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26 Oct 18. It’s official: DoD told to take cut with FY20 budget. The Pentagon has officially been told the national security top line for fiscal 2020 will be $700bn, representing the first cut to defense spending under the Trump administration. Deputy Secretary of Defense Patrick Shanahan told reporters at the Military Reporters & Editors Conference on Friday that Office of Management and Budget head Mick Mulvaney directly told him the Department of Defense must aim for the $700 bn figure, first floated by President Donald Trump at a Cabinet meeting last week. Notably, Shanahan indicated this will not be a one-year blip, but rather part of a flattening of budgets, saying “when you look at the $700bn, it’s not just for one year drop down, [or] a phase, it’s a drop and then held constant over the” future years defense program, a five year projection included in every budget.
Asked whether this impacts the department’s plan to shift roughly $50bn from the Overseas Contingency Operations wartime funding account into the base budget, Shanahan said that no decision has been made. Critics of OCO have argued the DoD pushes items that should be in the base budget into the wartime fund in order to circumvent the sequestration-related budget caps. The change comes with just weeks left in the DoD’s budget planning process, where the department had been working under the assumption it would have a $733bn budget top line.
The $700bn figure represents a roughly 2.2 percent cut below the FY19 level of $716bn, and a 4.5 percent cut below the projected $733bn for FY20. However, the new figure still exceeds the $576bn budget caps for discretionary defense spending, set under the Budget Control Act for fiscal 2020. In years past, easing those caps have required intense bipartisan negotiations, though if the new number holds, budget hawks and the Pentagon would have less to show for them than last year. As a result of the last-minute change, Pentagon Comptroller David Norquist is now developing two parallel budget documents, one still working to the $733 bn figure and one working to the $700bn figure, to illustrate for Secretary of Defense Jim Mattis the potential “trade-offs.”
“Imagine we’ve been going through this very disciplined process for the whole year to build a budget that’s $733bn, and then last week we’re told to build a $700 bn budget. We are not going to reverse course on all that planning, but we will build two budgets,” Shanahan said.
Under the budget change, expect modernization to take a hit.
“The way I would think a about those two budgets and the approach, there are certain things that you can’t change. There are just near-term costs that we’re going to spend in the next year that are on contract, and for all intents and purposes are fixed. Then there are other investments we would make in science and technology and procurement, where we have [options] in terms of timing.”
As an example, Shanahan pointed to the number of hypersonic weapon systems in development, noting some of those may be delayed as one way to save investment funding — despite the systems being a priority for the department.
“It comes down to a judgment call, how fast do we modernize? And that’s probably the biggest knob that we have to turn,” he said.
Asked whether that means a trade-off between capability and capacity, Shanahan tried to thread the needle, saying, “In this budget, quantity is very important,” before pointing out part of his mission is to improve the systems already in hand.
“We’re looking at taking from the assets we already have and getting more,” Shanahan said, noting as a example that the department is “very committed to getting more F-18s flying.”
However, Shanahan indicated that the development of a Space Force and its associated offices will still be part of the budget request. The news drew a measured reaction from the fiscally conservative think tank FreedomWorks, whose president Adam Brandon said the organization was “cautiously optimistic,” since Congress would still have to approve the request.
“There’s a possibility Congress continues to boost defense spending or uses off-budget slush funds like Overseas Contingency Operations to further increase the Pentagon’s budget,” Brandon said. “The greatest existential threat to the United States is still our massive debt. By being responsible now and balancing the budget we can ensure the long-term ability to defend our nation.”
But the hawkishly conservative Heritage Foundation blasted the move as, “political games or lack of leadership” and questioned Trump’s commitment to “making the military great again.” Retired Lt. Gen. Tom Spoehr, director of its Center for National Defense, said this demonstrates “the United States does not possess that same seriousness” in military investments as its enemies, “even as we enter a new era of great-power competition.”
Despite defense increases to $700bn in FY18 and $716bn in FY19, Spoehr said budget caps, an excessive reliance on OCO, “and the department’s acceptance of stagnant budget growth are all preventing the military from regaining the strength it needs to defend the nation.”
“Rebuilding our military will take years and require sustained commitment,” Spoehr said in a statement. “If Pres. Trump is truly devoted to ‘making the military great again,’ he needs to lead on this issue and work with Congress to ensure we maintain that positive trajectory, and ensure our role as the world’s leading superpower for decades to come.” (Source: Defense News)
26 Oct 18. U.S. invites Putin to Washington, but says get out of Ukraine. The White House has formally invited President Vladimir Putin to Washington, U.S. National Security Advisor John Bolton said on Friday, returning to an idea that was put on hold in July amid anger in the U.S. over the prospect of such a summit. President Donald Trump held a summit with Putin in Helsinki, the Finnish capital, and then issued Putin an invitation to visit Washington in the autumn. But that was postponed after Trump was accused of cosying up to the Kremlin.
