Thursday, June 21, 2012

6/21/12 RD Bulletin: Joint Strike Flameout: Levin Frowns as GAO Says It's Later & More Costly Than Ever


Highlights
 
News: A new GAO report released last week urges the Department of Defense to consider the potential impact of decreased funding for the F-35 Joint Strike Fighter as concerns continue to mount over cost growth in the most expensive acquisition program in U.S. history.  Sen. Carl Levin (D-MI) believes Congress and the Pentagon must put additional pressure on the F-35’s manufacturer, Lockheed Martin, to reduce costs associated with the aircraft program. 
 
News: The Senate Appropriations Subcommittee on Defense is waiting to mark up its annual spending bill until the House passes its version of the appropriations measure, says Chairman Daniel Inouye (D-HI).  Neither one is expected to occur until sometime after the July 4 Congressional recess. 
 
Report: The Department of the Army has notified Congress that the cancellation fee associated with terminating the Future Combat Systems program will ring in at almost half a billion dollars, bringing the total cost of the cancelled modernization program to almost $20 billion.

State of Play
 
Legislative: The Government Accountability Office (GAO) released another troubling report on the F-35 Joint Strike Fighter late last week, which highlighted a number of missed deadlines and cost-overruns, including the fact that the JSF acquisition program is now 42 percent, or $117.2 billion, over its original 2007 cost estimate, and is now expected to enter full production six years later than originally intended.  The report also notes that the JSF program achieved only 6 of 11 important objectives in 2011.  Finally, the report recommends that the Pentagon prepare for the possibility that funding for the F-35 may be reduced in future years, urging the department to “analyze cost and program impacts from potentially reduced future funding levels.”  Meanwhile, Senate Armed Services Chairman Carl Levin (D-MI) says the Pentagon and Congress must do more to pressure Lockheed Martin to reduce costs in the JSF program, while noting that the Pentagon must have a contingency plan in case the JSF is cancelled or significantly reduced, “We've got to have a backup, which is what the F-18 is all about," says Levin.  
 
The Chairman of the Senate Appropriations Committee and Subcommittee on Defense, Daniel Inouye (D-HI), says that he expects the defense panel to mark up its annual military spending bill sometime after the July 4 recess, but that the chairman is waiting for the House to complete action on its version of the spending bill before advancing the Senate measure.  However, the latest indications from House majority staff are that the chamber is likely to take the bill up later in July, if not sometime in the fall.  The Senate version of the defense appropriations bill would provide $511.2 billion for the Pentagon base budget while securing $93.5 billion for the war funding account, the latter being almost $5 billion above the Pentagon’s OCO request.  Since the OCO account is not subject to existing statutory budget caps, appropriators are free to pad the account with unrequested funds in order to relieve some pressure from the base budget. 
 
This week, the top Democrat on the House Armed Services Committee, Adam Smith (D-WA), echoed comments made by his Democratic Senate counterpart, Carl Levin (D-MI), in support of requiring the Pentagon to forfeit $100 billion over ten years instead of succumbing to roughly half a trillion in sequestration cuts.  John Donnelly of CQ Today comments on Smith’s announcement, “Taken together, the comments by Smith and Levin make clear that, even if sequestration is averted, the Pentagon may have to scale back its plans further. Their remarks also suggest that Democrats in both chambers are coalescing behind the notion of cutting substantial additional sums from the Pentagon budget on top of the roughly $487 billion in cuts required by last year’s debt ceiling law over the next decade.”  And the Chairman of the House Armed Services Committee, Buck McKeon (R-CA) has released another video warning of the effects of sequestration.  McKeon is planning on calling a series of hearings to highlight the White House’s inaction on planning for sequestration, which would feature OMB officials’ testimony.  However, OMB has rejected McKeon's request to appear before the panel. 
 
The Senate will likely consider two amendments to the pending farm bill, one of which would direct the Pentagon to report on the likely effects of sequestration of military funds while the other amendment, to be offered by Sen. Patty Murray (D-WA) would direct the Office of Management and Budget to report back on the effects of sequestration to both defense and non-defense accounts.  The Chairman of the Joint Chiefs of Staff, Martin Dempsey, says that if sequestration occurs as scheduled, the White House will likely protect the military personnel and OCO accounts, leaving the majority of automatic cuts to fall on operations, maintenance, training, and modernization. 
 
