The Insider

ICBM Issues
By John Liang
January 11, 2013 at 4:15 PM

Inside the Air Force reports today that the service's intercontinental ballistic missile community this winter completed a successful operational test and is planning to award a broad ICBM sustainment contract. Also, most recently, the service issued an initial solicitation for white papers on the future of the ground-based leg of the nuclear triad:

The Minuteman III is the lone operational ICBM in the Air Force's arsenal and is programmed to remain in service until 2030. To that end, the service recently announced the successful completion of a November test from Vandenberg Air Force Base, CA, while at the same time moving ahead on more forward-looking acquisition initiatives.

The Air Force has yet to decide whether to modernize the Minuteman III to keep it viable past 2030 or replace it altogether, and to gather ideas on both possibilities, the service issued a Jan. 7 broad agency announcement calling for white papers from industry. At this early stage, a future ICBM solution is being referred to as the Ground-Based Strategic Deterrent, or GBSD.

"This BAA initiates a request for analysis, refinement, and technical amplification of concepts designed to satisfy the GBSD capabilities with an operational life of 2025-2075 time frame," the document states. "Concepts are requested to address the GBSD weapon system-of-systems, to include the payload delivery vehicle, warhead integration, basing, and nuclear command, control and communications starting at message receipt. Underlying considerations should be a modular, open systems architecture ('Plug and Play') and commonality with Intercontinental Ballistic Missiles (ICBM), Submarine-launched Ballistic Missiles (SLBM), Prompt Global Strike/Conventional Strike Missile, and space launch vehicles."

Based on previous interaction with industry and internal research, the Air Force has created five broad classes of concepts for future ICBMs. They are: the continued use of today's Minuteman III with "no deliberate attempt" to close capability gaps; the "current fixed" concept, which would modernize existing missiles and continue using current silos; "new fixed," which would develop a replacement missile to be kept in a new, super-hardened silo; "mobile," which would develop a new ICBM to be employed off of a mobile platform called a transporter erector launcher; and "tunnel," described in the BAA as a subway system for launching ICBMs.

White papers are due Feb. 8, and contract awards -- multiple awards are possible -- are anticipated in late March. The Air Force has $3 million available for this GBSD BAA, and awardees will have six months to perform their studies, according to the document.

House and Senate authorization conferees had language on strategic delivery systems in the final version of the fiscal year 2013 defense policy conference bill that President Obama signed into law last week:

The Senate amendment contained a provision (sec. 1071) that would require the President to certify to the congressional defense committees whether plans to modernize strategic delivery systems are funded at a level equal to or more than that outlined in the November 2010 update to the plan found in section 1251 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84). If the level of funding is less than that referred to in the November 2010 update, then the President must submit as part of the reporting requirements under section 1043 of the National Defense Authorization Act for Fiscal Year 2012 (Public Law 112-81), his assessment of whether a lack of full funding will result in a loss of military capability. If the President determines that the lack of full funding will result in a loss of military capability, he must submit with the section 1043 report a plan to preserve or retain the capability that would be lost, and a report that assesses the impact of the lack of full funding and a description of the funding required to restore the capability.

The House bill contained a similar provision (sec. 1055) that would require the President to certify annually whether plans to modernize or replace strategic delivery systems are fully resourced and being executed at a level equal to or more than the levels set forth in the November 2010 update to the plan referred to in section 1251 of Public Law 111-84. The section would further prohibit the use of funds to reduce, convert, or eliminate strategic delivery systems as a result of the New START treaty or otherwise unless the President is able to issue the required certification.

The House recedes with an amendment that would require the President to certify annually to the congressional defense committees whether plans to replace or modernize strategic delivery systems are funded at levels equal that under the November 2010 update to section 1251 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84). If before fiscal year 2020, the President reports that the plan to modernize the strategic delivery systems is not fully funded according to the November 2010 update, the President shall include with the report to Congress under section 1043 of Public Law 112-81 a determination whether the lack of funding will result in a loss of military capability as compared to the November 2010 update. If the determination is made that a lack of full funding will result in a loss of military capability, the President shall include with the report under section 1043 of Public Law 112-81, a plan to preserve the military capability that would be lost, an assessment of the impact of the lack of full funding on the strategic delivery systems, and a description of the funding required to restore military capability. The President must certify a commitment to accomplishing the modernization and replacement of strategic delivery systems and the political obligations concerning nuclear modernization as set forth in declaration 12 of the Resolution of Advice and Consent to Ratification of the New START treaty.

