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defensenews.com

Vol. 31 No. 6 $4.50

F-35 Purchase DropPentagon officials

deny price impact of

reduced acquisition. 6

INVASION ON HOLD?Plans by Gulf partners

to enter Syria appear

shaky. 4BACK TO EUROPEUS Pivot to Asia de-

layed by return to

Europe. 8

WASHINGTON — With few surprisesin the budget request unveiled by the

Pentagon last week, reaction was largelymuted as the $582.7 billion spending lev-el complied with limits set by last year’s

budget deal.

During the rollout, defense officialstouted the budget’s efforts to balance

near-term priorities — including ongoingconflicts against the Islamic State andbolstering European defenses against

Russian aggression — with long-term ef-forts to stay ahead of potential peer and

near-peer adversaries of Russia, China,

North Korea and Iran.While the funding levels set by 2015’s

Bipartisan Budget

Act — $523.9 billionin base budget withan additional $58.8

billion in overseascontingency opera-tions (OCO) funds

— represented a $2.4 billion increase

from the previous year’s appropriations,the new levels still came in almost $22

Mike Morones/Staff

President Obama’s FY2017 budget is delivered to the Senate Budget Committee on Feb. 9.

Boosts Funds for European Initiative BY ANDREW CLEVENGERaclevenger@defensenews.com

See BUDGET, Page 18

Pentagon Budget Seeks ToLeverage R&D Investments

SPENDING PLAN

Related Stories:Military servicesand congressionalbudget coverage.Pages 6, 8, 10, 20

TEL AVIV — To facilitate Israel’s

long-term planning and spendingneeds, US President Barack Obama’sadministration is offering Prime Min-

ister Benjamin Netanyahu a consoli-dated aid package that essentiallyguarantees expanded top-line funding

from State Department and Pentagonaccounts each year for the next dec-ade, starting in 2018.

The proposed package, a follow-onto the $30 billion, 10-year memoran-dum of understanding signed in 2007,

would grant Israel more leeway — in-cluding reprogramming authority –over a considerably larger amount of

grant aid than that provided in the cur-rent agreement.

There’s just one catch: Israel will

have to forgo annual plus-ups to thepresident’s budget from Congress ex-cept for extreme emergency cases.

“The benefit is we won’t need to hag-gle every year, first with the admini-stration and then with Congress. We’ll

have a pretty much guaranteed top-line that will help us enormously inlong-term planning,” a recently retired

senior Israeli security official said.“The downside, of course, is we’ll

lose the ability for annual plus-ups on

missile defense, anti-tunnel capabili-ties and other programs funded by the

Pentagon in all but the most-extreme

See AID, Page 18

AID TO ISRAEL

Obama OffersIsrael 10-YearAid Package;There’s a CatchBY BARBARA OPALL-ROMEbopallrome@defensenews.com

AIR

LAND

SINGAPORE AIRSHOWAsian nations steadily

bolster air power Page 12

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February 15, 2016 defensenews.com | 3Celebrating 30 Years of Excellence

DefenseNews (ISSN 0884-139X)

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NEWS 4AIR 6LAND 8NAVAL 10

INTERVIEW 22COMMENTARY 24LAST WORD 26

DEPARTMENTS

26

AIRNEW FUNDING PROFILE FOR F-35

REFLECTS DROP IN ACQUISITION 6LANDUS ARMY PIVOTS TO EUROPE AS

RUSSIAN AGGRESSION GROWS 8

NAVALUS NAVY ABSORBS 3.5% FUND-

ING DROP IN FISCAL 2017 10

FOCUSOCO FUNDING GROWING DEEP

ROOTS IN BUDGET PLANNING 18

WHAT’S INSIDE

10

Exclusive interview with Pentagon Comp-troller Mike McCord on the Obama admini-stration’s 2017 defense budget request,trade-offs, program decisions, future fund-ing levels, the overseas contingency opera-tions account, energy prices and more.

