The 2011 DOD budget is out, and the news is good

By John Keller
Posted by John Keller

The Obama Administration's military budget proposals for next year are out, and I think we can all breathe a collective sigh of relief.

The aerospace and defense industry has spent months fretting about President Obama's 2011 defense budget -- more out of uncertainty than fear. It is this proposed budget, far more than the one last year, that gives us our first clear indication of how the Obama Administration plans to treat defense spending, and the verdict is, better than we thought.

The Administration's 2010 DOD budget request for the U.S. Department of Defense (DOD) last year essentially was George W. Bush's last defense budget. It wasn't until the 2011 budget proposal was released earlier this month that we see clearly how Obama wants to proceed with defense spending . The numbers speak for themselves.

The overall DOD budget is $708 billion, which consists of $549 billion in the discretionary defense budget, and $159 billion to support continuing military operations in Iraq and Afghanistan.

The discretionary DOD budget of $549 billion -- which includes proposals for military personnel, military construction, and family housing, in addition to military procurement, research and development, and operations and maintenance -- is an increase of $18 billion over the $531 billion enacted for 2010. This is an increase of 3.4 percent, or 1.8 percent real growth after adjusting for inflation, DOD officials say.

Those top-line budget numbers, fail to convey the real story for the aerospace and defense electronics industry. To do this requires us to look closely at DOD budget for procurement, as well as the budget for research, development, test, and evaluation (RDT&E), because these budgets largely deal with current and future military technologies.

The 2011 DOD procurement budget asks Congress for $137.48 billion, which is up only slightly -- 1.05 percent -- from current-year procurement spending of $136.06 billion, yet the trend is clearly going in the right direction -- particularly in light of concerns that the Obama Administration was looking to cut defense spending.

RDT&E is another story. The proposed military research budget for next year is $76.77 billion, which is down 5.13 percent from current-year spending of $80.92 billion, but was not as drastic a cut as it could be.

Now take a look at the combined procurement and RDT&E budget lines for military communications, electronics, telecommunications, and intelligence (CET&I ) technologies. Next year's CET&I proposed budget is for $17.45 billion, which is an increase of 3.2 percent from this year's CET&I congressionally enacted spending levels of $17.45 billion.

All this is good news for the military electronics and electro-optics industries. It means we can be on solid ground as we plan for the future. Barring unforeseen circumstances, I don't think we are going to see substantial defense spending cuts over at least the next several years; there is simply not the political will to do so.

President Obama's agenda seems to revolve around domestic programs; for defense spending it's steady as she goes -- at least for now. If the Administration were intent on cutting defense spending, this 2011 budget was the one where this was most likely to happen, especially with a Democrat-controlled Congress that had appeared compliant to the Administration's wishes.

Now we're into an election year, and no one in the Administration or on Capitol Hill wants to rock the boat on defense spending and preparedness as we move closer to the congressional mid-term elections next November.

Again, barring unforeseen circumstances, we are not likely to see substantial increases in defense spending over the next several years, yet we are not likely to see major cuts, either.

So for all of you out there who have been in mental, political, and financial holding patterns, it's time to break out and start moving forward. I don't see any end in sight in the global war on terror -- ooops, sorry ... the "overseas contingency operations" -- which means we'll see a continuing solid market for advanced sensors, battlefield networking, optics and fire control, and many other new technologies that will be involved in counter-terror and counter-insurgency operations.

Everyone involved in the military technology business can get to sleep tonight, resting assured, that the Department of Defense is still open for business.

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The Mil & Aero Bloggers

John Keller is editor-in-chief of Military & Aerospace Electronics magazine, which provides extensive coverage and analysis of enabling electronic and optoelectronic technologies in military, space, and commercial aviation applications. A member of the Military & Aerospace Electronics staff since the magazine's founding in 1989, Mr. Keller took over as chief editor in 1995.

Ernesto Burden is the publisher of PennWell’s Aerospace & Defense Media Group, including Military & Aerospace Electronics, Avionics Intelligence and Avionics Europe.  He’s a father of four, a runner, and an avid digital media enthusiast with a deep background in the intersection of media publishing, digital technology, and social media. He can be reached at ernestob@pennwell.com and on Twitter @aero_ernesto.

Courtney E. Howard, as executive editor, enjoys writing about all things electronics and avionics in PennWell’s burgeoning Aerospace and Defense Group, which encompasses Military & Aerospace Electronics, Avionics Intelligence, the Avionics Europe conference, and much more. She’s also a self-proclaimed social-media maven, mil-aero nerd, and avid avionics geek. Connect with Courtney at Courtney@Pennwell.com, @coho on Twitter, and on LinkedIn.

Mil & Aero Magazine

January 2014
Volume 25, Issue 1
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