As a new president and Congress are poised to enact a roughly $800 billion economic stimulus bill, it is clear that the measure could provide immense help to critically tight defense and space budgets.
Further, increased spending in this area could help to spur growth in the moribund U.S. economy, helping to slow its descent into an ever-worsening recession.
While some advocate putting a chunk of the money into grants to states or into tax cuts for individuals and businesses, it is clear that the funds also could create a huge stimulus to the economy if they were invested in defense and space procurement programs.
If the $800 billion were divided among federal agencies in portions similar to the federal budget allocations, defense programs would receive 19 percent of the total, or about $152 billion, roughly equal to all Pentagon procurement programs for a year, including those in the research and development area.
As for NASA, let us consider what the space agency received when it was fully funded in the Apollo moon shot years, perhaps 0.6 or 0.7 of one percent of the federal budget, so let us round that off to just 1 percent of federal spending.
NASA — which lawmakers, studies and experts agree is chronically underfunded — would stand to gain $8 billion from the economic stimulus bill, or an amount equal to more than a third of what the space agency receives in its annual budget.
Aerospace jobs help to bolster economic growth, NASA Administrator Mike Griffin noted last week. “Aerospace jobs jump-start the economy,” he said before the Space Foundation in Washington, D.C.
If NASA is given added funding, that can swiftly translate to new jobs and economic growth, he indicated. “I can start buying parts tomorrow, if I have the money,” he said. “It is the highest tech jobs we have in this country,” work that “people like to do,” he said.
An injection of new spending could help to inoculate the economy against a severe and accelerating plunge, according to Thomas Donnelly, resident fellow with the American Enterprise Institute, a Washington think tank. He wrote in a new AEI paper, “Defense Stimulus: A Key to American Recovery and Investment.” (To read his paper in full, please go to http://www.aei.org on the Web, and click on More Short Publications, then click on Foreign & Defense.)
At a minimum, Donnelly said, defense outlays should be increased by an extra $20 billion each year, with the spending focused on procurement programs (such as aircraft and ships) and personnel.
“These kinds of expenditures not only make economic good sense, but would help close the large and long-standing gap between U.S. strategy and military” funding levels, Donnelly argued. Referring to the incoming Obama administration plan to spend tens or hundreds of billions of dollars on repairing U.S. infrastructure such as highways, Donnelly observed that if “bridges need fixing, so too do the tools with which our military fights.”
This isn’t some untried theory, but rather is based upon proven results, when military spending has helped to stimulate economic activity during prior periods of weakness, Donnelly observed. “There is a strong historic correlation between defense spending and past [economic] recoveries,” he noted.
While he didn’t mention it, soaring military spending during World War II was credited with helping to end the Great Depression of the 1930s.
Separately, an Aerospace Industries Association (AIA) leader said the aerospace and defense industry “is a source of economic strength that should be tapped in the stimulus bill to help lead our nation out of very challenging times.”
AIA President and CEO Marion Blakey spoke before a National Aeronautics Association luncheon.
One way to take advantage of the industry’s strength would be to include several aviation infrastructure provisions in the bill, she said.
“Additional investment would increase the economic benefits our industry provides,” Blakey said.
She proposed accelerating inception of a new navigation system for aircraft, and providing tax breaks to the industry.
“These steps would boost innovation and keep cash generated by the industry in the economy rather than government budgets,” according to Blakey.
“The biggest mistake would be to cut defense and space investments, making our industry a bill payer for other industries that are asking the government to bail them out,” Blakey said. “This would diminish our strength and momentum in the recovery and cost thousands of high-paying jobs. And that, I’m sure we all agree, would be a very bad move right about now,” when unemployment has risen from roughly 4 percent in 2000, to more than 7 percent currently and likely to head still higher.
Donnelly noted that because defense jobs can’t be moved abroad easily (since U.S. law mandates 50 percent U.S. content in items the Pentagon procures), increasing defense spending on procurement would be certain to bolster U.S. economic activity and growth. “All major weapons systems are made in the U.S. and have a huge secondary effect,” he observed.
Consider that both the Department of Defense (DOD) and NASA today have immense shortfalls in their long-term procurement budgets, in programs already authorized and in progress, so added money could be used immediately, without the need to begin programs from scratch.
Here is an example of what $152 billion could mean for the military:
Buy a fleet of seven Airborne Laser aircraft at $1 billion each, or $7 billion total, once the testbed 747-400 modified jumbo jet proves this year that it can shoot down enemy missiles with a laser beam. (The Boeing Co. [BA]). The United States needs a system that can shoot down intercontinental ballistic missiles, and shorter- range weapons, in their vulnerable boost phase of flight, before they have a chance to emit multiple warheads, decoys or chaff, and do so cheaply, at the speed of light. While Democrats have attempted to make deep cuts in this program in favor of more developed or operational missile defense systems, extra money could mean not having to make that unpalatable choice. Potential enemies are developing long-range missiles and nuclear weapons. This also would mean creating a plethora of new, high-tech jobs.