Thirty-three House Democrats, led by Rep. Ed Markey (D-MA) have signed a letter to the President urging him to uphold his veto threat of the House-passed National Defense Authorization Act if language is included in the final bill restricting the administration’s ability to reduce the nuclear weapons stockpile.  The White House has already issued a veto threat over the measure – citing a number concerns with the bill, including the aforementioned limitations on nuclear reductions. 
 
Sen. Mark Warner (D-VA) and Rep. Adam Kinzinger (R-IL), a former Air Force pilot, have released new data that shows that F-22 Raptor pilots suffer from significantly higher rates of hypoxia-like symptoms than pilots who fly other aircraft.  Specifically, F-22 pilots suffer hypoxia at rates ten times those of other Air Force pilots. 
 
The White House has responded to a letter sent by three House Republican Committee chairs last week, in which the members criticized the administration for failing to adequately budget for sequestration and for assuming that automatic cuts will hit the war funding account.  Acting OMB Director Jeffery Zients responded to the letter by claiming that the White House has no discretion over whether or not OCO funds are sequestered, and that should Congress fail to nullify sequestration, then the administration will be prepared for the forthcoming funding cuts.  Moreover, Zients pointed out that Congress is the only body capable of delaying or nullifying sequestration at this point. 
 
The Lexington Institute’s Daniel Goure reports that the Obama administration’s most recent Nuclear Posture Review will recommend reducing the nuclear stockpile to 1,000 warheads, a one third reduction from New START levels.  Unsurprisingly, Goure comments that a combination of nuclear and ground force reductions will lead to “less security both at home and abroad.” 
 
Executive: The Department of the Army has notified Congress that it expects to pay Boeing almost half a billion dollars in termination fees for the Future Combat System contract, which was cancelled in 2009, bringing the total cost of the failed effort to $19.9 billion.  However, AOL Defense estimates the contract cancellation will likely cost $1.5 billion, almost three times the amount of the special cancellation fee.  The Navy’s next-generation arresting gear for the newest aircraft carrier, the USS Gerald Ford (CVN-78), is experiencing developmental problems, which has caused its price tag to jump by $39 million this year.  Despite the developmental problems, the Navy claims it will receive the carrier on schedule.            
 
Egypt’s transition to democracy appears to be rapidly faltering following the dissolution of the Muslim Brotherhood-dominated Parliament by the military late last week.  During the presidential election held this weekend, the Egyptian military released an interim constitution that grants it wide-reaching authority over the national budget and war-making powers.  Sen. Pat Leahy (D-VT), chairman of the Senate Appropriations Subcommittee on foreign operations, said that $1.3 billion in U.S. aid to Egypt may be withheld if the military continues to rollback democratic reforms, while senior Pentagon officials were quick to plead with their Egyptian counterparts to relax some of their recent power-grabbing efforts.  Meanwhile, the Pakistani Supreme Court has dismissed Prime Minister Yousaf Raza Gilani over his refusal to investigate President Asif Ali Zardari. 
 
The United States has sold a record amount of foreign military equipment this fiscal year, totaling nearly $50 billion, up from $30 billion last year.  The largest portion of these purchases comes from Saudi Arabia, which recently inked a deal to purchase almost $30 billion worth of F-15 Eagles.  The White House has released its semi-annual report to Congress on military deployments abroad, in which it acknowledges formally, for the first time, that U.S. military assets are conducting lethal operations in Somalia and Yemen.  The Los Angeles Times reports this morning that the Pentagon is actively considering sending U.S. military cargo aircraft to Yemen to aid in the fight against al Qaeda.  However, the plan has not yet won White House or State Department approval. 
 
Foreign Policy and the Fund for Peace have published their annual list of the most troubled states globally.  Unsurprisingly, many of the top nominees receive considerable amounts of U.S. military aid and training.  And in a stir of old Cold War rumblings, Russia is  deploying two amphibious landing ships loaded with marines and tanks to Syria to protect Russian citizens and military equipment in the increasingly unstable country.   Of course, the United States doesn’t want to feel left out of the equation: the New York Times reports that CIA agents on the ground in Turkey are helping to select which Syrian rebel groups receive arms shipments from Turkey, Saudi Arabia, and Qatar. 
 
