Spy chief planning to curb spending

But critics urge continued growth to meet increased demands since 9/11


WASHINGTON -- The nation's new spy chief is planning for a "relatively flat" intelligence budget in 2007, after a number of double-digit percentage increases in response to the Sept. 11 attacks, according to government officials.

The 2007 spending request, which President Bush will unveil in February, will be the first intelligence budget under John D. Negroponte, the new director of national intelligence.

According to Patrick Kennedy, a senior official in Negroponte's office, the country needed to "ramp up" spending on intelligence after the 2001 terrorist attacks. Now, Kennedy said, the government needs to decide how to best use that bigger budget.

Some intelligence professionals, though, say that without continued budget increases, efforts to enhance the nation's intelligence capabilities will stall.

The current intelligence budget is $44 billion, according to one of Negroponte's senior aides, Mary Margaret Graham, who let the classified number slip at a conference in October. That is an increase of nearly 50 percent over the estimated $30 billion spent on intelligence five years ago, said John Pike, who tracks the intelligence budget at Globalsecurity.org.

Some intelligence veterans say $44 billion a year is not enough to meet the growing demands placed on U.S. intelligence agencies since Sept. 11. Cutting growth in spending for the intelligence agencies would stunt the growth of a nascent intelligence reform effort, they contend.

"This is so incredibly short-sighted," said Mark Lowenthal, who served as a top manager at the CIA until earlier this year.

The proposed reduction in growth of intelligence spending is a sign that the Bush administration is paying for the Iraq war with money that should be going to intelligence, particularly for the hiring and training of spies, he added.

About 80 percent of the intelligence budget comes from the Defense Department, which has been ordered by the White House to cut $32 billion over the next five years.

"Intelligence is the bill payer for the Defense Department," he said. "We've all seen it before, and it's a mistake."

But others, including Pike, say the intelligence agencies need to take a breather to absorb the recent influx of cash.

"The intelligence community has got a bad case of indigestion with the sudden influx of an enormous amount of money," Pike said. Over the next five years, he added, the intelligence agencies' challenge "is going to be to hang on to what they have."

With spending for intelligence leveling off, former officials say, Negroponte will have to make tough decisions: Which of the nation's 15 intelligence agencies will get more money, and which programs will lose out if the government is to achieve Negroponte's goal of creating "a capacity to innovate faster" than America's enemies?

"It's going to force people to look at what is it within the intelligence programs we want to emphasize and what is it we believe we can cut back on," said Burton Gerber, who spent 39 years at the CIA and recently co-edited a book on intelligence reform.

The initial test of Negroponte's power will come in the next few weeks, when he sends his spending recommendations to the White House. His most formidable foe in internal budget battles is likely to be Defense Secretary Donald H. Rumsfeld, former intelligence officials say.

"It will be an interesting match-up," said Ron Marks, who spent more than a decade in the clandestine service. The winner probably will gain the upper hand in future budget battles.

In a meeting with reporters last month, Negroponte's top deputy, Michael V. Hayden, said the government wants to invest more in human spying, build a new center to improve intelligence analysts' access to public information and take steps to connect the FBI to intelligence gathered around the world.

Hayden, a former director of the National Security Agency, said the budget would probably call for spending cuts at agencies more dependent on expensive technology, such as the NSA, which eavesdrops on communications worldwide, and the National Reconnaissance Office, which builds satellite systems.

For the 2007 budget, Kennedy said there would be no "massive shift" of funds from technical to human intelligence collection, though there will be changes in the allocations within the two broad categories.

According to Pike, technical intelligence collection represents about two-thirds of the national intelligence budget.

But it might not be possible to significantly reduce spending for technology, said former Sen. Bob Graham, a Florida Democrat who chaired the Select Committee on Intelligence.

"Once you put a satellite up, you don't have the opportunity to say, `I'm going to turn it off for three months to save on the electric bill,'" he said.

That is why intelligence specialists such as Graham and Lowenthal worry that the planned expansion of human spying could suffer.

"I don't think you can build and diversify and deepen the quality of human intelligence without continuing to make some additions to the budgets of the intelligence agencies," Graham said.

Money for training new spies and analysts is likely to get caught in the intelligence budget squeeze, Lowenthal said.

Training is "seen as a piggy bank," he said. "Given the fact that we have all these brand-new analysts, if that's where the agencies make up their shortfalls, it's going to hurt tremendously."

One note of solace, said Lowenthal, who served as the top Republican aide on the House Intelligence Committee, is that the president's budget is just a request. Congress makes the final decision, he said, and "they can always spend more."


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