The Insider

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February 3, 2009 at 5:00 AM

Listening to Pentagon Spokesman Geoff Morrell's comments at the Defense Department podium this afternoon, one might be left with the impression that DOD was largely looking to shift recurring war costs to the base budget last year when the Office of the Secretary of Defense and the top brass tacked on roughly $60 billion to a draft fiscal year 2010 budget request:

There was an internal exercise done on budgeting matters.

And it reflected two things that are important to note, or three things: number one, the notion of 4 percent of GDP being dedicated to defense spending; number two, trying to be responsive to the desires of the Congress that more and more supplemental spending be moved into the base budget -- and by that, I'm speaking of things like Wounded Warrior, the JIEDDO program, you know, Army and Marine Corps growth, as well as some operational spending to reflect sort of the persistent-presence reality that we find ourselves in; and lastly, and most importantly, it was done at a time in which you could probably go through such an exercise.

That is not exactly a full accounting of the increase the Pentagon sought to allocate to itself last year, in incorporating $57 billion in extra spending on top of the $523 billion which the Bush White House Office of Management and Budget authorized the Pentagon for FY-10.

In fact, recurring war costs amount for probably less than $10 billion of the amount. More than $20 billion would go to fund new aircraft and other weapons, and the largest portion -- more than $30 billion -- would finance activities related to the “long war,” including a boost for JIEDDO. These “long war” spending targets would pay for “presence” missions by all the services that presumed policies on Afghanistan and Iraq by the Obama administration.

For more details on where the Pentagon was planning to spend the extra money, see this story from last fall. We also reported last fall how the $57 billion boost was an effort to boost an inflation-adjusted defense spending plan advanced by the Bush administration built last year that was set to shrink through FY-13.

Last week OMB directed the Pentagon to build its FY-10 budget to the $523 billion topline set by the Bush administration, guidance that will force the Defense Department, in the words of one military official, to “rip the guts” out of the detailed spending proposal prepared for the Obama administration. Morrell said the Pentagon is backing away from its bid to push the FY-10 base budget north of $580 billion.

So this department is well aware of the fact that times are tough, and we are prepared to do the belt-tightening that is required and responsible of us.

He added:

The reality is, the economic situation has deteriorated dramatically since we undertook that exercise, and you can -- we today can probably not be as ambitious as we were in that exercise in moving funding from supplementals into the base budget. But that was an internal exercise, not a proposed budget, and not a starting-off point for any negotiations.

-- Jason Sherman

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February 2, 2009 at 5:00 AM

So, what’s the next big thing for the Navy?

That was the question asked last year by the “Navy’s Next Big Thing subcommittee” of the Chief of Naval Operations’ Executive Panel. What’s that, you ask? Like the Defense Science Board, it’s a board of outside advisers set up under the Federal Advisory Committee Act -- a law designed to ensure the public has a means of seeing what such advisory panels do.

Unless, of course, it’s classified. As are the Next Big Things, apparently; last October the subcommittee met in closed session to talk about “what actual threats and opportunities are ‘Navy’s Next Big Things’ for the United States Navy in terms of ‘game changers’ and technology disruptors.

Got that?

They also talked about “ways to ameliorate the effects of these ‘Navy’s Next Big Things’ or to develop/enhance them for Navy’s own use.”

And that’s the sum total of what the Navy deems it appropriate for the public to know about that meeting, according to the official minutes. Though to be fair, they do tell you who was there.

-- Dan Dupont

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February 2, 2009 at 5:00 AM

In one of his last acts as director of the Missile Defense Agency last November, Lt. Gen. Trey Obering (now retired) signed out a new testing plan for the agency. We recently got hold of the plan, which Obering signed Nov. 21.

The new plan cancels out what had been the agency's testing roadmap that had been in place since March 2005. In response to questions posed by InsideDefense.com, MDA said the change was made “to reflect the natural evolution of the agency's testing policy, which has occurred with the maturation of the ((ballistic missile defense)) system.”

The document makes it clear that the MDA director -- now Lt. Gen. Patrick O'Reilly -- is fully in charge of agency testing. All testing issues and decisions flow through him. The new policy, though, sets up a three-headed body consisting of a deputy for test, a deputy for engineering and a mission director to shepherd each test through five different stages: test event requirements phase; test event planning and design phase; test event readiness phase; test event execution phase; and test event analysis and evaluation phase.

