Rumors Abound About Obama and Defense Spending

In a conventional move Obama delayed submitting his defense budget by two months, now rumors are out that at least a top line document will be submitted in early March. This document will at least lay out the total planned spending and how much each service will get and perhaps some of the larger programs and categories of spending. According to Bloomberg Obama plans to spend about $527 billion in FY10. This is more then the FY09 budget, but over $50 billion less then the budget plan of the outgoing Bush administration. To reach this goal one would expect significant cuts to the investments programs as most of the budget is for troops, their pay and benefits, and supporting current operations. If there are significant cuts to big ticket items like F-35 JSF, ship programs, and the Army’s Future Combat System (FCS) then the effect on the large defense contractors and their employees will be severe. Congress also will have the final say as they draft legislation on appropriations and have been loathe in the past to severely cut programs that are made in their district.