US Army chief information officer will depart in coming weeks

On the same subject

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  July 6, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  Opinion: Why Interest On Federal Debt Matters For Defense

  Byron Callan June 30, 2020 The COVID-19 pandemic has stoked consternation that U.S. defense spending is going to be significantly pressured in the 2020s. Congress will likely stick to the $740.5 billion defense discretionary top line agreed to in last year's budget deal for fiscal 2021. But the combination of trillions more in federal debt from higher spending and lower tax receipts this year and next and the probability that there will be future federal spending to better prepare for pandemics raise a higher probability of defense spending pressure. “Flat” was already the new “up,” but “flat” now may be a budget that does not keep pace with annual inflation. The fears may be that defense spending will decline in the 2020s after a couple of good years of largesse from Congress and the White House. Despite trillions in additional deficits and federal borrowing in 2020-21, there is one bright spot that indicates less dire defense spending pressures than now perceived—the interest on the federal debt. U.S. federal debt is comprised of debt held by the public and intragovernmental debt, which is owned by different federal trust funds, the largest of which is Social Security. As of May, total debt held by the public was $19.8 trillion, and intragovernmental debt was another $6 trillion. Often, these two sums are lumped together, but they should be treated separately. The interest paid on debt held by the public is dispersed by the Treasury in the form of outlays to the owners of that debt. The interest paid on intragovernmental debt is, in essence, interest the federal government pays itself. The Office of Management and Budget (OMB), in its annual projections of outlays, breaks out these two components of interest outlays to show net interest outlays. This is mandatory spending, and so it has been paid along with the other mandatory and discretionary funding the U.S. federal government provides. One of the silver linings of the pandemic has been the Federal Reserve's aggressive lowering of interest rates. This makes federal debt more affordable, much in the way that a lower interest rate on a home mortgage can make a place to live more affordable. The OMB projections released in February showed net interest outlays of $378 billion for fiscal 2021 rising to $665 billion by 2030. One could take issue with the deficit projections behind these outlay projects, as they may have rested on GDP growth expectations that were too optimistic and nondefense spending cuts that were not going to be realized. However, dividing interest outlays on debt held by the public by debt projections implied an interest rate of 3% or more over the forecast period. The pandemic has trashed those rate projections. Federal debt held by the public is offered in different maturities. Treasury bills, which mature in a year or less as of May, were 23% of the total debt held by the public. Treasury notes that mature in 1-10 years were 51%, and bonds that mature in 10-30 years were 12%. (There is another 10% of other Treasury instruments.) Rates now are much lower, although clearly that would only matter for new debt that is issued by the Treasury. The rate on a 90-day Treasury bill is currently 0.13%. On a five-year note, it is 0.33%, and on the 10-year note, 0.69%. The 30-year note rate is 1.4%. This implies that interest outlay projections should be declining, although new projections may have to wait until the White House releases its 2022 fiscal budget request and out-year projections, presumably in February-March 2021. Net interest outlays could be at least $100 billion less in 2022-23 than the February 2020 projections on higher debt but lower rates. In the scheme of total federal outlays, which the OMB projected to be $4.8 trillion for 2021, $100 billion is not a lot, but it indicates there is a bit more headroom for defense spending and other nondefense discretionary spending than a focus on federal debt alone might suggest. Federal infrastructure spending could be one area of more traction in the 2020s, and the issue of social justice may also spur more demand for federal resources. One outcome of the pandemic, however, will be to make defense expectations more sensitive to interest rate expectations. It is not too difficult to project scenarios with rising debt and interest rates that increase to more “normal” levels. The pandemic also underscores that the unthinkable should be given a bit more room on long-term projections. It is quite conceivable that a major military conflict, a massive natural disaster or another economic contraction could further add to federal debt in the 2020s. https://aviationweek.com/defense-space/budget-policy-operations/opinion-why-interest-federal-debt-matters-defense

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  July 9, 2020 | International, Other Defence

  House panel would block Pentagon from extra sway over nuclear weapons budget

  By: Joe Gould WASHINGTON ― House appropriators on Tuesday approved a spending bill that would block plans from defense hawks to give the Pentagon a stronger hand in crafting nuclear weapons budgets. The House Appropriations Committee passed their Energy-Water bill, which contained the provision, by a voice vote. The $49.6 billion spending bill contained $13.7 billion for nuclear weapons accounts ― a $1.2 billion increase over fiscal 2020 that's still $1.9 billion less than the president's request. Lead Republicans voiced opposition to the bill, arguing that Democrats had not consulted with Republicans on pandemic emergency funds in the bill and that Democrats included policy riders the White House will seek to cut. The top Republican on the House Energy and Water Development, and Related Agencies Subcommittee, Rep. Mike Simpson of Idaho, said the bill “still shortchanges funding for the nuclear weapons program.” “While I acknowledge the increase above last year, we must also acknowledge that the threats we face today are not the same threats we faced in the years immediately following the end of the Cold War,” he said. “We must adequately fund the activities necessary to maintain a safe, reliable and effective stockpile.” The bill would bar funding for the Pentagon-led Nuclear Weapons Council, and would prevent it from assisting with the budget of the National Nuclear Security Administration, a semiautonomous agency under the Energy Department. The Senate Armed Services Committee's version of the annual defense policy bill would allow the council to edit the budget request after the Energy Department crafts it and before the request is submitted to the White House budget office. The move was seen as giving the Pentagon extra sway to boost warhead programs and nuclear weapons laboratories. Its introduction came after Energy Secretary Dan Brouillette clashed with SASC Chairman Jim Inhofe, R-Okla., who backed a budget request for the larger number than Brouillette sought. The Energy-Water spending bill contains language ordering no funds “may be used in furtherance of working through the Nuclear Weapons Council to guide, advise, assist, develop, or execute a budget for the National Nuclear Security Administration.” Separately, the proposed bill would ban the Trump administration's reported plan to resume nuclear weapons testing. The bill would prohibit funding “to conduct, or prepare to conduct, any explosive nuclear weapons test that produces any yield.” “Critically, the bill would prevent the Trump administration from using any funds to carry out its dangerous and short-sighted plan to resume nuclear testing,” House Appropriations Committee Chairwoman Nita Lowey, D-N.Y., said in a statement. The Trump administration was reportedly discussing whether a “rapid test” could aid it in negotiations with Russia and China, as the White House seeks a trilateral nuclear weapons pact. The defense appropriations bill introduced Tuesday would also bar funding for explosive nuclear weapons tests. https://www.defensenews.com/congress/2020/07/07/house-panel-blocks-pentagon-from-extra-sway-over-nuke-budget/

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  April 3, 2023 | International, Naval

  Gilday expects new US Navy force study to call for more than 373 ships

  An upcoming analysis is expected to show the need for a larger fleet and a different composition, based on the 2022 National Defense Strategy.