LAYING OUT THE DETAILS OF DOD’S2017 BUDGET PROCESS

WATCH DEFENSE NEWS WITH VAGO MURADIAN

Watch Sundays at 11 a.m. ET on WJLA-TV inWashington, on American Forces Networkworldwide or at defensenews.com.

New Royal Navy General Purpose Frigate

To Be Known as Type 31

The Type 31 program emerged as part of an

SDSR announcement cutting numbers of new

Type 26 anti-submarine warfare frigates to eight.

defensenews.com/naval

US Air Force Updates Long Range Strike-

Bomber Cost Estimate

Its FY17 budget submission updated the cost

estimate for the LRSB, reflecting a reduction in

planned funds for the program’s development.

defensenews.com/air-space

Oshkosh To Continue Joint Light Tactical

Vehicles Production During Lawsuit

The US Court of Federal Claims has denied

Lockheed Martin’s request to halt the company’s

work on its Humvee replacement.

defensenews.com/land

WHAT’S ONLINE

4 | defensenews.com R1 February 15, 2016Celebrating 30 Years of Excellence

DUBAI and BRUSSELS — As theUnited States receives commitments

from Gulf Arab allies to contributemore to a coalition campaign in Syria,doubts remain because of their ongoing

military involvement in Yemen.Furthermore, statements by un-

named Saudi officials earlier this

month about a force of 150,000 – includ-ing troops from Gulf CooperationCouncil (GCC) partners Sudan, Egypt

and Jordan – being prepared to invadeSyria from Turkey have been rebuffedby at least two members of the anti-Is-

lamic State coalition.A Jordanian official confirmed the

country will not participate in any Turk-

ish- or Arab-led Syrian invasion unless

mandated by the United Nations, led byWestern forces and coordinated with

Russia.

“Jordan is not going to send groundforces into Syria unless these troops are

led by Americans and British,” the Jor-danian official said speaking on condi-tion of anonymity.

“We have very long borders with Iraq

and Syria which are more than 550 kilo-meters. Any ground troops, includingJordanian forces, should be sent after a

UN approval and after full coordinationwith Russia.”

On Feb. 9, a senior Kuwaiti official

told Reuters that despite Kuwait’s back-ing of international efforts against hard-line Islamist groups, the Gulf Arab

state’s constitution prevents it fromfighting in anything but defensive wars.

“Kuwait stands shoulder-to-shoulder

with our brothers in Saudi on all fronts.We are always ready and able to provide

what is needed to our Gulf partners

within the confines of our constitu-tion,” Sheikh Mohammad al-Mubarak

Al-Sabah, Kuwait’s minister for cabinet

affairs, told Reuters in Dubai.He indicated that support could be

limited to only intelligence-sharing and

the provision of establishments to helpthe coalition coordinate.

With respect to ground operations,

US Defense Secretary Ash Carter saidon Feb. 11 in Brussels that a variety ofoptions have been discussed with Arab

partners.“First of all, there is training of both

military forces and police forces. We

need forces on the ground that partici-

pate in training. Then enabling, includ-ing even accompanying partner forces.... We obviously talked about, but I’m

not going to talk about it here, specialforces that have some very special anddistinctive capabilities,” he said.

“We also talked about logistics sup-port, sustainment, rebuilding of a kindthat is going to have to go on in Ramadi.

So all of these are activities that coali-tion partners, to include Saudi Arabia,will participate in,” he added

Carter also said he does not think theSaudis want to fight a two-front war inSyria and Yemen, but that they do have

the capability and willingness to put theresources into the anti-Daesh fight.

According to National Defense Uni-

versity professor Paul Sullivan, SaudiArabia should be careful to not over-

stretch its military and diplomatic ef-

forts as Syria could be “quicksand” forthem.

“If Saudi Arabia, the UAE and other

GCC states do not get involved, a solu-tion to the Syria problem may only be atemporary one,” he said. “Many think

that the solution to ISIS has to comefrom Muslim soldiers, sailors and air-men. That may have some accuracy to

it. ... The really big question on Syria iswhether getting more militarily in-volved will help resolve those threats or

make them worse.” DN

Fayez Nureldine/AFP/Getty

Saudi Special Forces demonstrate their skills during a May graduation ceremony in Riyadh.

