Analysts say Defense spending will climb despite pressures

Despite pressures to reduce federal spending, the Pentagon's budget likely will continue to grow, though not at the same double-digit rates the Defense Department has enjoyed for nearly a decade, independent budget analysts said Wednesday.

With several top military programs moving from the drawing board to production, military procurement accounts will grow over the next several years, said Steven Kosiak, an analyst at the Center for Strategic and Budgetary Assessments. And personnel accounts will continue to rise, due in large part to expanded healthcare programs and bonuses offered in recent years.

Meanwhile, the military will continue to use supplemental spending dollars to pay for some routine bills that would ordinarily be included in the regular budget. For instance, the Army has paid for its efforts to transform itself into a more modular, brigade-based force out of supplemental appropriations -- at $5 billion a year.

President Bush's fiscal 2007 defense budget request, which will go to Capitol Hill Monday, will provide only "two-thirds of the picture," said Kosiak, speaking at a briefing on future defense spending.

Stanley Collender, a former House and Senate Budget committee aide and general manager of Financial Dynamics Business Communications, added that the $32 billion expected in cuts to the Defense Department's projected budgets between fiscal 2007 and fiscal 2011 will be "made up and then some" through the supplemental spending.

But Kosiak cautioned that the defense spending boon eventually will wind down, with the long-term prospects for continued growth in procurement becoming bleaker in the future, particularly if the department and industry cannot rein in escalating research and development dollars.

While the Pentagon has several pricey technology modernization programs in the works, Kosiak predicted defense procurement would not reach $119 billion in its fiscal 2011 budget, as officials projected last year. "That's probably optimistic," he said, adding that there is "tremendous pressure on the acquisition side."

In fiscal 2007, the military will enter its ninth year of growing defense budgets. That rivals the longest sustained military buildup in history, which occurred at the height of the Cold War, between 1975 and 1985.

"Defense buildups don't last that long," Kosiak said. According to the Bush administration's own spending forecasts released with the fiscal 2006 budget request a year ago, annual defense spending was expected to grow only five percent over the next five years. During the five years leading up to fiscal 2006, the Pentagon budget grew 21 percent, not including wartime spending.