Wednesday, February 25, 2009

The New Military Economics

Near the end of his February 24th address to a joint session of Congress and to the U.S. public – in what would be billed as a “State of the Union” speech in most any other year – President Obama turned from the economic state of the country, the primary subject for the night, to national security.

Or so it might have seemed.

Obama however, never really strayed from the economic aspects about which he is concerned – in particular jobs and technological prowess at reasonable cost.

On jobs, he announced that the military would add more jobs. What is unclear is whether these jobs are the balance of the increased size of the Army and the Marine Corps that began in George W. Bush’s second term (65,000 more Army and 27,000 more Marines to totals of 547,000 and 202,000, respectively) or if the new administration plans to make further increases over the new baselines.

Given the pressure on the deficit from the economic crisis that has gripped the country, it seems unlikely that more personnel will be authorized.

On technology, the main point the President made was that the Pentagon’s addiction to “no-bid” contracting (the equivalent of congressional earmarks) was at an end. This practice, which often was tied to “cost-plus” contracts, operated as a virtual blank check that transferred taxpayer dollars to industry coffers.

In this regard, it seems most interesting that Secretary of Defense Robert Gates has – according to CNN – called in the Chairman, the Vice Chairman, and the service chiefs who comprise the Joint Chiefs and requested each sign a “non-disclosure” document on the military budget. This suggests that the new administration is going to slash significant weapons systems and it does not want the contractors or the congressional delegations with defense production activities in their district/state to start the expected opposition to the cuts before the final choices are made.

The systems that are vulnerable were – in effect – named by Obama last night: the systems conceived in the Cold War to counter expected advances by the former Soviet Union, advances that never appeared.

Tomorrow the budget outline will become public. It should be an interesting weekend.

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