MDA tells us the deputy for test is Air Force Maj. Gen. Chris Anzalone. The new deputy for engineering is Keith Englander. O'Reilly will appoint a mission director for specific tests. Interestingly, the deputy for test is in charge of only the test event and planning phase. The deputy for engineering is in charge of the requirements phase (the first phase in the process) and the analysis and evaluation phase (the final phase). The mission director is in charge of the readiness phase (the third of the five phases).

Despite the title, the deputy for test assumes a supporting role during four of the five phases, MDA tells us. 

Exceptions are made for test events in which the (deputy) for test is also the mission director. For these tests, the (deputy) for test has the primary responsibility for the test event, planning and design phase, the test event readiness phase and the test event execution phase.

 Philip Coyle was in charge of the Pentagon independent operational testing office during the Clinton administration. He told us the new MDA testing organization looks “very flat” and has everything running through O'Reilly. 

"This puts the director in the position of managing every little detail, and nearly every decision of any consequence ends up having to go to the director," he says. "The Missile Defense Agency is too large for that."

Coyle has some questions about the deputy for test/engineering/mission director setup, too.

I understand that MDA tests can be quite expensive, but breaking each one into five parts and then having a troika of three deputies manage each of those five parts separately from the others is unnecessarily complicated. Yes, I'm sure MDA will tell you that those three managers in the troika must coordinate, and let's hope they do because otherwise this new organization will be dysfunctional.

 MDA told us that every test carried out since the new policy was signed has been done so under the new setup: “Some tailoring was accomplished to ensure continuity and efficiency of work that was already in progress.”

-- Thomas Duffy

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January 30, 2009 at 5:00 AM

The Pentagon's latest 39-page 2009 Quadrennial Roles and Missions Review, released yesterday, is notable for numerous reasons, including this oddity: It does not specifically mention the Navy or Marine Corps in the text.

This may bear repeating: In a congressionally mandated report the defense secretary says "lays a foundation for understanding the department's roles and responsibilties in today's complex security environment," the words "Navy" and "Marine Corps" do not appear (save for photo credits, a photo caption and one "Navy" in a chart).

And in case you are wondering, both the Army and the Air Force are cited in the text of the thing many times.

-- Zachary M. Peterson

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January 30, 2009 at 5:00 AM

The Defense Department's budget presentation, which usually happens on the first Monday in February, has been postponed. Though this was expected, we decided to check with the good Pentagon press folks just to make sure.

While there won't be a budget briefing on Monday, we might see information in February about a bare-bones kind of defense budget request that would essentially amount to an unveiling of the Office of Management and Budget's topline for the Pentagon, DOD spokesman Cmdr. Darryn James told us.

The detailed defense budget, then, will be presented to the public sometime in April, he said.

-- Sebastian Sprenger

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January 30, 2009 at 5:00 AM

After more than a year's worth of discussions, Air Force officials have decided to scrap their once-vaunted plan to build a multibillion-dollar coal-to-liquids (CTL) synthetic jet fuel refinery at Malmstrom Air Force Base in Montana.

Service officials claim the decision not to move forward with the privately owned plant was spurred by security concerns surrounding the base's role as home to dozens of Minuteman III ICBMs.

“The Air Force reviews cited possible conflicts with the wing's mission, including degradation of security in the vicinity of weapons storage area; interference with existing missile transportation operations; and issues with explosive safety arcs and operational flight safety,” the service said in a Jan. 29 statement.

The Air Force was supposed to make a decision on whether to build the plant on Jan. 16 after reviewing bids from industry vying to build the facility. The service delayed this decision by two weeks due to “technical issues and clarifications.”

The plant would have provided the Air Force with coal-based synthetic jet fuel at a significant discount in exchange for an inexpensive lease on the Air Force property. However, Congress has barred the service from buying large quantities of the fuel because its production pollutes far more than standard jet fuel. CTL industry officials have long maintained that they would need long-term contracts from the Air Force to offset the mammoth start-up costs associated with building and operating coal-to-liquids refineries.

Coal lobbyists tried unsuccessfully this year to get this ban overturned. They claim “clean coal” technology is right around the corner. Interestingly enough, the Air Force just announced a brand-new effort to certify its planes to fly on algae-based biofuels -- just as it's been doing with coal-based synthetic fuel for the last few years.

Questions remain: Did this have anything to do with the decision to abandon the Malmstrom CTL project? Also: What does the decision mean for the overall health of the service's plan to fly half its stateside missions using CTL fuel by 2016?