The amendment also requires that the President make the certification regarding full funding for the strategic delivery systems under the November 2010 update to the section 1251 plan not less than 60 days before the date on which the President carries out any proposed reduction to the strategic delivery systems along with any additional reporting matters described in this section. In addition, the President must certify to the congressional defense committees that the Russian Federation is in compliance with its arms control obligations with the United States.

China Watching
By John Liang
January 10, 2013 at 4:29 PM

The Chinese government this week said it is "deeply disappointed and dissatisfied" that recent U.S. defense legislation relaxing export controls on satellites and related items excluded any benefit for China, according to a Jan. 6 statement by Ministry of Commerce spokesman Shen Danyang. As China Trade Extra reported yesterday:

In the 2013 National Defense Authorization Act (NDAA), which President Obama signed into law on Jan. 2, a provision gives back to the president the authority to move all satellites and related items from the U.S. Munitions List (USML), where even commercial satellites are considered military items, to the less-stringent Commerce Control List (CCL), provided they are not exported, re-exported or transferred directly or indirectly to China, North Korea or any country listed as a state-sponsor of terrorism.

The law also prohibits any satellite or related item to be launched from China or any restricted country or as part of a launch vehicle owned by the governments of one of these countries. The restrictions against China and other countries can be waived by the president if it is determined to be in the national interests of the United States.

Shen argued that China is "always exclude[d]" from the benefits of the U.S. export control reform initiative and the new measures will continue to "restrict China-U.S. Cooperation [in the] civil satellite field."

However, observers have said it would have been politically impractical to not exclude China from the NDAA provision due to the fact that a 1998 illegal diversion scandal involving China was the reason Congress revoked the president's authority over satellites in the first place.

Getting Congress to return the president's authority over satellites is one piece of the broader reform effort, which aims to move thousands of less significant items off the USML, primarily parts and components, to the CCL where they can be more easily exported to close allies.

The Obama administration has stressed that China will only benefit from the reform effort insofar as the export of a an item transferred to the CCL does not violate a rule that prohibits the sale of a dual-use item if it is intended entirely or in part for a military end use. There is a blanket prohibition on the export of any USML item to China.

U.S. officials have argued that the benefits China receives from the reform effort will be limited because most items transferred to the CCL will be “specially designed” for military end items on the USML, but not critical enough to remain under tighter USML controls. As a result, most of these items will not have a civilian end use and will not be eligible for export to China.

Despite this argument, Shen, in his statement, said the Chinese government hopes the U.S. can "change the discriminatory conducts against China, and pay attention to and address China's concerns and materially relax export control against China in its export control reform."

CFIUS Challenges
By John Liang
January 9, 2013 at 8:17 PM

The U.S. intelligence community believes with "moderate confidence" that there is likely a "coordinated strategy" to acquire U.S. companies involved with critical technologies by one or multiple foreign companies or governments, according to the latest unclassified annual report of the Committee on Foreign Investment in the United States (CFIUS). As China Trade Extra reports this morning:

This is the first time that CFIUS has made this particular finding, although it has long been required by law to report on whether such a coordinated strategy to acquire critical technologies exists, according to CFIUS sources. CFIUS examines transactions that transfer control of a U.S. company to a foreign person to ensure they do not pose a national security risk.

Among the items considered to be critical technologies under the CFIUS statute are defense goods and services controlled on the U.S. Munitions List, certain items on the Commerce Control List, specially designed nuclear equipment and toxins.

The unclassified version of the report does not provide information on which specific entities are engaged in this coordinated strategy, although such a list is likely included in the classified version, according to a CFIUS lawyer. This lawyer said the finding could affect future transactions from the identified companies or governments, which could conceivably include China.