Following recent bickering between Congress, which wants the Pentagon to close overseas bases, and the Department, which is trying to gain approval for two new rounds of domestic base closures, the new commander of U.S. Pacific Command, Adm. Samuel Locklear, announced that the United States would not seek to construct new bases in Asia as part of its new strategic pivot.  Rather, the United States will utilize existing military facilities in countries like Thailand, Vietnam, and the Philippines.  In fact, Thailand and the United States recently agreed to establish a joint commission to examine the possibility of allowing the United States to use a naval base in the South-East Asian country for humanitarian and disaster relief operations.  According to Locklear, the new Marine base in Darwin, Australia is expected to be the last new facility constructed in Asia for the time being.  U.S. defense officials are trying to downplay concerns from Asian allies that the United States strategic pivot would entail a large presence of American troops in the Pacific region. 
 
Project on Defense Alternatives Perspective: The House Armed Services Committee (HASC) stands out as resistant to recent efforts to reign in defense spending that has grown rapidly and to extraordinary levels during the ten years from 2002 through 2011.  Once in a while, a reason for the committee’s behavior is starkly revealed: The Republic Report tells the story of former Northrop Grumman lobbyist, Thomas MacKenzie, who was hired by HASC and its new Republican chairman Buck McKeon in 2011.  As MacKenzie left Northrop Grumman to go to work at HASC, the defense industrial giant paid him a $498,334 bonus, a close equivalent to the yearly salary he had been earning. 
 
After all, MacKenzie would now work as a public servant in Congress and make only $120,000 a year as a staffer, surely a painful sacrifice.  Northrop Grumman’s bonus would assure both MacKenzie’s and McKeon’s loyalty to Northrop Grumman’s interests in crafting defense legislation.  It is an error to think that such abuse of representative democracy is the only reason the Armed Services committee does what it does, but it is surely a contributing factor with real effect.  
 
News and Commentary
 
Roxana Tiron explores the utility of the $42 billion fleet of next-generation aircraft carriers the United States is currently developing.  However, as the U.S. military budget becomes increasingly constrained, the next-gen carriers will have to compete with other large procurement programs like the F-35 and KC-46 aerial refueling tanker; this all despite the fact that China is developing new ballistic missiles specifically designed to destroy U.S. aircraft carriers.  (6/20/12)
 
While big-ticket items like the CVN and F-35 programs receive a lot of scrutiny, Walter Pincus highlights two recent troubling reports on a small mine-hunting procurement program called the Organic Airborne and Surface Influence Sweep (OASIS), which was originally supposed to have an initial operating date in late 2005 and was estimated to cost $55.1 million.  Pincus writes, “As of now, the Navy hopes to start low-rate production with four OASIS units for $15 million and eventually buy 38 more for $140.6 million, or $3.7 million each. Developing and procuring OASIS has become a $290.5 million program.”  OASIS is now expected to enter full-rate production in late 2013.  (6/20/12)
 
Ben Friedman of the Cato Institute wonders why the United States military is involved in multiple contingency operations with an additional 12,000 special operations forces dispersed throughout a dozen countries conducting counter-terrorism and military training.  He concludes that it has become too easy for the United States to engage in war abroad because only a small segment of the U.S. population bears the brunt of overseas deployments, and that technological advancements have reduced the traditional disincentives to armed conflict: “invasion, mass death, etc.”  (6/20/12)
 
Rep. Hank Johnson (D-GA) and defense aide Jonathan Ossoff comment on a recent proposal by House defense appropriators to redeploy tactical nuclear weapons to Asia.  The two assert that the United States already has sufficient nuclear deterrents in the region and conclude that the provision is “a classic example of Congressional chest-thumping, intended to present a facade of toughness and savvy despite its imprudence.”  (6/20/12)
 
A Bloomberg Government analysis finds that the Air Force’s three biggest drone programs, the Global Hawk, Predator, and Reaper, suffer the highest accident rates of any aircraft in the fleet.  The analysis shows that the three drone variants suffer accidents at three times the rate of the entire Air Force fleet.  (6/18/12)
 