“We have invited President Putin to Washington,” Bolton said at a news conference during a visit to ex-Soviet Georgia, days after meeting Putin and senior security officials in Moscow.
It was not immediately clear if Putin had accepted the invitation, which is for next year. Bolton, in a separate interview with Reuters, strongly criticised Russian foreign policy, saying Moscow’s behaviour on the world stage was one of the reasons Washington had imposed sanctions on Russia and was now considering imposing more.
“It will be helpful if they (the Russians) stop interfering in our election … get out of Crimea and the Donbass in Ukraine … stop using illegal chemical weapons to conduct assassination attempts against Russian exiles in the West, and if they would be less intrusive in the Middle East,” he said.
Russia denies meddling in the 2016 U.S. presidential election, sending soldiers and equipment to eastern Ukraine, and has rejected Western allegations it was behind the poisoning of former Russian spy Sergei Skripal and his daughter in Britain.
WILL PUTIN ACCEPT?
Putin last held a meeting with a U.S. president on American soil in 2015 when he met Barack Obama on the sidelines of a U.N. General Assembly.
Trump’s earlier invitation to Putin sparked an outcry in Washington, including from lawmakers in Trump’s Republican party, who argued that Putin was an adversary not worthy of a White House visit. Trump has said it is in U.S. interests to establish a solid working relationship with Putin however. Trump and Putin plan to hold a bilateral meeting in Paris on Nov. 11 on the sidelines of events to commemorate the centenary of the end of World War One. Bolton said that the Paris meeting would be brief and more of “a base-touching exercise.”
“One of the most important subjects they will discuss is whether President Putin will accept President Trump’s invitation to come to Washington or will President Putin once again extend his invitation to President Trump to go to Moscow,” said Bolton.
“I think what President Trump would like would be more of an opportunity to discuss the issues at length and we’ll have to see when it gets on the schedule.” (Source: Reuters)
25 Oct 18. NATO urges Trump officials not to quit nuclear treaty – diplomats. European members of NATO urged the United States on Thursday to try to bring Russia back into compliance with a nuclear arms control treaty rather than quit it, diplomats said, seeking to avoid a split in the alliance that Moscow could exploit. In a closed-door meeting at NATO, Pentagon, U.S. State Department and National Security Council officials briefed alliance envoys on U.S. President Donald Trump’s decision to pull out of the 1987 Intermediate-range Nuclear Forces Treaty, which rid Europe of land-based nuclear missiles.
Diplomats present said Germany and other European allies called for a final effort on Washington’s part to convince the Kremlin to stop what the West says are violations, or possibly renegotiate it to include China.
“Allies want to see a last-ditch effort to avoid a U.S. withdrawal,” one NATO diplomat said on condition of anonymity because of the classified nature of the meeting, which took place two days after senior U.S. official John Bolton informed Russian President Vladimir Putin of the plans in Moscow.
“Nobody takes issue with Russia’s violation of the treaty, but a withdrawal would make it easy for Moscow to blame us for the end of this landmark agreement,” a second diplomat said.
NATO declined to comment on the details of the meeting but issued a statement saying that allies assessed “the implications of Russia’s destabilising behaviour on our security.”
“NATO allies will continue to consult on this important issue,” it added.
Earlier this week, NATO Secretary-General Jens Stoltenberg laid the blame on Russia for violating the treaty by developing the SSC-8, a land-based, intermediate-range Cruise missile which also has the name of Novator 9M729.
Russia denies any such violations.
NATO allies including Belgium and the Netherlands, which host U.S. nuclear weapons facilities in Europe, warned in the North Atlantic Council, NATO’s highest decision-making body, of a public outcry if the United States were to try to install medium-range nuclear weapons on their territory again.
Stoltenberg said on Wednesday he did not think this would lead to reciprocal deployments of U.S. missiles in Europe as happened in the 1980s.
European allies see the INF treaty as a pillar of arms control and, while accepting that Moscow is violating it by developing new weapons, are concerned its collapse could lead to a new arms race with possibly a new generation of U.S. nuclear missiles stationed on the continent.