However, China was only linked to four planned and completed transactions involving critical technologies during 2011 out of a total of 120 such transactions that year, according to statistics published in the unclassified version of the report released Dec. 20. The United Kingdom had the most such transactions at 30.

View CFIUS' annual report to Congress.

Defining Homeland Security
By John Liang
January 9, 2013 at 6:43 PM

How do you define "homeland security?" The Congressional Research Service isn't so sure, according to a new report:

Ten years after the September 11, 2001, terrorist attacks, the U.S. government does not have a single definition for "homeland security." Currently, different strategic documents and mission statements offer varying missions that are derived from different homeland security definitions. Historically, the strategic documents framing national homeland security policy have included national strategies produced by the White House and documents developed by the Department of Homeland Security (DHS). Prior to the 2010 National Security Strategy, the 2002 and 2007 National Strategies for Homeland Security were the guiding documents produced by the White House. In 2011, the White House issued the National Strategy for Counterterrorism.

Having more than one definition for homeland security "may impede the development of a coherent national homeland security strategy, and may hamper the effectiveness of congressional oversight," CRS warns, adding:

Definitions and missions are part of strategy development. Policymakers develop strategy by identifying national interests, prioritizing goals to achieve those national interests, and arraying instruments of national power to achieve the national interests. Developing an effective homeland security strategy, however, may be complicated if the key concept of homeland security is not defined and its missions are not aligned and synchronized among different federal entities with homeland security responsibilities.

View the CRS report -- originally obtained by Secrecy News.

Governors On Guard
By John Liang
January 8, 2013 at 9:44 PM

Members of the National Governors Association and the Council of Governors are urging President Obama to include state National Guard representation on the National Commission on the Structure of the Air Force.

A provision in the Fiscal Year 2013 National Defense Authorization Act, signed into law by the president last week, mandated that representation.

"As you consider appointments, the nation's governors urge you to include senior National Guard leaders to represent states on the commission," the letter reads.

View the letter.

Sensors Session
By John Liang
January 8, 2013 at 4:10 PM

The Commerce Department's Industry and Security Bureau plans to hold a meeting of its Sensors and Instrumentation Technical Advisory Committee (SITAC) later this month, according to a notice published this morning in the Federal Register.

The SITAC, which will meet on Jan. 29 at 9:30 a.m., "advises the Office of the Assistant Secretary for Export Administration on technical questions that affect the level of export controls applicable to sensors and instrumentation equipment and technology," the notice states. The meeting's agenda is as follows:

Public Session

1. Welcome and Introductions.

2. Remarks from the Bureau of Industry and Security Management.

3. Industry Presentations.

4. New Business.

Closed Session

5. Discussion of matters determined to be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 2 Sec. Sec. 10(a)(1) and 10(a)(3).

Inside U.S. Trade reported in December that the Obama administration's export-control reform initiative will gain a boost -- with respect to satellite controls and the notification requirements for the removal of items from the U.S. Munitions List (USML) -- from the Fiscal Year 2013 National Defense Authorization Act that President Obama signed last week:

On satellites, the NDAA gives back to the president the authority to move all satellites and related items from the USML to the Commerce Control List (CCL), provided they are not exported, re-exported or transferred directly or indirectly to China, North Korea or any country listed as a state-sponsor of terrorism.

It also precludes any satellite or related item to be launched from any of these countries or as part of a launch vehicle owned by the governments of one of these countries. The president, however, can waive this prohibition on a case-by-case basis if he determines it is in the national interests of the U.S. to make the export and notifies the appropriate congressional committees about his determination.

Regarding the notification requirements, the final NDAA drops the language in the House version of the NDAA that would have required the administration to enumerate "to the extent practicable" the items it wants to move off the USML. The administration has long criticized this language as making it impossible to implement its overall export control reform initiative, and demanded that it be removed from the final NDAA bill.

The U.S. satellite industry supports the satellite language in the conference report, which was the result of negotiations that occurred among the administration and congressional staff in the House Foreign Affairs and Senate Foreign Relations Committees.

