CBO Sees Missile Defense Annual Outlays Up About $4 Billion

Killing European Missile Defense Would Save $4 Billion Yearly

Spending on ballistic missile defense (BMD) programs will peak at about $17 billion in the fiscal year ending Sept. 30, 2018, which is about $1 billion more than an estimate a year ago, the Congressional Budget Office (CBO) estimated in a new report to Congress.

Current outlays are roughly $10 billion yearly.

That extra $1 billion in the 2018 projection was caused by rising costs in several BMD programs, according to CBO.

The nonpartisan congressional agency also estimates that if historical cost growth in programs such as these is considered, then the military may face BMD costs about $4 billion more annually than previous projections.

However, the report also proposes more than $4 billion yearly in cuts that could be imposed. CBO issued the report as the new 111th Congress and its larger Democratic majority are settling in at the Capitol. Some Democrats wish to cut BMD programs, especially those that still are in the development phase.

CBO based its projections in part on Bush administration policy. However, President Bush has left the White House, and President Obama now is reevaluating programs throughout the federal government, including BMD efforts.

The CBO assumptions see the Missile Defense Agency (MDA) moving ahead with development of the Ground-based Midcourse Defense (GMD) missile shield now installed in Alaska and California, and the proposed European Missile Defense (EMD) shield in the Czech Republic (radar) and Poland (interceptors in ground silos). Both programs are led by The Boeing Co. [BA].

However, critics in Congress has complained about the GMD program not having target missiles use countermeasures in tests, while demanding testing of the EMD interceptors that are variants of the GMD interceptors.

The CBO also assumes procurement of more Standard Missile interceptors (Raytheon Co. [RTN]) for the sea-based BMD program that employs the Aegis weapon control system (Lockheed Martin Corp. [LMT]). Enough SM-3 interceptors are expected to be bought to fill one in four vertical-launch tubes on Aegis-equipped destroyers and cruisers, at an annual average cost of $1.4 billion from fiscal 2015 to 2016.

The report also sees the Space Tracking and Surveillance System, which detects and tracks enemy missiles and aids interceptors in killing them, winding up with just six satellites, instead of the 27 once envisioned, launching one satellite yearly beginning in 2018.

With another BMD program, the Airborne Laser (ABL), CBO assumes procurement of a second ABL aircraft in 2013, and then a move by MDA and the Air Force starting in 2018 to buy seven more aircraft. The ABL involves a heavily modified 747-400 jumbo jet by prime contractor Boeing, a laser system by Northrop Grumman Corp. [NOC] and a beam control/fire control system by Lockheed.

Lawmakers have said a successful shoot-down of a target missile by the ABL system in a test later this year would fill the U.S. need for a BMD shield that could kill enemy missiles in their boost phase just after launch, while they are easily tracked by their flaming exhausts, before they are able to spew out multiple warheads, decoys or confusing chaff.

However, MDA also is developing the Kinetic Energy Interceptor (KEI), a high-speed, rapid-acceleration interceptor that also would annihilate enemy missiles in their boost phase.

While lawmakers assume that success in the ABL program would mean KEI would be killed, or that it would be reassigned to target enemy missiles later in their flight trajectories, the CBO report assumes that both ABL and KEI would be developed.

KEI would begin as a fixed installation asset, and then in 2014 begin a mobile system, with procurement of mobile interceptors beginning in 2017.

The CBO projections also assume a space test bed would be developed and available for use in 2023.

CBO also projects $1.7 billion through 2026 for BMD systems that would take out enemy missiles in their terminal phase of flight, while the enemy weapon is on a downward path, closing in on its target.

These terminal programs include the Patriot Advanced Capability-3 (PAC-3) short-range interceptor, the Medium Extended Air Defense System that would be developed with Italy and Germany, and the Terminal High-Altitude Area Defense (THAAD) system.

The CBO report also assumes that the sea-based BMD system involving Aegis-equipped ships would be given new interceptors to replace Standard Missiles, with the Navy beginning to buy those interceptors in 2014.

If Congress desires savings here, an appendix in the report says the military could focus missile defense programs on supporting the existing ground-based missile defense system, and defer work on future deployments, saving an annual average $4.6 billion in fiscal 2010-2013, and $4.2 billion in 2014-2026. That would include deferring plans for the EMD system.

The report assumes that MDA, as it completes development of each missile defense system, will hand it off to one of the armed services.

Another place where savings might be found would be canceling the Transformational Satellite (TSAT) communications satellite, the report noted.

It also cited many Air Force defense procurement programs, including ships and aircraft, that could be cut to save a total $52 billion in 2010 and 2026.

To read the report titled "Long-Term Implications of the Fiscal Year 2009 Future Years Defense Budget" in full, please go to http://www.cbo.gov on the Web.