The Insider

The 2010 QDR just might be preceded by a brand-new, sweeping national security review.

Experts say President-elect Barack Obama’s team is likely to conduct a new kind of national security review that spans the entire U.S. government. Call it what you will -- NSR, quadrennial NSR, or QNSR; it could be a very big deal.

“With the rise in importance of stability operations and the Obama team’s desire to increase the role of ‘soft power,’ this is an idea that is likely to get a warm reception,” says Andrew Krepinevich of the Center for Strategic and Budgetary Assessments. Such a review could be done without delaying the schedule for the QDR, he said.

Opinions differ, however, on how soon such a review can be mustered, as Inside the Pentagon reports today.

Also today: Our coverage of telling essays by Michèle Flournoy, who co-chairs Obama’s DOD transition team, and Robert Gates, who will continue to lead the Pentagon. (Her essay is here; his is here.)

And see this story on the three-step process that Flournoy recommended for developing the new national security strategy. She outlined it this past summer in a book published by the Center for New American Security.

In the spirit of the term "All Politics Is Local," Boeing today released a statement about an Arizona State University report that found the company's missile defense work had contributed $193 million per year to Arizona's economy. According to Boeing:

The study looked at payroll, non-payroll purchases and expenditures, and vendor commitments in the state to determine the overall impact of Boeing's work on the GMD program.

Major economic impacts for 2007 include:

* Created 1,936 direct and indirect jobs in the state
* Distributed a payroll of $94 million
* Generated $137 million in Arizona household earnings
* Contributed $12.7 million in state and local government tax revenue.

Arizona State economics professor Lee McPheters, who has studied Boeing and other high-tech firms, said GMD gives Arizona's economy a major boost.

"Looking at the average earnings across all the jobs created by GMD, both direct and indirect, the GMD program serves not only to expand the size of the economy in Arizona, but also to raise the average standard of living of its residents," said McPheters.

Who paid for the study, might you ask?

Boeing.

The Pentagon has not been able to rapidly adapt to a “war footing,” according to the Center for Public Integrity's new large-scale assessment of the Bush administration, titled “Broken Government.”

The nonpartisan organization's project is a digital report intended to provide “a comprehensive assessment of executive branch failures over the course of the Bush presidency.” It looks beyond the Defense Department to areas including education, health care, financial management and the environment, among many others.

In the Defense Department section, the Center for Public Integrity says the department “has often been unresponsive or slow to react to the needs of soldiers and Marines on the ground in Iraq and Afghanistan, as well as in the United States when they return.”

In particular, it notes the Pentagon's initially slow procurement of Mine Resistant Ambush Protected vehicles, something that’s in the news this week, again.

InsideDefense.com has reported extensively on DOD efforts to adapt its acquisition efforts to meet soldier requirements. Most recently, we wrote about Defense Secretary Robert Gates' call for changes to the Pentagon's acquisition system to make it more responsive to the needs of soldiers in theater.

The CPI report singles out Gates, who will stay on under President-elect Barack Obama, for praise.

“Gates made accountability and responsiveness to the current conflicts his signature,” the online project says. “For example, he made MRAP procurement the number one DOD acquisition priority.”

Just because the world's economy is down doesn't mean that the aerospace and defense industry is too, according to the Aerospace Industries Association.

As AIA President and CEO Marion Blakey told attendees at the association's annual year-end luncheon at the lavish Mayflower Hotel in downtown Washington today:

I’m happy to report that, despite the challenges to our economy, our industry had a strong year in 2008. Total sales are on pace to reach $204 billion, a new record for the fifth straight year. It also represents the seventh year of growth in the last eight years, which is even more remarkable when you consider the widespread financial difficulties in our economy. This figure represents an increase of 2.1 percent, which is less growth than we’ve seen in recent years. The main reason for the drop was not the tough economic atmosphere, but the work stoppage at Boeing that trickled down through the industry. We are more than satisfied that there was continued progress throughout the aerospace industry in 2008.

Like last year, our industry saw modest growth in every sector – civil aircraft, military aircraft, missiles, space and related products. This is noteworthy because over the years these sectors were often on different, distinct cycles. When civil aviation was up, military was usually down, and vice-versa. To see this balanced growth across the sectors again is a good sign for our industry.

As for the upcoming year, Blakey said the industry "is in good position to weather the financial storm" for several reasons:

One is that funding levels for two of our three sub-sectors – defense and space – are largely set for the next fiscal year. The defense appropriations bill for fiscal 2009 was part of the continuing resolution that passed in October. The same bill also provides funding for NASA through March at largely the same levels as fiscal 2008.

