants speedier delivery of items that fit immediate battlefield needs, using more off-the-shelf, commercially available components. There also is an effort to move funding from some of the many "transformational" programs across the services to development of a smaller number of nonservice-specific capabilities. The two most important of these will be short-notice global strike and persistent unmanned surveillance.