-- John Reed
 

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January 29, 2009 at 5:00 AM

Defense Secretary Robert Gates today sent Congress the Pentagon's 2009 Quadrennial Roles and Missions Review Report, an assessment that examines the division of labor among the services in a number of areas, including: irregular warfare, cyberspace operations, unmanned aircraft systems, and intratheater airlift.

We'll have a story on the entire 39-page report soon. Meantime, here are some of the conclusions Gates highlights in the foreword:

Together, we have concluded the Department must improve how we organize, train and equip our forces for these areas.

And Gates points to a finding that is clearly in step with President Obama's stated goal of beefing up the civilian side of the government to support national interests overseas (italics added).

One of the most important lessons from recent operations is that military success does not equate to victory. As a result, during the Quadrennial Roles and Missions Review we considered opportunities that will help strike a better balance between our nation's hard and soft power capabilities.

The Quadrennial Roles and Missions Review concludes we must improve our soft power: our national ability to promote economic development, institution-building and the rule of law, internal reconciliation, good governance, training and equipping indigenous military and policy forces, strategic communications, and more. Doing so requires exploring whole-of-government approaches for meeting complex security challenges.

-- Jason Sherman

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January 29, 2009 at 5:00 AM

Reports of new directions from NATO's top general about the conduct of counterdrug operations in Afghanistan have begun making huge waves in Germany.

According to the German news magazine Der Spiegel, U.S. Army Gen. Bantz Craddock earlier this month issued secret guidance instructing commanders in Afghanistan "to attack directly drug producers and facilities" in that country.

According to the document, deadly force is to be used even in those cases where there is no proof that suspects are actively engaged in the armed resistance against the Afghanistan government or against Western troops. It is "no longer necessary to produce intelligence or other evidence that each particular drug trafficker or narcotics facility in Afghanistan meets the criteria of being a military objective," Craddock writes.

The article further says ISAF Commander Gen. David McKiernan, also an American, already has signaled he would not follow Craddock's order.

McKiernan's recent statements indicate he objects to overly heavy-handed military action in the campaign against insurgents in Afghanistan.

In response to the Spiegel article, NATO Secretary-General Jaap de Hopp Scheffer announced today he had initiated an investigation into the leak of the classified guidance document to the magazine reporter.

Whether or not the Spiegel's reporting is accurate, German politicians are up in arms about it, according to a follow-up story posted on the magazine's Web site today.

What the European media might not know is that Craddock actually mentioned his new counterdrug guidance during a breakfast with reporters in Washington earlier this month. That Jan. 9 breakfast took place only days after he transmitted the guidance document to senior NATO commanders.

His comments offer some much-needed nuance to what could become a major debate in the days ahead.

In essence, Craddock argued, decisions reached at an October 2008 NATO defense ministerial in Budapest, Hungary, changed the game for NATO counterdrug operations. Coalition forces, previously restricted to providing logistical and intelligence support to Afghan-led counterdrug missions, now are allowed to act in a leading role, Craddock said.

"We asked for authorities to be able to attack their facilities . . . where the value is added ((by)) turning poppies to . . . heroin, and the facilitators, the traffickers, who move the drugs from the labs out of the country," Craddock said. "We were granted that authority."

"There's now work in progress to translate that authority into implementation procedures. The guidance has been issued. I have done that. Now we have to move that into new plans and operations to be able to intercept, intercede, destroy facilities ((and)) precursor chemicals" imported from outside the country, Craddock said.

-- Sebastian Sprenger

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January 28, 2009 at 5:00 AM

EADS North America announced today that it will not compete to build the Air Force's VC-25 replacement, better know as Air Force One, opting to focus on the more lucrative next-generation tanker competition.

Earlier this month, the Air Force put out feelers to industry to determine interest in building the next presidential transport aircraft. The Jan. 7 notice to industry states that an Air Force analysis of alternatives has determined it would be less costly to replace the service’s VC-25s in the next decade instead of trying to maintain the aging Boeing 747-200 jets, mainly because part suppliers no longer exist and maintenance times are increasing.

Some in the defense community believed another Boeing-Airbus showdown was in the works, similar to the Air Force's stalled tanker competition.

But it appears top EADS officials have opted against bidding to build less than a handful VC-25s when they can instead focus on selling nearly 180 KC-X aircraft. Below is a copy of an e-mail sent to reporters this morning about EADS decision to abandon the Air Force One competition:

In 2007 at the USAF’s request, EADS North America provided technical information and answered questions regarding several Airbus widebody commercial aircraft as the service conducted its Analysis of Alternatives (AoA) to recapitalize the current fleet of presidential aircraft.

