Wall Street Bailout = Pentagon Cuts? (Updated)

Washington's leaders have just agreed to a plan that will dump hundreds of billions of dollars on Wall Street. Does that mean defense budgets are going to have to be cut, to help make up this difference?

Next year's Defense Department budget is the largest ever. But many analysts -- even before the bailout -- predicted that the gravy train was going to have to slow down, under the weight of the costs for the Iraq and Afghanistan wars.

Pentagon spokesbot Geoff Morrell says not to worry. "The current financial conditions are not, as far as I can tell, impacting how business is being conducted within this building," he tells reporters. "I would note, however, that in good times and in bad, when the market is up and when it is down, the Congress has been consistent in its support throughout history of our nation's defense. And I don't see any reason why that would change now."

Defense analyst James Lacey concurs, telling DANGER ROOM, "This will probably have zero effect on any other government budget items. "It may have the psychological effect of restraining some future spending, which would be a good thing. However, there is still no limit in sight to how much money the Treasury and Fed can throw at this problem or any other - if they are so inclined."

But Rep. John
Murtha (D-PA), the chairman of the House Appropriations defense subcommittee, has a very different prediction, he tells InsideDefense.com.

*Murtha, who wields enormous influence over Pentagon spending, said the Bush administration’s plan to try to steady global capital markets -- being rocked by a severe credit crunch -- with a series of taxpayer-financed interventions could squeeze the largest single pot of discretionary spending in the federal budget: the national security budget.
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• “You can't spend that kind of money and lower taxes, reduce taxes and still have any money left for defense,” Murtha said after a press conference on Capitol Hill to discus the status of the fiscal year 2009 defense appropriations bill.

"My big question in all this is how much 'discretionary' money will be left for defense spending, homeland security, subsidies for developing renewable energy sources, rebuilding crumbling infrastructure, building new roads, and anything else?" asks John Keller, editor of Military & Aerospace Electronics magazine. "My guess is NOTHING."

An Army field grade officer isn't so sure. "If there are cuts, look to [them] in anything except the high-priced, capstone programs," like the Army's massive Future Combat Systems reboot, or the enormous Joint Strike Fighter stealth jet program.

*More likely is the 1990's versions of cuts - reduced operations and maintenance, reduced training funds. Those have no congressional constituencies. From 1997
(my commissioning) Until 2003 I was never allowed to order a non-deadline part for my vehicles without an O-5 or higher signature.
We were allocated exactly the amount of ammo annually to meet the minimum mandated requirements. Field exercises were tightly controlled based on vehicle mileage allowed/budgeted.

At the same time, several high profile/low impact programs were canceled (M8 AGS [Armored Gun System] for one)... [U]pgrades to basic soldier kit were virtually stopped. Upgrades to legacy systems also ceased.*

And another DC-based military analyst asks, "Doesn't this mean a return to the 'hollow military' of the 1970s?"

Starved O&M [operations & maintenance] means systems that are unable to leave the kaserne, undermanned ships, empty spare parts bins, etc.

Reduced R&D [research & development] means that current systems will likely have to soldier on, even when it is inefficient to do so,because there's nothing coming down the pipeline.

*In a world where technological advances are already outpacing the acquisition cycle, this bodes ill for future readiness, doesn't it?
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