Panetta: $400B Cut Won't Harm U.S. Security

Leon Panetta, nominated to become the next U.S. defense secretary, told the Senate Armed Services Committee on June 9 that the government does not need to choose between fiscal discipline and a strong national defense.

CIA Director Leon Panetta testifies on June 9 during a confirmation hearing before the U.S. Senate Armed Services Committee. Panetta has been nominated to succeed Robert Gates at the Pentagon. (Win McNamee / Getty Images)

The $400 billion cut to the security budget over 10 years called for by President Barack Obama will not pose a risk to national security, he said during his confirmation hearing.

He acknowledged that some tough choices would have to be made, but Panetta said the country could maintain the strongest military in the world while also reining in defense spending.
Panetta said he did not know how much of the $400 billion would come from the Pentagon. The security budget includes funding for the State Department, the intelligence community, the Department of Homeland Security, the Department of Veterans Affairs, the U.S. Agency for International Development and the nuclear weapons activities of the Department of Energy.
The chairman of the Senate Armed Services Committee, Sen. Carl Levin, D-Mich., asked Panetta to find out and report to Congress. "We need to know that," he said.
In considering Panetta's suitability as the next defense secretary, several senators highlighted his experience managing budgets as a skill that the Pentagon needs today.
Panetta, a former Democratic congressman from California, was director of the Office of Management and Budget (OMB) during the Clinton administration. He is now director of the CIA.
Panetta's service at OMB is "invaluable" because he "understands the inner workings of the budget process and because he shaped the decisions that helped achieve the budget surpluses of the late 1990s," Levin said.
The hope is that Panetta's budget background will help the Pentagon make responsible budget cuts that contribute to the president's debt reduction efforts, as well as get soaring weapon costs under control.
Panetta told the Senate panel that he intends to accelerate the Pentagon's efforts to achieve a full financial audit.
"We should be able to audit that department," he said. The Pentagon has never completed a full audit and does not plan on being able to do so before 2017.
"One of the first things I'm going to do is see if we can improve on that timetable," Panetta said.
The Pentagon is currently conducting a "Comprehensive Review," called for by the president to help determine what should be cut to meet the $400 billion target. In Panetta's written responses submitted to the Senate panel before the hearing, he noted that the review would be completed by the fall.
"If we are going to manage costs, I believe everything must be on the table," Panetta said in response to the advance policy questions. "It may be appropriate to conduct a comprehensive review of the military pay and benefits structure to determine where costs can be contained."
Military health care and other entitlement programs included in the Pentagon's budget are currently growing faster than inflation. In a few years, military health care is expected to exceed 10 percent of the overall defense budget.
As for other entitlement programs, it may "also be appropriate to review the military retirement system for needed changes and efficiencies," Panetta said.
As for weapon programs, Sens. John McCain, R-Ariz., and Saxby Chambliss, R-Ga., asked Panetta specifically about the F-35 Joint Strike Fighter, the Pentagon's most expensive program.
Variants of the F-35 fighter jet are scheduled to replace aircraft in the Air Force, Navy and the Marine Corps. Recently, the F-35 was estimated to cost $380 billion over its lifetime, but the Pentagon has said it is working to re-baseline the program.
The country cannot afford an aircraft that doubles or triples from its original cost, McCain said.
"I support DoD's current effort to focus on and reduce F-35 sustainment costs," Panetta said. "If confirmed, I will review the overall program's status and health."

India's Short-Range Prithvi II Strikes Test Target

NEW DELHI - India's short-range Prithvi II ballistic missile, which failed a September 2010 test, found its target during a follow-up firing June 9, an official with the government's Defence Research Development Organisation (DRDO) said.
The launch from the missile testing facility in India's eastern Orissa state was carried by the military and monitored by DRDO scientists, the official said.