EADS North America’s strategy for growth in the US is based on bringing value to the US warfighter; making industrial investments in the US and insourcing high technology defense and aerospace jobs. After careful review, we’ve determined that participation in the AF-1 program will not help us meet these business objectives."

Though the company will not respond to this RFI, we remain focused on once again winning the KC-X competition with Northrop Grumman, delivering the UH-72A LUH to the US Army and meeting the needs of our US defense and homeland security customers.

We reiterate our strong commitment to the US Department of Defense and to supporting the warfighter with our products and services.

-- Marcus Weisgerber

By
January 28, 2009 at 5:00 AM

Despite a slumping economy, Boeing's Integrated Defense Systems business unit expects 2009 revenues to grow to between $33 billion and $34 billion, compared with $32 billion in 2008.

That said, Boeing is "expecting pressure on defense budgets in light of the economic recovery and financial rescue packages put forth by various governments,” CEO Jim McNerney told Wall Street analysts and journalists during a conference call this morning.

While it's hard for us to know the final impact of all of this, we can and must prepare for the continued market uncertainty while ensuring our ability to fund our growth initiatives. In that regard, we have stepped up our drive to get more competitive and productive. We are being evermore aggressive in managing both costs and investments. Specific actions we are taking include streamlining organizational structures, reducing discretionary and capital spending, eliminating unnecessary work and reviewing staffing levels, all to drive higher levels of productivity.

Boeing IDS reported fourth-quarter 2008 revenues of $8 billion and operating margins of $11 percent, "reflecting strong program performance across IDS's balanced portfolio of programs," a company statement reads. Boeing's overall fourth-quarter 2008 revenues declined by 27 percent to $12.7 billion due to a machinists' strike that ended in November.

-- John Liang

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January 28, 2009 at 5:00 AM

Retired Adm. Dennis Blair's nomination to be the next director of national intelligence has leaped its first hurdle now that the Senate Intelligence Committee has unanimously approved President Obama's pick.

“Adm. Blair is exceptionally well-qualified to lead America’s intelligence community, and I believe he will be an outstanding Director of National Intelligence,” committee Chairwoman Dianne Feinstein (D-CA) said in a statement today. “He has pledged to work closely with the committee, and with Congress, to build a relationship of trust and candor. I am convinced that he will ensure that we are true to our ideals as we gather the intelligence necessary to provide for our national security.”

On Jan. 22, the committee held a hearing on Blair’s nomination. At that hearing, Blair proposed legislation to partially eliminate legal barriers between military and intelligence matters. As InsideDefense.com reported:

Blair told panel members he would support the creation of so-called “Title 60” legislation, which would provide the legal basis for oversight and execution of programs that overlap between military and intelligence matters. . . .

Title 10 of the U.S. Code provides the legal guidance for all U.S. military activities. Title 50 is the governing statute that sets legal parameters for the intelligence community. But the legal mandates Title 10 and Title 50 construct have been outpaced by the unique national security needs posed by the ongoing global war on terrorism, Blair said.

The creation of Title 60 legislation would help meet those unique challenges and eliminate many of the bureaucratic hurdles the current titles pose, he added.

“I really think we need a Title ((60)). I think we need to get rid of this artificial division in this global campaign against terrorists when the tools that are available in the Department of Defense and the intelligence agency are both applicable and both need to be put together to get the job done,” Blair said.

Blair’s confirmation before the full Senate is expected soon, according to the statement.

-- John Liang
 

By
January 28, 2009 at 5:00 AM

President Obama just wrapped up a nearly two hour meeting at the Pentagon with the Joint Chiefs. Here is an initial read on the events from a press pool report filed by Jon Ward of the Washington Times:

Potus promises "difficult decisions" ahead on Iraq and
Afghanistan and says he will improve support for the military.

"We're going to have some difficult decisions that we're going to have
to make.," he said.

Most of his remarks were about support for the military and easing the
strain...

"We have for a long time put enormous pressure on our military to carry
out a whole set of missions sometimes not with the kind of strategic
support and use of all aspects of American power to make sure they're
not carrying the full load. And that's something I talked to the joint
chiefs about and something I intend to change," said Potus.

At 5:01, one hour and 52 minutes after his arrival, POTUS emerged from
the Tank and walked down the Joint Chief's corridor, where the offices
for the mil commanders are housed on the Pentagon's north side. Roughly
60 military personnel who work at the Pentagon, wearing uniforms from
all branches, had lined up on both sides of the hall to greet him.