Syria: ‘Quicksand’ for Saudi Forces?Yemen Conflict Continues To RageBY AWAD MUSTAFA AND AARON MEHTAamustafa@defensenews.com;amehta@defensenews.com

After Blimp’s Wild Ride, JLENSProgram Will Fly Again, NORAD Says

After an embarrassing incident last

fall when the Joint Land Attack CruiseMissile Defense Elevated NettedSensor System (JLENS) broke free in

Maryland and floated into Pennsylva-nia dragging its mooring line, it ap-pears the controversial surveillance

blimp program will fly again.Investigations are completed and

JLENS’ revival is being closely coor-

dinated. The system will require put-ting together a new fire controlaerostat, training personnel, imple-

menting recommended changes andprocedures, and more money, Maj.Beth Smith, a spokeswoman for North

American Aerospace Defense Com-mand (NORAD) and US NorthernCommand, told Defense News.

NATO To Backfill AWACS, AssistEurope With Migrants

NATO has agreed in principle to use

its fleet of E-3A AWACS to backfillnational requirements, in order to freeup nations to use their own capacity

in the fight against the Islamic Stategroup.

The alliance will also immediately

task its Standing Maritime Group 2 tothe Aegean sea to monitor the flow ofmigrants fleeing Syria, as part of a

plan put forth by Greece, Turkey and

Germany.The news was announced by Secre-

tary General Jens Stoltenberg follow-ing a NATO ministerial, during whichUS Defense Secretary Ash Carter

pushed for a greater role for NATO inoperations over Iraq and Syria.

Finland Aiming To Add OffensiveEdge To Cyberwar Arsenal

The planned reform of Finland’s

cyber defense and intelligence-gather-ing laws will likely include provisions

to give the military and national secu-

rity services new effective legal toolsto launch offensive operations againsthostile attacks in the cyberwarfare

space.The legislative reform initiative has

been tasked to the so-called Parlia-

mentary Monitoring Group (PMG) onintelligence legislation.

Under present law, both the military

and the Finnish Security IntelligenceService have only limited powers to

acquire intelligence, while their direct

operations are effectively restricted tointelligence gathering inside Finland’sborders.

IN BRIEF

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• Land and maritime radar modes, Automatic Identification System (AIS)

• 30+ hours endurance

• Operating radius > 1,000 nm

Predator XP

6 | defensenews.com February 15, 2016Celebrating 30 Years of Excellence

WASHINGTON — The Pentagon hasunveiled a new funding profile for theF-35 joint strike fighter, reflecting a

drop in fighter jet acquisition over thenext six years across the US services,international partners and foreign cus-

tomers.Lockheed Martin and the F-35 joint

program office will build 20 fewer

planes over that timeframe for the USAir Force, Navy, Marine Corps, interna-tional partners and foreign customers,

JPO Chief Lt. Gen. Chris Bogdan told re-porters during a Feb. 10 media round-table. Instead of building 893 fighter

jets from fiscal 2016 to FY21, as planned

last year, the government and industryteam will produce 873, he said.

Bogdan downplayed the impact of thedrop, saying the reduction will translateinto a unit cost increase for the US ser-

vices and international partners of lessthan 1 percent.

“I can tell you: The price difference

between 893 and 873 airplanes, I’m notsure I can even measure that,” Bogdansaid. “It’s ... way less than 1 percent in

overall price to everybody.”Bogdan’s math includes Canada’s

planned 65-aircraft purchase, although

new Prime Minister Justin Trudeau haspromised to pull out of the partnership.The 873 figure does not include any po-

tential new foreign military sales.The JPO will also generate savings

with a planned bulk purchase of the air-

plane, or “block buy,” beginning inFY19, Bogdan said. The Pentagon’s lat-est budget request reflects a decision

not to include advanced funding inFY17 for a multiyear F-35 buy to start asplanned in FY18, but the department

does allot money in FY18 for a blockbuy to start in FY19, Bogdan said.