The legislation essentially repeals a provision in the NDAA for fiscal year 1999 that took the authority over satellite export control away from the president in the wake of a diversion scandal and returned all satellites and related items that had been transferred to the CCL back to the strict controls of the USML.

On Hagel, Brennan
By Christopher J. Castelli
January 7, 2013 at 7:08 PM

Former Sen. Chuck Hagel (R-NE) would be the first person of enlisted rank to serve as secretary of defense, one of the few secretaries who've been wounded in war and the first Vietnam veteran to lead the Defense Department, President Obama said today when nominating Hagel to succeed Leon Panetta as defense secretary.

"As a successful businessman, he also knows that even as we make tough fiscal choices, we have to do so wisely, guided by our strategy, and keep our military the strongest fighting force the world has ever known," Obama said. "Most importantly, Chuck knows that war is not an abstraction. He understands that sending young Americans to fight and bleed in the dirt and mud -- that's something we only do when it's absolutely necessary. My frame of reference, he said, is geared towards the guy at the bottom who's doing the fighting and the dying."

Senate Armed Services Committee Chairman Carl Levin (D-MI), who will oversee Hagel's confirmation hearing, praised the nomination. “Senator Hagel is well qualified to serve as secretary of defense with his broad experience in national security affairs," Levin said in a statement. "He was a decorated soldier and an effective member of the Senate, and he is a strong advocate for the men and women of our military. The Armed Services Committee will give prompt and careful consideration to Senator Hagel’s nomination for this critical position.”

Earlier today, committee member Sen. Jack Reed (D-RI) issued a statement praising Hagel: “Chuck Hagel will make an outstanding Secretary of Defense. He is highly qualified and his record of service to this country as a decorated combat veteran, successful CEO, senator, and statesman is extraordinary. Chuck is a man of uncommon independence and integrity. Chuck Hagel’s candor, judgment, and expertise will serve him well as our next Secretary of Defense. I fully support his confirmation.”

In a separate statement, Sen. Jim Inhofe (R-OK), the panel's top Republican, praised Panetta's leadership at the Pentagon but did not endorse Hagel. "In the months and years ahead, the Defense Department will be confronted with significant challenges from budget issues to Afghanistan policy," he said. "I worked with Senator Chuck Hagel in the Senate, and his nomination deserves to be fully vetted. The Armed Services Committee has a time-tested process to consider nominations, and I am committed to upholding that process. I am aware of the serious concerns about some of his policy positions, his record, and some of his comments that have been publically reported. I will be seeking clarification from him about these concerns as his nomination proceeds."

Regarding Obama's nomination of counterterrorism adviser John Brennan to head the CIA, Inhoffe said the administration "has an abysmal record of national security and intelligence leaks when it benefits the President’s agenda. And, the tragedy in Benghazi still pose many questions that have not been adequately answered for those of us in Congress and for the American people. As John Brennan’s nomination goes forward, the American people expect us to get answers on these and other subjects related to his nomination. I will be looking into his record more closely in the weeks ahead."

Sen. John McCain (R-AZ), who recently ended his tenure as the panel's top Republican, released his own statement on Hagel's nomination: “Chuck Hagel served our nation with honor in Vietnam and I congratulate him on this nomination. I have serious concerns about positions Senator Hagel has taken on a range of critical national security issues in recent years, which we will fully consider in the course of his confirmation process before the Senate Armed Services Committee.”

On Brennan’s nomination, McCain said, “I appreciate John Brennan’s long record of service to our nation, but I have many questions and concerns about his nomination to be Director of the Central Intelligence Agency, especially what role he played in the so-called enhanced interrogation programs while serving at the CIA during the last administration, as well as his public defense of those programs. I plan to examine this aspect of Mr. Brennan’s record very closely as I consider his nomination.”

Global Hawk Sale
By John Liang
January 7, 2013 at 5:44 PM

The Pentagon released a statement late last year announcing it had notified Congress of a proposed $1.2 billion sale to South Korea involving four Northrop Grumman-built Global Hawk aircraft and associated equipment.