While ideally we would like to see increased investment in space exploration, it at least keeps a stable base for NASA funding. Much of the groundwork for the fiscal 2010 budget is being laid right now. And the long lead times on federal budgets mean that we anticipate funding levels to remain steady -- without any major adjustments -- for the next 18 months, or even longer.

That said, defense and aerospace are not necessarily "immune" to the current recession, according to Blakey:

There is some speculation out there that the defense budget will be a source for cutbacks in future years to pay for other needs.

Defense R&D funding is expected to decrease, and supplemental budgets are poised to go down. In civil aviation, orders have decreased, passenger traffic is down and the contracting credit market makes aircraft financing deals more difficult. On top of that, anticipated fleet recapitalization by U.S. airlines does not look like it will materialize in the near-term. And, of course, the bad economic environment has traveled around the globe, and the bulk of existing aircraft customers are foreign airlines.

And lest Congress sees the multibillion-dollar defense budget as a potential till from which to pay for other government programs:

Aerospace and defense should not become a bill-payer for other areas of the federal budget, which would hurt our economy in the long-term for some temporary relief elsewhere.

Our industry provides a strong economic foundation for much of our nation’s advanced technology and innovation, and that would suffer if we don’t make adequate, sustained investment. All this effort is to underscore the message that aerospace is a cornerstone of our economy, and it deserves sustained support from our elected leaders.

Members of a U.S. Central Command-led team charged with undertaking a comprehensive review of the command's strategy were scheduled to arrive in Afghanistan late last week to hear from military personnel and diplomats about the situation on the ground there, we're told.

A CENTCOM spokeswoman today declined to confirm or deny plans for the trip, citing security reasons. Officials are keeping a tight lid on the details surrounding the group so members can conduct a "fair and impartial" assessment, said Air Force Maj. Tina Barber-Matthew.

The assessment, led by CENTCOM deputy commander Marine Corps Lt. Gen. John Allen, is slated to produce a report for command chief Gen. David Petraus by February, she added.

Meanwhile, officials from United Kingdom are lending a helping hand in the effort, records show.

British Member of Parliament Keith Simpson recently asked government officials about what exactly his country's involvement is in the drill, according to a Nov. 26 edition of the "Hansard" parliamentary transcript service, which is available online.

Gillian Merron, a parliamentary under-secretary of state for the Foreign Office, told Simpson this:

US General David Petraeus established a Central Command (CENTCOM) Assessment Team (CAT) which began on 4 November and is due to conclude in February 2009. Its aim is to conduct a comprehensive assessment of the CENTCOM area of operations -- which spans the greater Middle East and parts of Asia, including Afghanistan and Pakistan.

The UK was asked to contribute to the review of American defence and security policy during September 2008. Participation in the review is part of the important bilateral relationship with the US. Some costs are being met by CENTCOM while other costs, including salary, will be covered by individual departments. We will write to the hon. Member separately with details. The UK is a key partner in the ongoing international coalition aiming to bring security and stability to this area. The CAT is an integral part of this effort and the UK therefore has a responsibility to participate.

The UK team is drawn from a range of thematic and geographical experience with two personnel from the ((Foreign and Commonwealth Office)), one person from ((the Department for International Development)) and 14 personnel from the ((Ministry of Defence)) and military. The FCO does not routinely release the names of individuals. The UK team began work in the CAT on 4 November following preparation in Whitehall within the policy and research community.

The UK objective for participation is to share our views, and learn those of others, across a very broad spectrum of issues concerning the provision of security, the rule of law and other issues of current global concern. The UK will contribute to a wide discussion and will not publish their contribution separately.

Bill Rammell, minister of state for foreign and commonwealth affairs in the Foreign Office, wrote this:

The US-led Central Command (CENTCOM) Assessment Team (CAT) will conduct a comprehensive assessment of the CENTCOM area of operations, drawing on US interagency and international partner expertise. The US has invited the UK and other nations to participate. The assessment will include visits by members of the CAT, including UK team members, to Afghanistan for consultation with the Government of Afghanistan and its officials.

Barber-Matthew, the CENTCOM spokeswoman, declined to identify additional countries participating in the assessment.

