Weapons Spending Plans May No Longer Be Realistic, Hale Says

Weapons Spending Plans May No Longer Be Realistic, Hale Says

The growth in overall U.S. defense spending needed to support planned weapons programs in fiscal years 2013 and 2014 likely won’t materialize, as pressure increases to reduce the federal deficit, according to Pentagon Comptroller Robert Hale.
Growth in procurement spending of between 2 and 3 percent above inflation is needed or the military must cut, he said.
“The White House been real clear. They still represent our interests and our priorities but everything is on the table and we need to be realistic,” Hale said.
“We’re going to end up lower,” he said, citing cuts being considered by Congress. “How much is the question.”
The next two years also will be “probably lower too. We’ll have to wait but I think that is realistic” to expect the projections won’t hold, Hale said in an interview with Bloomberg News on July 6.
Hale a year ago said spending on weapons through 2016 likely would grow faster than the overall defense budget. The Pentagon in February projected an overall increase of 1 percent above inflation for the fiscal 2013 budget and a half percent for 2014. The remaining two years projected no real growth.
Hale said he’s now not sanguine about achieving even that projection, to $571 billion in fiscal 2013 and $586 billion in 2014, from $553 billion requested for fiscal 2012.
The estimates in the fiscal 2012 budget show procurement increasing to $137.2 by fiscal 2016, up from $113 billion in the fiscal year beginning Oct. 1. The plan calls for $117.6 billion in fiscal 2013, $125.9 billion in 2014 and $129.5 billion in 2015, before reaching the $137.2 billion in 2016.
Slower Growth
“We would like to see that” growth, he said, “but I’m not sure it will come out of this budget debate and discussion of lower numbers.” The fiscal 2012-2014 projections are “certainly an upper bound. We probably won’t get that far,” he said.
Hale said that major weapons program are “on the table” for potential cuts.
“We will have to look at major programs, potentially -- it won’t be the first place we’ll go,” he said. “We’d like more efficiency, but there will be limits to what we can get out of that bin. So I would not say it’s off the table yet.”
The Pentagon’s biggest weapons suppliers include Lockheed Martin Corp. of Bethesda, Maryland; Northrop Grumman Corp. of Los Angeles; General Dynamics Corp. of Falls Church, Virginia; Boeing Co. of Chicago; and Raytheon Co. of Waltham, Massachusetts. $400 Billion or ‘Greater’ (Source: Bloomberg)


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