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By Julian Nettlefold

06 Oct 08. The last time an impending U.S. Presidential Election loomed was in 2004, when the prospect of a Democrat President in the form of John Kerry caused analysts and Companies to rethink their strategies as the Democrats have historically cut defense spending.

At AUSA 2008 there was a more sombre mood on the floor with most pundits putting the scare stories of huge cuts by incoming President Obama, seen by some as given, behind them, offering a more balanced view of the future.

As we reported form the AUSA West Conference at Long Beach in May, the view of the top brass and General Metz in particular was that the current budget figures and Programs would survive but supplementals would disappear with some Programmes cut off in mid-stream. He asked industry for urgent COTS/MOTS solutions to bring these Programs to a conclusion and fielded, particularly the IED defeat systems, CREW in particular. One observer took a more sanquine and down-beat view and said that housing, as in the UK, was a major concern to the DoD and some Programs would have to go to meet the new housing repairs required to bring them up to standard.

But in general AUSA was very positive and busy with many contractors reporting new deals and products with JLTV, as we will report next week, taking centre stage, as ‘The Last Big Program.’

Retd. General Dan Zinini of SAIC, when asked at the FCS brief whether he expected FCS to be reviewed was very sanguine. He said that the FCS Team expected a review of FCS and it would be a timely moment to do so. He did not expect any big changes apart from the generally reported view of more short to medium funding going to the Infantry Brigades and not the heavier end of the Army. This would mean more spirals as we have reported over the past few years and which we will report next week.

Apart from FCS, Apache Block 3 looks safe although, as we report here ARH has been shelved. (See: Department of Defense will not certify the U.S. Army ARH program). The GD Stryker Program has had a cut of $1.5bn to meet spirals for the infantry whilst some observers see NLOS C as becoming part of the Stryker Brigade. The distinct lack of any FCS vehicles outside NLOS was noticeable from General Cartwright’s charts

October 9th media reports suggested that Pentagon officials have prepared a new estimate for defense spending that is $450 billion more over the next five years than previously announced figures. The new estimate, which the Pentagon plans to release shortly before President Bush leaves office, would serve as a marker for the new president and is meant to place pressure on him to either drastically increase the size of the defense budget or defend any reluctance to do so, according to several former senior budget officials who are close to the discussions.

However, experts note that releasing such documents in the twilight of an administration is a well-worn tactic, and that incoming presidents often disregard such guidance in order to pursue their own priorities. And with the nation’s economy caught up in a global financial meltdown, it remains unclear whether either Sen. John McCain , R-Ariz., Sen. Barack Obama ,
D-Ill., or a Democratic Congress would support such large increases for defense next year.

“This is a political document,” said one former senior budget official, who spoke on the condition of anonymity. “It sets up the new administration immediately to have to make a decision of how to deal with the perception that they are either cutting defense or adding to it.”

Dov Zakheim, the Pentagon’s top budget official from 2001 to 2004, who is not involved in the current discussions, agreed.

“The thinking behind it is pretty straightforward,” Zakheim said. “They are setting a baseline for a new administration that then will have to defend cutting it.”

The fiscal 2010 portion of the estimate includes a $57 billion incre

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