Procure two of the new Gerald Ford Class aircraft carriers, at a total cost of perhaps $12 billion, a class already are designed and in production. These would be in addition to current construction plans. This would eliminate objections to the shrinkage of the Navy from 12 to 10 or nine carrier groups. At a time when even allied nations may not give the United States land basing rights for American military operations, carriers are critical. (Northrop Grumman Corp. [NOC].) This could involve ramping up to building two carriers every four years, instead of one, or some more modest acceleration in the production of flattops.
Instead of going from production of one Virginia Class submarine per year to two, increase the build to three annually. That still would be less than the expansion pace of the Chinese People’s Liberation Army Navy, including both nuclear and non-nuclear propulsion boats. This would consume perhaps $6 billion a year. (General Dynamics Corp. [GD] and Northrop.) These are super-stealth platforms, able to slip up unseen on any adversary or potential enemy, from the most primitive terrorist group, up to China or Russia.
Continue production of the F-22 Raptor, made by Lockheed Martin Corp. [LMT], by far the most advanced fighter on the planet, building another 200 of them, so the Air Force gets the 381 it requires rather than cutting off output at only 183 planes. This might require $27 billion extra at a marginal cost of $135 million a plane. (The marginal cost might be less, as volume rose with the increased buy.) At a time when China has about 1,400 radar-guided missiles aimed toward Taiwan, the United States needs super-stealthy aircraft that can take out those missile emplacements to halt a Chinese invasion of Taiwan.
Accelerate the F-35 Joint Strike Fighter program and restore earlier reductions in the buy. This might consume $20 billion for an extra 400 aircraft. (Lockheed) This is the successor to the Raptor.
The Army needs a new system to clear the fog of war, and would get that with new vehicles, aircraft and more, seamlessly connected by a near real-time communications system. The Future Combat Systems program would provide that, and $10 billion would help to speed development of the huge initiative. (Led by Boeing and Science Applications International Corp. [SAI])
Various missile defense programs could use more funding, such as for buying more Standard Missile-3 interceptors (Raytheon Co. [RTN]). Here, $5 billion could make a major difference in interceptor supplies.
Innumerable high-tech development programs are needed, ranging from vehicles able to take a hit from enemy fire, to a system capable of detecting and neutralizing terrorist roadside bombs. Perhaps $10 billion could save lives.
Thus far, the list has provided a huge boost to myriad major programs, and we have consumed just two-thirds of the $152 billion injection of funds.
Donnelly urged maintaining F-22 Raptor production, producing 20 extra planes each year. He also urges sustaining the C-17 cargo plane (Boeing), increasing Virginia Class submarine production from one to three a year, and building more Littoral Combat Ships, low-cost, high-speed coastal fighters that come in two versions, one by Lockheed (Marinette Marine and Bollinger Shipyards) with a semi-planing monohull, and the other by General Dynamics (Austal USA) that has three hulls, a trimaran. They were to cost $220 million each for the basic ship, before plug-in modules, but now seem likely to cost $500 million or so — still a bargain compared to the estimated $3.3 billion cost of a new DDG 1000 destroyer.
He also urged procuring four Army Stryker brigades, with 250 wheeled combat vehicles each year purchased for about $550 million.
As well, Donnelly recommends recruiting and training an additional 20,000 troops each year at a cost of $3.5 billion.
Now let’s look at what $8 billion could do for NASA:
With $7 billion extra, NASA would be halfway to eliminating the gap, a half-decade period when NASA won’t be able to transport even one of its astronauts to low Earth orbit, much less to the moon. The gap begins next year, with the mandated retirement of the space shuttle fleet, and ends in 2015 with the first flight of the next-generation U.S. spaceship system, Orion-Ares. (Lockheed for the Orion space capsule, and Boeing, Alliant Techsystems Inc. [ATK], and Pratt & Whitney Rocketdyne, a unit of United Technologies Corp. [UTX] for the Ares 1 rocket). During the gap, the United States will have to shell out millions to Russia to provide American astronauts with taxi service to space aboard Soyuz spacecraft. As things now stand, space shuttles must stop flying next year to free up money to develop Orion-Ares. But for $3 billion extra per year, the shuttles could fly for more than two years beyond the retirement date in October next year.
For another $1 billion, NASA science programs could be reimbursed, after their funds were raided to obtain money for returning the shuttle fleet to flight following the Space Shuttle Columbia disaster.
Clearly, the economic stimulus bill could provide an enormous boon to both DOD and space programs.
And this assumes the economic stimulus bill would total no more than $800 billion. But some experts advocate a bill far larger, perhaps $1.2 trillion. And this doesn’t count many more trillions proposed for financial industry bailouts, the auto industry assistance, and more.
Just a small slice of this gargantuan spending spree could yield palpable, significant benefits for the armed services, NASA, contractors and the aerospace workforce, while helping to better equip men and women in uniform who go in harm’s way, and to deepen our understanding and knowledge of the universe.