The deal would cover FY19 through

FY21and is expected to save over $2 bil-lion in total, he stressed.

International partners and foreign

customers can choose to move forwardwith a block buy starting as soon asFY18 without US participation, Bogdan

said. The Pentagon can then choose to

opt in to the deal in later years. The changes to the F-35 blueprint re-

flected in the Pentagon’s FY17 budget

rollout Feb. 9 sent observers scurryingto calculate the implications for the in-

ternational program. Each of the US services saw changes

in its F-35 buy over the five-year de-

fense plan, but the net change for theJPO and Lockheed Martin was not im-mediately clear.

For the Pentagon, not including inter-national partners or foreign customers,the total F-35 buy across the Future

Years Defense Program (FYDP) has de-

creased 8 percent, from 436 to 404,spokesman Mark Wright wrote in a Feb.

10 email. This includes the Air Force’s

reduction of 45 F-35As and the Navy’snet increase of 13 F-35Bs and F-35Cs.

The Defense Department’s total

planned buy has not changed, Wrightstressed.

“The total planned buy for the depart-

ment has not changed but the new pro-files ensure the department pursues themost cost-effective way to field fifth-

generation fighters,” Wright said.For the Air Force at least, the change

reflects a deceleration of the planned

ramp up in production to 60 aircraft a

year starting in FY18. The FY17 fundingprofile shows the service will not get to

that rate until FY21.However, since all models US and in-

ternational models are built on the

same line in Fort Worth, Texas, thereshould be no significant changes to pro-duction, said Lockheed spokesman

Mike Rein. Lockheed is preparing toramp up production to more than 150airplanes per year in the early 2020s.

Air Force Secretary Deborah LeeJames echoed Bogdan’s and Lock-heed’s statements during a Feb. 10 hear-

ing before the Senate Appropriations’Defense subcommittee, stressing thatdespite the aircraft deferred across the

FYDP, the F-35 unit cost will not changesubstantially.

“Because there are FMS purchases in

the works and other services are buyingF-35s, we believe that this will allow usto still have a stable unit price,” James

said. Pentagon Comptroller Mike McCord

took a different tone, however. Al-

though the reduction to 404 total AirForce, Navy and Marine Corps F-35s

over the next five years is not expected

to produce a significant change in theunit cost, it is not clear the Pentagonwill be able to get back to the planned

production rate, he said.“We are trying to get it back up to

where we want it to be across the

FYDP,” McCord said Feb. 9 at the Penta-gon, referring to the Future Years De-fense Program. “But it’s just a lot of

money too, and it’s unclear that we will

be able to get this program back to theramps that we had hoped for previous-

ly.” DN

JSF PRODUCTION

F-35 Production To DropBy 20; Air Force OfficialsDownplay Price Impact

Samuel King Jr.

Senior Airman Herbert Tucker, 33rd Aircraft Maintenance Squadron, marshals in anF-35A Lightning II for a hot pit refueling session at Eglin Air Force Base, Fla.

BY LARA SELIGMANlseligman@defensenews.com

“I can tell you: Theprice differencebetween 893 and 873airplanes, I’m notsure I can evenmeasure that.”Lt. Gen. Chris Bogdan

F-35 JPO chief

Air Force FY17 Budget Request:

n Topline is $166.9 billion: $46.9 billionfor O&M; $22.4B for procurement; $19.6Bfor RDT&E; $12.3B for OCO

Fully funds Long Range Strike-Bomberand KC-46 tanker n Defers five F-35As, a total of 45

aircraft over five years n Postpones retirement of A-10 Wart-

hog fleet and EC-130 Compass Call fleet n Moves forward with Joint Surveil-

lance Target Attack Radar System recap-italization, Combat Rescue Helicopter, T-Xadvanced trainer replacement, Air ForceOne recapitalization n Slows procurement of C-130Js,

deferring three aircraft in FY17 and a totalof eight aircraft over three years n Delays upgrades to some fourth-

generation aircraft, for example the F-16missile warning and radio systems n Restocks munitions expended in the

fight against the Islamic State, requestingfunds through OCO for Joint Direct At-tack Munitions, AGM-114 Hellfires, andSmall Diameter Bombs n Maintains plan to divest U-2 in FY19 n Adds 24 unmanned MQ-9A Reapers

through OCO

FAST FACTS

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8 | defensenews.com February 15, 2016Celebrating 30 Years of Excellence