According to the Defense Security Cooperation Agency statement:

The Republic of Korea (ROK) has requested a possible sale of four (4) RQ-4 Block 30 (I) Global Hawk Remotely Piloted Aircraft with the Enhanced Integrated Sensor Suite (EISS). The EISS includes infrared/electro-optical, synthetic aperture radar imagery and ground moving target indicator, mission control element, launch and recovery element, signals intelligence package, an imagery intelligence exploitation system, test equipment, ground support, operational flight test support, communications equipment, spare and repair parts, personnel training and training equipment, publications and technical data, U.S. Government and contractor technical and logistics support services, and other related elements of logistics support. The estimated cost is $1.2 billion.

The Republic of Korea is one of the major political and economic powers in East Asia and the Western Pacific and a key partner of the United States in ensuring peace and stability in that region.

The Republic of Korea needs this intelligence and surveillance capability to assume primary responsibility for intelligence gathering from the U.S. led Combined Forces Command in 2015. The proposed sale of the RQ-4 will maintain adequate intelligence, surveillance, and reconnaissance capabilities and will ensure the alliance is able to monitor and deter regional threats in 2015 and beyond. Korea will have no difficulty absorbing these systems into its armed forces.

For more unmanned systems news, check out InsideDefense.com's Unmanned Systems Alert.

And here are some more DSCA announcements that were released the same day:

DSCA Statement On Proposed $406M HIMARS, ATACMS, GMLRS Sale To Qatar
In a Dec. 24, 2012, statement, the Defense Security Cooperation Agency announces it has notified Congress of a proposed $406 million foreign military sale of rocket and missile systems to Qatar.

DSCA Statement On Proposed $140M Sidewinder Missile Sale To Turkey
In a Dec. 24, 2012, statement, the Defense Security Cooperation Agency announces it has notified Congress of a proposed $140 million foreign military sale of Sidewinder missiles to Turkey.

DSCA Statement On Proposed $125M VSAT Ops, Maintenance Sale To Iraq
In a Dec. 24, 2012, statement, the Defense Security Cooperation Agency announces it has notified Congress of a proposed $125 million foreign military sale of Very Small Aperture Terminal operations and maintenance services to Iraq.

H-60 Or Bust?
By Gabe Starosta
January 4, 2013 at 9:42 PM

Helicopter builder Sikorsky has decided to bid for the Air Force's Combat Rescue Helicopter program with a version of its H-60 aircraft, the likely favorite to win the competition.

Bids for the long-delayed CRH acquisition effort were due yesterday, and Sikorsky spokesman Frans Jurgens told InsideDefense.com today that the company has indeed responded to the solicitation. "I can confirm that Sikorsky submitted a bid for CRH. We are offering a fully compliant H-60 variant," he said in an email.

The Air Force plans to buy 112 CRH helicopters as a replacement for the aging, Sikorsky-made HH-60G Pave Hawk.

The company is very likely to be the only prime contractor to turn in a bid for CRH, as its top rivals announced last month that they would sit out the competition. Boeing, EADS-North America and a Northrop Grumman-AgustaWestland team all announced on the same day their decisions not to bid on the program, which is worth a maximum of $6.8 billion.

Strategic Shift
By John Liang
January 4, 2013 at 5:08 PM

The Obama administration's decision last year to refocus strategic efforts to the Pacific Rim could "significantly affect" U.S. special operations forces, according to a new Congressional Research Service report.

"USSOCOM leadership continues to pursue additional authorities that would enable it to control the movement of SOF units deployed to a theater of operations as well as give additional authorities to Theater Special Operations Commands (TSOCs), which are allocated to each geographic combatant command," the Jan. 3 CRS report notes, adding: "Another possible issue for congressional consideration is the balance between direct and indirect special operations activities in world-wide counterterrorism operations."

View the report -- originally obtained by Secrecy News.

. . . And check out a couple more Jan. 3 CRS reports:

CRS Report On 'Army Drawdown and Restructuring'

CRS Report On The Unified Command Plan And COCOMs

New From CRS
By John Liang
January 3, 2013 at 7:24 PM

An "oversight issue" for House and Senate lawmakers -- the new ones of which were sworn in today -- "is the extent to which the Weapon System Acquisition Reform Act and the Better Buying Power initiative are having a positive effect" on Defense Department acquisitions, according to a Congressional Research Service report issued yesterday.