The 350 kilometer-range missile, capable of carrying a nuclear warhead, is already a part of the Indian Air Force's arsenal.
"Prithvi II, the first indigenous surface-to-surface strategic missile, capable of attacking targets at ranges of 350 kilometers, reached the predefined target in the Bay of Bengal with a very high accuracy of better than 10 meters," according to a Defence Ministry news release. "All the radars, electro-optical systems located along the coast have tracked and monitored the missile throughout the flight path. An Indian Naval ship located near the target witnessed the final event."
The Prithvi series of missiles is regarded as Pakistan-centric.
Both liquid and solid variants of the Prithvi missile have been tested. The liquid-fueled missile can maneuver in flight.

NATO-Russia Helo Care Fund for Afghans Grows

BRUSSELS - Russia is one of the key contributors to a German-led NATO-Russia helicopter maintenance trust fund to allow Afghan forces to keep existing, mainly Russian, helicopters in working order.
"The initial target for the trust fund was $5 million; we've already substantially surpassed that target. The number of contributors is still going up," said a NATO official.

"The main point is to train Afghan engineers and technicians so that they will be able to carry out the proper maintenance at the proper times. We are also looking at providing tool kits and spare parts," the official said.
NATO and Russian defense ministers also discussed missile defense.
"While they agreed that NATO and Russia are coming closer to reaching agreement on the key principles which should govern this cooperation, more work will need to be done over the next few months," said NATO in a press release.
The exchange of classified information, the development of technology able to detect explosive devices and the ways to improve protection of critical infrastructure were cited by NATO as tangible NATO-Russia projects to counter terrorism. NATO and Russian fighter jets are also holding their first joint exercise over Poland and the Black Sea to prevent attacks such as 9/11 by sharing information and coordinating interceptions of renegade aircraft.
Separately, NATO defense ministers adopted a revised NATO Policy on Cyber Defense today. The revised policy will offer a coordinated approach to cyber defense across the alliance with a focus on preventing threats and building resilience.
"All NATO structures will be brought under centralized protection and new cyber defense requirements will be applied," said NATO in a press release.
During a press conference, NATO Secretary General Anders Fogh Rasmussen said that an important element of the new policy is that "all agencies and commands will be under common NATO protection by 2012. By then, our CERT [Computer Emergency Response Team] will have reached full operational capacity, giving us increased situational awareness in all NATO networks, regardless of their geographic location."

U.K. Defense Aero Sales Up, But Orders Fall

LONDON - British aerospace defense sales rose last year, but figures in the annual industry survey launched June 9 by the trade organization ADS confirmed the good times are coming to an end for the sector, as orders plummeted by nearly one-third compared with 2009.
Part of the defense orders downturn could be accounted for by the abnormally high bookings in 2009, but last year also saw the impact of a slowdown in defense spending in the U.K. and Europe, said Graham Chisnall, the managing director of aerospace and operations at ADS.

