Defense contractors who might have worried about the combination of world peace and a Democratic president had reason for smiles in the $257.3 billion military budget proposed yesterday.
The Clinton administration's request for fiscal 1999 includes $48.7 billion for buying new weapons, a $3.9 billion increase over the current budget and the first such boost since the end of the Cold War.
Major programs fared well, though some big expenses -- most notably Boeing's troubled Super Hornet fighter jet -- could yet face hostile fire in Congress.
The administration's request includes $3.2 billion for 30 more of the Navy's F/A-18 E/F Super Hornets; $2.4 billion for the Lockheed Martin F-22 fighter plane, including purchase of the first two production models; $3 billion for 13 Boeing C-17 transport planes; and increased funding for new digital equipment for the Army and for the National Missile Defense program.
After inflation, the overall defense request of $257.3 billion -- plus a related $13.3 billion for the Department of Energy and other defense activities -- represents a 1.1 percent decline from this year's budget.
But most experts believe additional money is on the way, despite a balanced-budget cap that limits defense spending to about what the president requested.
Sticking to the cap "is done with a kind of nod and wink, with the understanding that we're in a fairly permissive budgetary environment," said Brett Lambert of the DFI International defense consulting firm.
Congress has added almost $20 billion to the president's defense budget over the past three years. Some members are already suggesting that the Pentagon should get some money from an overall budgetary surplus projected at nearly $10 billion.
Even without congressional add-ons, the situation is bright for defense contractors.
First, the fiscal 1999 budget request includes no money for operations in Bosnia. If Congress agrees to call that expense an emergency, it spares scrimping in other areas of the Pentagon's budget.
In addition, continued low inflation could give the Pentagon more buying power than it expected. The Center for Strategic and Budgetary Assessments, a nonprofit Washington think-tank, estimates that the Pentagon may get an additional $20 billion or more over the next five years simply because of lower-than-expected inflation.
The president's request of $48.7 billion for buying weapons is up from the $44.8 billion being spent this year, and represents another step toward the Joint Chiefs of Staff goal of reaching $60 billion in annual weapons spending by 2001.
The services say they need to ramp up the purchase of new weapons because a defense spending slow-down in the wake of the Cold War has left the arsenal aging at an unprecedented rate.
Next year, for example, the Pentagon is requesting more than twice as much money for operating and maintaining old equipment as for buying new equipment.
Secretary of Defense William S. Cohen called again yesterday for two more rounds of base closings as a way of attacking those costs. Congress had little patience for that request last year, and isn't expected to be much more interested now.
Instead, some in Congress will be gunning for particular big-ticket items. Prime among those is the F/A-18 E/F Super Hornet, a $47 billion program suffering a highly publicized problem with the fighter's wing.
Members of Congress are not only bothered by spending billions to produce a plane whose wing causes a disturbing wobble during combat maneuvers; they are angry that the Navy said nothing about the problem last year in congressional hearings or when the Pentagon decided to begin production of the plane.
But the Navy and Boeing claim they have a simple, low-tech fix for the plane's problem, which involves putting sandpaper and other materials on the wing to alter air flow. What remains unclear is how much those changes will retard the plane's performance.
Cohen conceded in a recent news briefing that the Super Hornet is "bound to be a contentious issue" and that Congress "will be looking for ways in which either to delay, defer or cancel" the program.
He said he defended the Super Hornet during the budget preparation process because it "gives me some leverage against the contractors" who are developing a more advanced plane, the multiservice Joint Strike Fighter, which should start replacing the Super Hornet around 2005.
The Pentagon wants to play up the competition between the planes to seek better prices and performance.
Pub Date: 2/03/98
