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09 Dec 05. A senior Pentagon official overseeing the Quadrennial Defense Review told investment bankers and defense industry representatives here that the Defense Department has “plenty” of money to invest in new capabilities, stressing that the U.S. military is enjoying a budget that has grown 40 percent over the last four years.

Principal Deputy Under Secretary of Defense for Policy Ryan Henry’s remarks to a CSFB-Aviation Week conference come as the Pentagon is wrestling to apportion $32 billion in cuts across its fiscal year 2007 to 2011 spending plan, a decrement that is driving some services to propose jettisoning personnel in order to protect prized weapon system programs.

“There are plenty of investment dollars to be able to meet the challenges that we have,” said Henry, who twice noted the Pentagon’s base budget — which does not include supplemental appropriations for operations in Iraq and Afghanistan — has climbed dramatically over the last four years, and until recently was poised to rise another five percent in fiscal year 2007.

“We can’t do everything that we want to do; we’ve never been able to do everything that we want to do,” he added. Mounting pressures on the federal budget are expected to result in reduced growth in military spending, a shift that could have consequences for the service’s modernization programs and force structure. This budget crunch dovetails with the end of an intense, 10-month QDR, an assessment designed to address the proper mix of forces and equipment for the military over the next two decades. The review, to be delivered to Congress in February, is a blueprint for future investments, principally a six-year — FY-08 to FY-13 — spending plan the Pentagon will begin constructing next summer. Defense Secretary Donald Rumsfeld, however, more than a year ago directed that — where possible — clear insights gleaned from the QDR be incorporated into the FY-07 budget, which is now in the final assembly stage. Senior Pentagon officials are dealing with intertwining decisions stemming
from the review and the FY-07 budget, which could threaten weapon programs central to each service’s plans.

“I fully expect that programs considered near and dear to each service will be modified or canceled,” Air Force Lt. Gen. Don Hoffman, military deputy to the service’s acquisition executive, said here. The final version of the Pentagon’s FY-07 request is due to the White House Office of Management and Budget two weeks from tomorrow. Henry, however, asserted that even at this late hour in the budget process “there have been no decisions made.” Defense Department officials are awaiting final budget guidance from the White House on how much the military can plan to spend between FY-07 and FY-11. That guidance could come this week. Vice Adm. Lewis Crenshaw, the deputy chief of naval operations for resources, requirements and assessments, told reporters here today that the Pentagon was still awaiting the fiscal direction.

However, the Pentagon’s comptroller has begun issuing draft program budget decisions and the office of program analysis and evaluation is issuing draft program decision memoranda. The two types of documents are used by the Pentagon leadership to set most of the pieces of the massive military spending jigsaw puzzle.

While the FY-07 budget request hangs in temporary limbo, Henry offered a brief preview of new capability areas he said the QDR will deem necessary for U.S. forces. The QDR, he said, will direct new investments in capabilities like long-range strike, improved means to insert and extract Special Forces, and tools to network the services into a more cohesive, joint force. “We have built ideas of what the future force might look like,” Henry said.

The building blocks of the future force were drawn from a dozen capability areas considered during the QDR.

The 12 areas include global deterrence; situational awareness

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