The survey, which is a barometer on the health of the aerospace sector here, said defense orders from Britain to the European Union slumped 65 percent to 1.43 billion pounds ($2.35 billion).
The European Union remained Britain's biggest customer overall in aerospace sales at 6.53 billion pounds. Sales to the U.S. came in at 3.07 billion pounds, an 8 percent boost.
U.K aerospace sector orders overall fell 11 percent to 29.1 billion pounds, but that was entirely due to the downturn in defense as order delays and weak bookings signaled tougher times ahead as many nations begin to cut defense spending to help resolve wider financial problems.
Britain's aerospace industry is reckoned to be the world's second-largest, behind the U.S., and a leading driver of high technology manufacturing in the U.K. Chisnall warned, though, that Britain would have to invest more in basic research and technology if it wanted to retain its position in the aerospace world.
Industry is investing heavily in program development but that masks the fact that work on enabling technology is "declining year-on-year in both sectors but is particularly prominent in civil aerospace," he said.
"A strong industry partnership together with sustained public and private investment will be crucial to maintaining the long-term future of the sector. We have made an encouraging start with high-level meetings that involve industry seniors and are chaired by Vince Cable [the government's business secretary] and Mark Prisk [the business minister]," he said.
Civil orders registered a 3 percent rise to 19 billion pounds. Sales in the sector were up 1.5 percent to 19 billion pounds, and Chisnall said growth projections in such places as China and India offered the potential for civil growth rates not seen before.
The growth was of such magnitude that it could replace the downturn in defense "if companies can exploit it," he said.
It wasn't all doom and gloom for defense, though. The story on revenues generated for the year by the defense aerospace industry was more upbeat with a 2.8 percent rise for the year to 12.11 billion pounds.
Even domestic defense sales rose marginally, by 0.6 percent. Chisnall said that figure had been boosted by government spending on urgent operational requirements for the British military fighting in Afghanistan.
With British combat troops due to be out of Afghanistan by 2015, spending on urgent operational requirements may not provide a sticky plaster for domestic defense aerospace sales for much longer.
Among the various defense sectors, the ADS survey pointed up a 27 percent slump in missile sales from the U.K. to 780 million pounds. The sector is dominated by MBDA but also includes Thales UK and Raytheon.
Defense still accounts for 52 percent of British aerospace sales. Just more than 30 percent of that comes from the export market. A graph produced by ADS showed Britain was massively more dependent on the export market for its total aerospace sales than either the U.S. or the European Union average.
The U.K. figure is 19 percent while, at the other end of the scale, U.S. dependency on its government for aerospace sales stands at 57 percent.

U.K. Reconsiders Its Rotor Wing Strategy

LONDON - Britain is reconsidering its military rotor wing strategy and expects to deliver a new plan to achieve an affordable force later this year, according to the Ministry of Defence.
News that a new rotary wing capability study was underway at the Ministry of Defence emerged at a land warfare conference held in London last week when the man leading the effort, Maj. Gen. Bill Moore, said work was being conducted to deliver a coherent helicopter plan in line with the government's scheme to restructure the military, known as Future Force 2020.

Moore, the MoD's director of battlespace maneuver, is heading a steering committee that includes senior officers from the Joint Helicopter Command and others.
The revised strategy is expected to be complete by the autumn, according to a MoD spokeswoman.
The MoD said in a statement that any significant changes to the helicopter strategy resulting from the review and from a separate three-month study of all defense sectors to better match priorities and budget resources would be announced to Parliament.
"The rotary wing capability study will re-examine defence's helicopter requirement to deliver the Future Force 2020 vision set out in the Strategic Defence and Security Review and ensure a balanced and affordable plan which delivers the right rotary wing force mix for defence," the MoD said.
The move comes as the government continues efforts to reduce defense budget deficits in response to severe cuts in funding over at least the next four years and the need to close a huge over-commitment in equipment spending over the next 10 years.
The rotorcraft capability work may herald cuts to helicopter procurement, but industry executives and the military here are keeping their fingers crossed that the study will result in only modest reductions across the helicopter fleet.
Requirements for equipment, training, basing and others areas will all be swept up in the study.
Civilian search-and-rescue requirements will also be looked at in the wake of the recent collapse of the SAR-H deal, which would have involved an industry consortium taking over from the military the role of running those services around Britain.
A new way ahead for providing search and rescue could emerge from the Transport Department later this summer.
The re-examination is the latest of several rotary wing studies undertaken by the British over more than a decade in an attempt to achieve coherence in what has proved a controversial area of defense operations.
The previous government was heavily criticized for a helicopter procurement policy that left the armed forces chronically short of lift capability in Iraq and Afghanistan. That problem was notionally resolved just ahead of Labour being ousted by the Conservative-led coalition in May 2010 by an order of 22 new Chinooks from Boeing plus replacement of two additional machines written off in Afghanistan.
The new government cut the plan to 12 plus 2 Chinooks and last year handed over money to Boeing to start working on long-lead items and a design review. A production order has not yet been signed but a Boeing spokesman said they expected the first aircraft to be on the assembly line in Philadelphia next year.
Britain plans to start drawing down its forces in Afghanistan ahead of a complete withdrawal of combat troops by 2015, but Moore told the Royal United Services Institute conference in London that the MoD still "needs to buy additional Chinooks to improve our lift; our lift at the moment will not allow us to do what the government requires us to do."
The MoD said in the statement it remains committed to the plan to buy 12 additional Chinook helicopters for the Royal Air Force, as well as the attrition buy of two machines.
"We are currently negotiating with industry on the main investment decision on these helicopters," the statement said.
Boeing reinforced that message, telling reporters in the U.S. on June 7 that the number of helicopters under discussion remained as advertised.
One industry executive, though, said he had heard the number may slip to single figures and a second executive said the "odds on achieving 12+2 are very long at the moment." That was denied by the Boeing spokesman.
The British plan is to reduce helicopter types to the Chinook and Apache attack helicopter from Boeing, the Wildcat and Merlin machines from AgustaWestland, and the Eurocopter Puma, which is being upgraded. The Sea King is scheduled to come out of service in 2016.
Moore said the Puma improvement was needed quickly to "drive resilience for Afghanistan".
The Sea King will exit service in 2016 and Merlin will transfer to the Royal Navy for use to lift the Royal Marines from their present battlefield lift role with the Royal Air Force, Moore said.
"We have Wildcat coming into service but we have to do something with our [Apache] attack helicopter. We have the capability sustainment program and we need to build on that, and probably need to align ourselves with the U.S. Block 3."
A replacement for the Lynx helicopter, the Wildcat is scheduled to be in service with the Army in 2014 and the Navy the following year. The machine will provide reconnaissance, troop transport and other roles in the Army while in the Navy its prime use will be as an anti-surface combatant.

