The Pentagon's New Spending Priorities
Monday, April 06, 2009SUSIE GHARIB: You could call it operation make over. The Pentagon's new budget contains important new direction not only for what the Defense Department will buy, but also for how it runs and how it plans to protect the nation. Darren Gersh explains.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Attention college graduates: the Pentagon is hiring. Secretary of Defense Robert Gates plans to train 250 computer experts a year to combat Internet attacks. Defense expert Brett Lambert says the new effort -- much of it classified -- will cost tens of billions of dollars.
BRETT LAMBERT, MANAGING DIRECTOR, CIVITAS GROUP: It is unlikely that China is going to attack us over the next 10 years with aircraft, but they've already attacked us with computers. Therefore I think the Pentagon is prudent to spend much more on cyber security than they are on aircraft.
GERSH: Another job opportunity, the Pentagon wants to put 20,000 private sector contractors back on the government payroll.
LAMBERT: The problem we had with outsourcing was that the Pentagon lost control over the contracts and the contract vehicles. So that contracting workforce and know-how we need to bring back into house.
GERSH: The Pentagon budget also shifts spending to weapons soldiers need to fight the wars in Iraq and Afghanistan and away from big iron programs like a new bomber. Also canceled, a $13 billion fleet of new presidential helicopters. And Secretary Gates wants to end production of the F-22 fighter.
ROBERT GATES, DEFENSE SECRETARY: Every defense dollar spent to over- insure against a remote or diminishing risk or in effect to run up the score in a capability where the United States is already dominant, is a dollar not available to take care of our people, reset the force, win the wars we are in.
GERSH: While some of the more exotic military technologies will suffer, Morningstar analyst Anil Daka says investors greeted the defense budget with relief.
ANIL DAKA, EQUITY ANALYST, MORNINGSTAR: Today's press conference indicated that, despite the current administration's priorities in terms of balancing the budget, per se or in terms of cutting down on some of the defense programs, they are still many more defense programs that are important, are going to stay.
GERSH: Even after the cuts, the Pentagon still plans to spend roughly $190 billion a year to research, develop and buy new weapons. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