Potus and Vpotus shook hands with the mil folks for about four minutes,
walking toward the pool, which was at the far end of the hall, giving
photogs a nice picture to make.

Potus could be heard asking people where they were from (Indiana?), and
talking with one woman about her pregnancy.

Potus also remained fascinated with the DC region's inability to handle
the winter weather.

"Aren't you a little surprised that they canceled school for my kids?"
he asked someone.

Other banter.

"Very nice to see you sir. Thank you for your service," he said to
another.

"I know south carolina, I did a lot of campaigning there," he said,
eliciting some laughter from the otherwise quiet hall, where the mil
personnel stood loosely but at attention.

By the time Potus had made his way down the left side, Gates and the
chiefs were in the hall. Gates shook a few hands but kind of just
followed Potus.

Potus then walked to sticks and spoke for a few minutes, with VPotus and
chiefs behind him. Transcript should be coming soon.

He apologized for being late -- "we kind of lost track of time" -- and
thanked the military for their service.

He said in addition to iraq and afghanistan, he and the chiefs talked
about "broader global risks that may arise" and how military and
civilian assets should cooperate in response.

And fyi, Potus' national security advisor, Gen. James Jones, was in the
meeting.

Potus then talked about the "health of the force" and giving more
support for vets and their families and promised his "full support."

He then turned and walked down the right side to greet the soldiers he
had not yet shaken hands with.

Motorcade rolled at 5:27 and arrived at the White House at 5:36. Potus
went into the Oval.

-- Jason Sherman

By
January 28, 2009 at 5:00 AM

.... and here's Obama's statement from the Pentagon after meeting with the Defense Department's top brass:

Sorry we're running a little bit late. I want to, first of all, thank all the men and women in uniform who are represented here. They are the best that this country has to offer. And the first thing I said to the Joint Chiefs in this meeting was how grateful we are for their service. The sacrifices that they and their families make are what are responsible for our freedoms, that sometimes we take for granted.

And as Commander-in-Chief on of my principal goals during my presidency is going to be to make sure that they have the resources and the support that they need to carry out the critical missions that keep our nation safe each and every day.

I had a wonderful discussion with the Joint Chiefs -- we kind of lost track of time -- about a range of issues facing our military, as well as the threats that face this nation, both short-term and long-term. We had discussions about Iraq, as well as Afghanistan. We talked about some of the broader global risks that may arise and the kind of planning and coordination that's going to be required between our military and our civilian forces in order to accomplish our long-term national security objectives.

We also talked about making sure that the health of our force is always in our sights. And I know that all the Chiefs that are represented here, as well as Secretary Gates, are constantly thinking about what we need to do to make sure that people who are in uniform for the United States are getting the kinds of support that they need and that their families are getting the support that they need. And that's something that I'm absolutely committed to, and I know that Vice President Biden is, as well.

We're going to have some difficult decisions that we're going to have to make surrounding Iraq and Afghanistan, most immediately. Obviously, our efforts to continue to go after extremist organizations that would do harm to the homeland is uppermost on our minds. I have every confidence that our military is going to do their job, and I intend to make sure that the civilian side of the ledger does its job to support what they are doing.

We had for a long time put enormous pressure on our military to carry out a whole set of missions, sometimes not with the sort of strategic support and the use of all aspects of American power to make sure that they're not carrying the full load. And that's something that I spoke with the Chiefs about and that I intend to change as President of the United States.

So, again, my first message was to say thank you. And in addition, it's to say that you -- all of you who are serving in the United States Armed Forces are going to have my full support, and one of my duties as President is going to be to make sure that you have what you need to accomplish your missions, and we are grateful to you.

So, all right. Thank you, guys; I'm going to shake some more hands.

-- Jason Sherman

By
January 27, 2009 at 5:00 AM

Defense Secretary Robert Gates is testifying right now before the Senate Armed Services Committee.

We'll have more on this as the day progresses, but for now, you can listen live here.

And we have Gates' prepared testimony posted. We'll have the Q&A later.

-- Dan Dupont

By
January 27, 2009 at 5:00 AM

President Barack Obama plans to visit the Pentagon tomorrow to meet with the Joint Chiefs and discuss the U.S. operation in Afghanistan, Defense Secretary Robert Gates told the Senate Armed Services Committee, pinpointing the timing of the POTUS trip to the Defense Department which was widely expected sometime this week.

-- Jason Sherman