Diplomats said the U.S. officials did hold out the possibility that the United States may delay its formal withdrawal to after a planned meeting between Putin and Trump in Paris on Nov. 11. The treaty foresees a six-month notification period for any withdrawal, also potentially giving Washington time to negotiate with Moscow before finally pulling out. (Source: Reuters)
24 Oct 18. Lockheed’s $15bn Saudi Deal at Risk After Khashoggi Death. Lockheed Martin Corp.’s potential $15bn sale to Saudi Arabia of its Thaad air-defense system may be the unfinished deal most vulnerable to growing congressional demands to stop providing arms to the desert kingdom after the killing of critic Jamal Khashoggi. It also underscores that the $110bn package of arms sales that President Donald Trump announced on his visit to the Gulf nation last year — and has vowed to protect despite Khashoggi’s death — was always aspirational at best.
“That number is not analytically helpful, that number is politically helpful,” said Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies in Washington. “It’s not close to $110bn in hardware, and it doesn’t go this year or next year.”
The pending Saudi deals for arms, logistics and training includes sales started during President Barack Obama’s administration. Only $14.5bn of that involves signed “letters of offer and acceptance” that spell out final terms and prices, according to the Pentagon. The sale of Lockheed’s Terminal High-Altitude Area Defense system remains under negotiation a year after it was initially approved by Congress. U.S. officials and congressional aides said that although Congress approved the potential Thaad sale early last November, the letter of offer and acceptance agreed to in February hasn’t yet been signed and remains under negotiations.
Bruce Tanner, chief financial officer for Lockheed, the biggest U.S. defense contractor, told analysts on the company’s quarterly earnings call Tuesday that the Thaad deal with the Saudis is “the largest order we’ve been waiting on” that “has not taken place yet.” He said the Bethesda, Maryland-based company is “not sure when that will take place.”
In any case, Tanner said, “we would not have significant sales in the near-term” in part because he understood the Thaad system for Saudi Arabia wouldn’t possess an initial combat capability until 2023.
Now the Thaad sale may be caught up in the growing congressional backlash against the Saudis — and especially Crown Prince Mohammed bin Salman for his suspected responsibility in the death of journalist Khashoggi inside his country’s consulate in Istanbul. The sentiment was reflected in a bipartisan bill introduced Tuesday by Democratic Representative James McGovern to immediately stop all military sales to Saudi Arabia, an even tougher approach than the bill he proposed just last week to tie such deals to a U.S. determination of the Saudi government’s role in the killing.
“With the murder of Jamal Khashoggi, it’s time for the United States to halt all weapons sales and military aid to Saudi Arabia,” the Massachusetts lawmaker said in a statement.
Trump told reporters Tuesday that “in terms of what we ultimately do I’m going to leave it very much — in conjunction with me — up to Congress” although he continued to say it would be “foolish” to impede arms deals or investment flows.
Although the McGovern legislation would cover all arms transfers, “militarily, denying or delaying Thaad to the Saudis seems to be counterproductive,” David Des Roches, associate professor at the Near East South Asia Center for Strategic Studies at the National Defense University, said in an email.
“This is a defensive weapons system which is in no way implicated in any human rights violation, and will form the bedrock of the Saudi air defenses for at least two generations to come,” he said. “If this sale is denied or delayed, the Saudis can be expected to question the relationship and seek alternate suppliers — most probably the Russian S-400,” he said of Russia’s most advanced air defense system.
The U.S. has voiced strong opposition to plans by NATO ally Turkey — Saudi Arabia’s prime accuser in the Khashoggi case — to buy the Russian weapon.
Under the deal outlined during Trump’s visit to Riyadh last year, Saudi Arabia requested a potential purchase of 44 launchers, 360 missiles, 16 Fire Control and Communications Mobile Tactical Stations, and seven Raytheon Co. AN/TPY-2 radars. The package also includes maintenance equipment, 43 trucks, generators, electrical power units, trailers, communications equipment, tools, test and maintenance equipment and spare parts.
The proposed package includes a $3.5bn discount that the Saudis won from the Pentagon in 2016, under the Obama administration. The price break was approved after the Saudis contended the sale could be lost without it. It came in the form of two waivers from a U.S. law requiring foreign purchasers of American weapons to pay part of the Defense Department’s costs in developing them.
But a year later, even with the discount, the Thaad sale lingers, unfinished.
“It’s not clear that the Saudis have ever been serious about Thaad. They have been considering it for years,” Bruce Riedel, senior fellow at the Brookings Institution, a CIA veteran and Middle East adviser on the National Security Council, said in an email.
“The United States has much more leverage than Saudi Arabia,” he said. “Without American support the Saudi military would be inoperative. If Washington wants answers from Riyadh” about Khashoggi’s death, “squeeze the spare parts and maintenance lifeline,” he said. (Source: Defense News Early Bird/Bloomberg)
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