Obama Adviser Doesn't Expect Defense Cuts

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OCTOBER 3, 2008
Obama Adviser Doesn't Expect Defense Cuts
National-Security Aide Says Future Combat Systems and Missile-Defense Efforts Need a 'Serious Scrub'
By AUGUST COLE

A top national-security adviser to Barack Obama said he expects military spending during a Democratic administration wouldn't drop, a key concern for a defense industry that is accustomed to growing Pentagon budgets and anxious about potential cutbacks.

Richard Danzig, a U.S. Navy secretary during the Clinton administration and a leading contender to be the secretary of Defense in an Obama administration, said he doesn't "see defense spending declining in the first years of an Obama administration. There are a set of demands there that are very severe, very important to our national well-being." U.S. defense spending has risen at a steady clip throughout the Bush administration.

Regardless of whether Sen. Obama or his Republican rival, John McCain, is elected, the winner will have little time to tweak details in the fiscal 2010 budget between assuming office in late January and submitting the budget in February. A new administration normally takes months to get new appointees in key jobs, and the Pentagon budget is among the most complex and politically contentious in the federal government.

Mr. Danzig, speaking at a Defense Writers Group breakfast Thursday in Washington, said that Sen. Obama would make sure that the Pentagon doesn't become overly focused on fighting guerrillas and terrorists at the expense of traditional air and sea power. "I think the temptation is to invest in the issue du jour or the cause du jour and to overlook a lot of basics," Mr. Danzig said. At the same time, there will be a focus on "cyber warfare" and unmanned aerial vehicles, he said.

With the election just over a month away, defense-industry executives are hungry for information from either camp. "There is less detail and specifics than there has been in some past elections," said one defense-industry official. While Sen. McCain has a long track record of being tough on defense contractors' waste as a member of the Senate Armed Services Committee -- which he highlighted in the debate Sept. 26 -- Sen. Obama hasn't dealt with those issues.

Randy Scheunemann, a top foreign-policy adviser to Sen. McCain, said in an email that "Sen. Obama has no credibility on defense, while Sen. McCain has firsthand familiarity with national-security issues for decades."

Generally, Mr. Danzig was critical of the weapons-buying process during the past eight years. "The record of this administration in the acquisition area in terms of overruns and the like has been quite poor," said Mr. Danzig. "You need to come to grips with affordability issues and the requirements process."

He also singled out the Army's $160 billion-plus Future Combat Systems modernization plan led by Boeing Co. and SAIC Inc., as well as a program to develop a missile-defense system that includes Boeing, Lockheed Martin Corp. and Northrop Grumman Corp., as efforts that are worthy but in need of a "serious scrub."

Mr. Danzig said that controlling costs is crucial. One way to do that may be to shift the Pentagon's focus to buying greater numbers of less-sophisticated weapons systems. "I think industry can live with this, even embrace it," he said.

One of the thorniest weapons-buying issues awaiting either presidential nominee is the award of a more than $40 billion contract to replace the nation's fleet of aging aerial-refueling tankers. Last month, the Defense Department abandoned plans to award the work to either Northrop or Boeing after a political and legal fight. Mr. Danzig said the companies need a level playing field when dealing with the Air Force, as well as on issues such as a dispute between the U.S. and Europe over commercial-aircraft-development subsidies. As a candidate, Sen. Obama doesn't have a view about which company should win, Mr. Danzig said.

Write to August Cole at august.cole@dowjones.com