Funds for Weapons Doubled

Posted March 28, 2003 at 6:21pm

The Bush administration, under pressure from the ailing U.S. defense industry and confronting the prospects of a longer-than-expected war in Iraq, has quietly doubled the amount of money it is seeking from Congress to reload its stock of cruise missiles, smart bombs and old-fashioned bullets.

The extra funds came to light Thursday when Defense Secretary Donald Rumsfeld asked the Senate Appropriations Committee for $7.2 billion to resupply the military with the key bombs and ammunition that are being hurled at Saddam Hussein and his troops in Iraq.

Two days earlier, Bush asked Congressional leaders for just $3.7 billion for “reconstituting” the armed forces, in Pentagon parlance.

“This supplemental request provides essential support to help guarantee the success and safety of our men and women in uniform,” Bush wrote in a letter to Congressional leaders accompanying the spending request.

Together, the new funds provide a modest wartime bonus to several of the nation’s leading munitions makers.

Still, defense industry lobbyists say President Bush’s $75 billion spending bill for the Iraq war does little to help the defense industry in the long term.

“There really isn’t much in the appropriations bill for us except for some procurement spending, but that’s just for immediate needs,” said Janet Neale, a spokeswoman for the Aerospace Industries Association, which represents jet-makers such as the Boeing Co. and Lockheed Martin.

“They are not adding to the pre-war inventory — they are only replenishing what has already been spent,” said another industry lobbyist. “The bill doesn’t do anything to replace aging aircraft and aging ships.”

The White House request, however, includes billions of dollars for new munitions and — as one defense lobbyist said — “orders are orders.”

Lt. Col. Gary Keck, a Pentagon spokesman, said the additional $3.5 billion should not be interpreted as a change in policy because the administration did not formally ask for the original “reconstituting” figure.

“Before that, everything is pre-decisional and subject to change without notice,” Keck said. “The supplemental is not a supplemental until the administration presents it.”

If approved by Congress, the extra funds would be an unexpected handout for the nation’s largest defense contractors, who have seen their industry consolidate drastically over the past decade.

Unlike a typical spending bill, this latest supplemental spending measure does not detail exactly how the funds will be spent.

“It’s not the kind of appropriations bill that say 10 cents will be spent on this and 10 cents will be spent on that,” Keck said. Funds would cover “anything that has to be with repaired, refitted and restocked,” from tanks and trucks to smart bombs and machine guns, he said.

Defense analysts said the $7.2 billion kitty would be mainly devoted to covering the cost of replacing hundreds of Tomahawk cruise missiles, Patriot missiles and other precision-guided weapons used in Iraq.

“You can bet those systems are in there,” Keck confirmed.

Such spending would give billions of dollars to the nation’s largest defense contractors, including Raytheon, Lockheed Martin and Boeing.

Raytheon, the maker of the $600,000 Tomahawk cruise missile, could be the biggest winner. The military has already fired as many as half of the Tomahawks it brought to the Middle East — including several that targeted a suspected Hussein hideaway on the war’s first night.

In addition, Lockheed Martin produces most of the Patriot missiles that have intercepted Iraqi Scud missile attacks. Boeing’s Joint Direct Attack Munitions, or J-DAM, has been widely-used to guide bombs directly onto their targets.

Another beneficiary could be little-known Alliant Techsystems. The Minnesota-based firm is the nation’s leading manufacturer of ammunition for machine guns and tanks.

However, defense analysts say the new funding will provide only short-term help to the munitions makers and will do little to buttress the sector as a whole.

“It sounds like a lot of money, but fighting a war is expensive,” said Richard Aboulafia, an analyst with the TEAL Group, an aerospace and defense consulting company. “A huge amount of this just goes to the regular costs of fighting a war. It is possible that the defense contractors will walk away with nothing.”

Aboulafia and other analysts say the defense industry only benefits when the Pentagon places new orders for big-ticket items.

A Northrop Grumman-built aircraft carrier, for example, could cost the Navy upwards of $4.5 billion — about as much as 7,500 of Raytheon’s Tomahawk missiles.

To be sure, Northrop and other defense contracts not in the missile business will receive some indirect benefit from subcontracts. Northrop produces the guidance system for the Tomahawk, which accounts for about 3 percent of the total cost of the missile.

For their part, lobbyists for the defense industry are wary of appearing to profit from the war — and are trying to stay below the radar screen these days.

“We haven’t put together a shopping list,” said one source with a major defense contractor. “We don’t want to appear to be looking for publicity.”

Indeed, when Rumsfeld appeared on Capitol Hill last week to testify on behalf of the spending request, the room was nearly empty.

Aboulafia said the consolidation in the defense industry makes it possible for the lobbyists to remain quiet.

“They don’t need to lobby,” he said. The Pentagon “knows what we need and knows who to buy it from.”