Gordon Adams comments on the lack of transparency in the nuclear weapons budget following a recent Stimson Center report that estimates the United States spends approximately $31 billion on its nuclear weapons arsenal annually.  While Adams admits that understanding the size and costs associated with the U.S. arsenal will not necessarily lead to reductions, he points out that it informs the debate and identifies a baseline from which a discussion over sensible nuclear reductions can begin.  (6/18/12)
 
Defense News queries defense analysts for their thoughts on former Gov. Mitt Romney’s proposal to increase military spending to four percent of GDP while slashing personal income and corporate tax rates and decreasing the deficit.  Todd Harrison points out the difficulties in executing Romney’s plan, “If you want to increase spending on defense over the next decade and reduce the deficit, then that necessarily means sharp reductions in Social Security, Medicare and Medicaid or sharp increases in taxes, or some combination of the two.”  (6/17/12)
 
Kimberly Dozier, Lolita Baldor and Robert Burns argue that while high-tech warfare methods employed by the Obama administration minimize direct risk to U.S. personnel, they also raise “questions about accountability and the implications for international norms regarding the use of force outside of traditional armed conflict.” (6/17/12)
 
After the Air Force recently halted a $1 billion IT contract, the Dayton Daily News reviewed a series of GAO reports published over several decades which point to serious problems and waste in the Pentagon’s IT acquisition and development process.  Ironically, many of the IT systems that are seriously over-budget and past schedule are designed to facilitate an eventual Pentagon audit.  “Four Air Force and Army computer modernization projects, all begun about a decade ago to account for and control billions of dollars in equipment and parts inventories, have had problems with data quality, data conversion, system interfaces and training.”  (6/17/12)
 
Foreign Policy: The Deepest Cut
Robert Haddick asserts that irrespective of whether Congress nullifies sequestration, the Defense Department budget will decline significantly over the coming years as the wars in Iraq and Afghanistan draw to a close.  Citing the Center for Strategic and International Studies’ most recent report, which forecasts additional military spending reductions of $1.2-1.5 trillion, Haddick encourages Pentagon budget planners to use past drawdowns as a rubric for how to plan for forthcoming spending reductions.  (6/15/12)
 
Most U.S. intelligence operations in Africa are not run by the military, but are instead contracted out. Craig Whitlock reports that the U.S. military has, to a large extent, outsourced the intelligence operations in Africa to private contractors. There is some concern, however, over the apparent lack of oversight as “the arms-length arrangement exists outside traditional channels.” The author also points to the perils of hiring civilians to do intelligence work in dangerous environments. (6/14/12)
 
Last year’s National Defense Authorization Act (NDAA) directed the Pentagon to hire civilian employees to replace some of its contractor personnel.  However, the current version of this year’s Senate NDAA would force the Pentagon to reduce its contractor and civilian employee workforce by five percent over the next five years for approximately $5 billion in savings.  While SASC Chairman Carl Levin (D-MI) admits the two provisions are slightly contradictory, he believes they can both be carried out simultaneously, “I don’t know that it would overrule the [in-sourcing] policy.  I think you kind of have to make it work together.”   (6/14/12)
 
The Weekly Standard: No Iranian Nukes
Bill Kristol and Jamie Fly strongly criticize President Obama’s efforts to curtail Iran’s nuclear program through diplomacy and sanctions, saying “while it may serve President Obama’s short-term political interests to avoid taking action against Tehran this year, it doesn’t serve the nation’s.”  The two conservative authors encourage Congress to authorize military action against Iran if the administration is unwilling to request an AUMF.  (June, 2012)
 
Reports
 
 
 
 
Congressional Research Service: U.S.-China Military Contacts: Issues for Congress (6/19/12)
 
 
White House Office of the Press Secretary: Presidential Letter -- 2012 War Powers Resolution 6-Month Report  (6/15/12)
 
 
Congressional Research Service: Proliferation Security Initiative (PSI)  (6/15/12)
 
 
 
United States Department of Defense Inspector General: Acquisition of the Navy Organic Airborne and Surface Influence Sweep Needs Improvement  (6/13/12)
 
 
 
 
 
 
Office of the Director of National Intelligence: Intelligence Community Directive 700: Protection of National Intelligence (6/7/12)
 
Office of the Department of Defense Chief Information Officer: Department of Defense Mobile Device Strategy (Version 2.0) (May, 2012)
 
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