View the report -- originally obtained by Secrecy News -- which contains a good primer on the Pentagon acquisition process.

And check out some other just-issued CRS reports, also courtesy of Secrecy News:

CRS Report On The Army's GCV Program

CRS Report On The Army's JLTV Program

CRS Report On The Marine Corps' ACV And MPC Programs

CRS Report On The CTBT

No Line-Item Veto
By John Liang
January 3, 2013 at 4:18 PM

Just because President Obama signed the fiscal year 2013 defense authorization bill into law late last night doesn't mean he likes every bit of it -- not by a long shot. According to the signing statement released by the White House:

In a time when all public servants recognize the need to eliminate wasteful or duplicative spending, various sections in the Act limit the Defense Department's ability to direct scarce resources towards the highest priorities for our national security. For example, restrictions on the Defense Department's ability to retire unneeded ships and aircraft will divert scarce resources needed for readiness and result in future unfunded liabilities. Additionally, the Department has endeavored to constrain manpower costs by recommending prudent cost sharing reforms in its health care programs. By failing to allow some of these cost savings measures, the Congress may force reductions in the overall size of our military forces.

Vew the full signing statement which includes other areas of the bill where the president wishes he had line-item veto authority.

Panetta on Sequestration
By Christopher J. Castelli
January 2, 2013 at 7:13 PM

Defense Secretary Leon Panetta today issued a statement on the two-month delay of sequestration included in this week's fiscal-cliff deal. He praised lawmakers for temporarily averting the automatic cuts but called on Congress to do more in the near term to entirely eliminate the threat of sequestration.

His complete statement:

On behalf of the Department of Defense, I want to express our thanks to the Democratic and Republican Members of Congress who voted to temporarily avert sequestration. Hopefully, this will allow additional time to develop a balanced deficit reduction plan that would permanently prevent these arbitrary cuts.

Had Congress not acted, the Department of Defense -- along with other federal agencies -- would have been forced to begin taking dramatic steps that would have severely impacted our civilian personnel and disrupted our mission. For more than a year, I have made clear that sequestration would have a devastating impact on the Department. Over the past few weeks, as we were forced to begin preparing to implement this law, my concerns about its damaging effects have only grown. As an example, had Congress failed to act, I would have been required to send out a notice to our 800,000 civilian employees that they could be subject to furlough.

Congress has prevented the worst possible outcome by delaying sequestration for two months. Unfortunately, the cloud of sequestration remains. The responsibility now is to eliminate it as a threat by enacting balanced deficit reduction. Congress cannot continue to just kick the can down the road.

This Department is doing its part to help the country address its deficit problem by working to implement $487 billion in spending reductions in accordance with our new defense strategy. The specter of sequestration has cast a shadow over our efforts. We need to have stability in our future budgets. We need to have the resources to effectively execute our strategy, defend the nation, and meet our commitments to troops and their families after more than a decade of war.

Every day, the men and women of this Department put their lives on the line to protect us all here at home. Those of us in Washington have no greater responsibility than to give them what they need to succeed and to come home safely. My hope is that in the next two months, all of us in the leadership of the nation and the Congress can work together to provide that stability and to prevent sequestration once and for all. Our national security demands no less.

Budget Bear
By John Liang
January 2, 2013 at 6:02 PM

Standard & Poor's Ratings Services is still bearish on its credit outlook for U.S. defense contractors despite the passage of a bill last night that would delay sequestration by two months.

In a statement released today, S&P finds:

We believe that Congress will not implement the full amount of sequestration cuts, but it's possible an additional $100 billion to $200 billion of reductions will be part of any final agreement. We expect these cuts and the $487 billion of reductions already planned will result in flat to declining revenues and earnings for most U.S defense contractors for the next several years. However, defense contractors will likely only gradually feel the additional cuts over the next year as they are to "appropriations" (the amount the military is allowed to spend), not to "outlays" (what it actually spends in any period from funds already appropriated). In addition, funds already appropriated are often allowed to be spent over two to three years. The most immediate impact will likely be lower purchases of products and services funded through the operations and maintenance (O&M) portion of the budget. O&M funds tend to be more fungible than those for procurement and research and development, which are tied more directly to specific programs. O&M funds could also be used to fund the costs of the war in Afghanistan if a separate supplemental appropriation is not passed.