As if the incoming Obama administration doesn't already have enough on its plate -- with forecasts of a protracted and deep recession, a half-million workers knocked off the payrolls last month, and the Big Three automakers on the brink of insolvency -- a new Army War College monograph warns that the new leadership team should brace in its early days for a challenge akin to the Sept. 11, 2001, terrorist attacks.

That's the the advice of Nathan Freier, visiting professor of strategy, policy, and risk assessment at the U.S. Army’s Peacekeeping and Stability Operations Institute and a senior fellow in the International Security Program at the Center for Strategic and International Studies (CSIS).

Just as President George W. Bush faced a strategic shock in his first eight months, President-elect Barack Obama “would be well-advised to expect the same,” writes Freier, a retired Army lieutenant colonel who worked in the Office of the Secretary of Defense preparing the 2005 National Defense Strategy.

Defense-relevant strategic shocks jolt convention to such an extent that they force sudden, unanticipated change in the Department of Defense’s perceptions about threat, vulnerability, and strategic response. Their unanticipated onset forces the entire defense enterprise to reorient and restructure institutions, employ capabilities in unexpected ways, and confront challenges that are fundamentally different than those routinely considered in defense calculations...

They will rise from an analytical no man’s land separating well-considered, stock and trade defense contingencies and pure defense speculation. Their origin is most likely to be in irregular, catastrophic, and hybrid threats of “purpose” (emerging from hostile design) or threats of 'context' (emerging in the absence of hostile purpose or design). Of the two, the latter is both the least understood and the most dangerous.

The 2008 National Defense Strategy, singed by Defense Secretary Robert Gates in June, warns that strategic shocks “could potentially change the rules of the game and require a fundamental re-appraisal of the strategy.”

For more than two years, the Pentagon’s policy shop has spearheaded a project examining “trends and shocks” looking across a range of non-military disciplines for hints of where the next set of challenges that might require a military response could come from.

In September 2007, we explored that construct, which is poised to play a pivotal role in the 2010 Quadrennial Defense Review, now that Defense Secretary Robert Gates will continue to head the Pentagon during the Obama administration:

The project, led by Thomas Mahnken, deputy assistant secretary of defense for policy planning in the Pentagon’s policy shop, has been endorsed by Deputy Defense Secretary Gordon England. The goal is to assess the potential defense implications of consequential events -- “shocks” -- that could include major changes in global climate, a nuclear attack against a major western city, a new technology revolution or a financial market collapse that triggers a global depression.

“It really is an effort to get the department to think about long-term trends, particularly those the department hasn’t thought about systematically in the past, and explore their implications for the department,” said a senior Pentagon official in a July (2007) interview with InsideDefense.com.

The Federation of American Scientists reports today that surface-to-air missiles, including man-portable air-defense systems (MANPADS), are still being found in weapons caches in Iraq. These shoulder-launched missiles can be used to shoot down low-flying aircraft like helicopters.

After analyzing U.S. military press releases and media reports, FAS determined that at least 121 surface-to-air missiles and four additional launchers have been recovered by U.S. and Iraqi forces. Of these, at least 91, or 73 percent, are identified as Soviet-designed, Warsaw Pact missiles.

The prevalence of these missiles is no surprise because it is well known that Saddam Hussein stockpiled thousands of these types of weapons and that after his regime collapsed, they were looted from government depots, states the report.

Missiles produced by other countries have also been found in Iraq, according to FAS, but in much smaller numbers. There have been two public reports of Iranian MANPADS, the Misagh-1 missile, being discovered.

The good news: No reports of western missiles turning up in Iraq, suggesting that current U.S. and European export controls on MANPADS are "fairly effective," writes FAS.

"Western governments are also, generally speaking, more discriminating regarding whom they sell MANPADS to and what they demand of importers," states the report. "The, U.S. for example, conducts 100 percent on-site physical inventories by serial number of nearly all exported Stinger missiles."

However, the report notes that despite these controls western missiles still find their way to the black market, citing how the CIA lost control of hundreds of missiles it had given to the Mujahideen in Afghanistan in the 1980s.

Despite this analysis, it is still unclear how many illicit missiles are still in circulation in Iraq, writes FAS. The number of missiles seized in raids has held steady over the past two years, but the report suggests that this may have more to do with stepped-up neighborhood patrols than the total number of missiles.

What is definitely down is the number of aircraft crashes resulting from missile attacks and ground fire, according to the report.

"The threat persists, however, as evidenced by reports of missile launches at a C-130 cargo plane carrying a Congressional delegation in August 2007 and at an Apache helicopter flying over Sadr City in May 2008," it states.