Nuclear-Capable Missile Test Successful: India

BHUBANESWAR, India - India on June 9 tested a short-range nuclear-capable missile along its eastern coast, an official said, part of the nation's efforts to build up its atomic deterrent.
The surface-to-surface Prithvi-II missile was fired from a range in the eastern state of Orissa and hit its target in the Bay of Bengal successfully, the defence ministry official said.

The Prithvi, which is domestically built and developed, can carry nuclear or conventional payloads and has already been inducted into the armed services.
India's Defence Research Development Organisation is developing a series of missiles as part of the country's deterrent strategy against neighboring Pakistan and China, who also have nuclear weapons.
The fourth test of the 30-foot Prithvi-II was a routine part of training exercises for the Indian armed forces, officials said.
With a striking range of 200 miles (350 kilometers), the missile is capable of carrying a 2,200-pound (1,000-kilogram) warhead.

China Plans Naval Exercises in Western Pacific

BEIJING - Chinese state media reported June 9 that China would conduct naval training drills in the western Pacific later this month, amid lingering fears among Beijing's neighbors about its military ambitions.
The exercises will take place in international waters and are "not targeted at any specific country," the defense ministry said in a statement carried by Xinhua news agency.

The ministry did not offer further information about the location of what it called a "regular" drill, nor did it say which ships would participate.
Military observers are keenly awaiting the launch of the country's first aircraft carrier, which is currently based in the northeast port city of Dalian.
Earlier in the week, a top official in China's People's Liberation Army gave the first confirmation of the existence of the carrier in an exclusive interview with the Hong Kong Commercial Daily.
Gen. Chen Bingde, chief of the General Staff of the PLA, said the 990-foot refurbished Soviet carrier "is being built, but it has not been completed," without elaborating.
Qi Jianguo, another PLA general staff official, told the newspaper that the carrier would not enter other nations' territories, in accordance with Beijing's defensive military strategy.
"All of the great nations in the world own aircraft carriers - they are symbols of a great nation," Qi was quoted as saying.
China is involved in a number of simmering marine territorial disputes with its neighbors.
It has claimed mineral rights around the disputed Spratly Islands in the South China Sea, and argued that foreign navies cannot sail through the area without Beijing's permission.
In April, Adm. Robert Willard, head of U.S. Pacific Command, nevertheless said China's navy had adopted a less aggressive stance in the Pacific after protests from Washington and other nations in the region.