We do not expect to take industrywide rating actions, even if Congress implements the full amount of sequestration cuts. We expect that large defense contractors, which generally have diverse weapons programs, will continue to generate good cash flow. The bigger risk to credit quality would be if firms respond to poor earnings growth prospects by materially increasing share repurchases, dividends, or debt-financed acquisitions. For example, this was one of our concerns when we revised our rating outlook on Lockheed Martin Corp. (A-/Negative/A-2) to negative from stable in February 2012. Smaller contractors' operations are generally less diversified, and they have fewer financial resources, so we could lower ratings if the defense budget cuts cause material deterioration in credit quality. However, we would likely need further detail on what programs will be cut before taking any rating actions solely on that basis.

InsideDefense.com reports this morning that the Pentagon's fiscal year 2013 budget roll-out could be delayed by last night's fiscal cliff deal:

The Defense Department faces significant uncertainty in early 2013 given a two-month deferment of sequestration approved in this week's fiscal-cliff deal, as well as other factors that could delay the Pentagon's budget process, according to defense sources.

The release of the president's fiscal year 2014 budget request could be delayed beyond February, a senior defense official tells InsideDefense.com.

"It's entirely possible that the normal budget roll-out timing could be affected by ongoing discussions on sequester, the debt ceiling and continuing resolutions," the official said.

Sequestration is unlikely to be implemented as written in the current law, but the deferment sets up a new round of "gritty" debate on debt reduction in January and February that will certainly address defense spending, Wall Street analyst Byron Callan of Capital Alpha Partners writes today in a report.

View the full story.

View InsideDefense.com's full budget coverage.

Intel Inside
By John Liang
January 2, 2013 at 5:15 PM

The fiscal year 2013 intelligence authorization bill has been approved by both chambers of Congress and forwarded to the president for his signature, according to a joint statement released yesterday by the leaders of the House and Senate intelligence committees.

The bill "is significantly below last year's enacted budget, but also up slightly from the President's budget request," the statement reads, adding:

The House Intelligence Committee unanimously voted to report the FY13 bill to the full House on May 17, 2012 and it originally passed the House on May 31 with overwhelming bipartisan support.  The Senate passed its version of the authorization bill on December 28, 2012, after extensive negotiation between the House and Senate committees.  With today's vote, the House approved the version approved by the Senate and has sent the legislation to the President for signature.

Senate Intelligence Committee Chairman Feinstein said, "This bill marks four straight years of Congress passing an intelligence authorization bill.  This bill provides important oversight provisions while authorizing funding for critical national security programs.  The bill has been carefully negotiated between the two committees, our House and Senate colleagues, and the executive branch, and I look forward to the president signing it into law."

Senate Intelligence Committee Vice Chairman Saxby Chambliss said, "I am pleased that Congress has passed this annual intelligence authorization bill, which allows the Senate Select Committee on Intelligence to provide comprehensive oversight of the nation's intelligence community. It is imperative that Congress provide oversight to hold the intelligence community accountable for its fiscal and legal responsibilities."

House Intelligence Committee Chairman Rogers said, “The current challenging fiscal environment demands the accountability and financial oversight of our classified intelligence programs that can only come with an annual intelligence authorization bill.  This important bill reaffirms to the hard-working men and women in the intelligence community that Congress is united in ensuring they have the tools they need in order to do the very difficult and dangerous work of keeping America safe."

House Intelligence Committee Ranking Member C.A. Dutch Ruppersberger said, "It is our responsibility on the Intelligence Committee to give our intelligence professionals the resources, capabilities and authorities they need to keep our country safe.  This bill does this while keeping costs in check. It invests in personnel and programs that are working and cuts things that aren't.  I look forward to the President signing this bill to make it law."

Read the Senate committee's manager's report.