WASHINGTON — For years, the USadministration has cast a longing gazeon a pivot to the Asia Pacific but wars in

the Middle East have managed to divertattention.

And now Russia has re-emerged as

the number one threat to the US. So ifthere’s a pivot happening anywhere it’sto Europe, and it’s clear the Army will

lead.President Obama’s last budget re-

quest more than quadrupled the

amount of overseas contingency opera-tions (OCO) money funneled into whatis being called the European Reassur-

ance Initiative (ERI).The $3.4 billion in fiscal 2017 funding

is part of an effort to deter Russia’s mil-

itary aggression in Eastern Europe andto bolster allies’ defense capabilities.

And it’s clear that the majority of

those dollars — $2.8 billion of it — areArmy green.

The majority of the Army’s OCO boost

in the budget is due to ERI, Maj. Gen.Thomas Horlander, the Army’s budgetdirector, said.

Prior to 2014, before Russia annexedCrimea and invaded Ukraine, it would

have been hard to imagine seeing a re-

newed Cold War-like posture in Europe.“I never thought I’d see a land war in

Europe again but when I went to Uk-

raine you saw it,” Maj. Gen. Walter Piatt,director of operations, readiness andmobilization in the Army G-3, said.

Army personnel has declined inEurope from roughly 200,000 during the1980s to around 33,000 in 2015, accord-

ing to a Center for Strategic and Inter-national Studies report, released thismonth, evaluating future Army force

posture in Europe. The US had twoArmy Corps with heavy armored forcesduring the Cold War.

Now the Army has only two perma-nently stationed brigade combat teams,has closed over 100 sites since 2006 and

is now concentrated in Italy and Ger-many, not near NATO’s eastern flank,the report notes.

A defense official speaking to De-fense News prior to the budget releaserecalled iconic photos of tanks coming

out of Europe and noted now therewould soon be photos of tanks comingback in.

Retired Adm. James Stavridis, whoserved both as the commander ofNATO and US European Command,

painted a picture of the European di-lemma during a recent House ArmedServices Committee hearing.

The Russians are conducting militaryoperations with “cleverness,” he said.“Some have called this hybrid warfare.

It’s a mix of special forces; informationwarfare; cyber ... and this element ofsurprise, building real ambiguity into

their maneuvers.”

But what is even more worrying, Eve-lyn Farkas, former deputy assistant sec-

retary of defense for Russia, Ukraine

and Eurasia, said, is Russian militarydoctrine that permits the country to re-

spond to a conventional attack with nu-clear weapons — from an arsenal thathas already outpaced the US’ aging one.

Part of the solution is to ramp up theUS military’s presence in Europe to del-icately deter Russia’s aggression in

countries along its border.That is where the US Army comes in.

In fiscal 2017, $727 million will go to-

ward “increased presence.”

It’s not just about parading tanks

around the streets of European towns;$50 million will fund building “partnercapacity.” A total of $89 million will ex-

pand the scope of 28 joint and multina-tional exercises annually.

The biggest chunk of funding — $2

billion — is for putting a “heel-to-toe”armored brigade combat team (ABCT)in theater 24/7 on a rotational basis on

top of the Stryker brigade and infantrybrigade already in Europe. The fundingwill also cover more aviation in theater.

A total of $1.8 billion of the ERI fund-ing will pay for prepositioned equip-ment to include an entire ABCT static

set of equipment, Horlander said. The Army has already established an

“activity set” — separate sets of equip-

ment outside of prepositioned stocks

— that builds out a brigade combatteam.

The countries that will see continu-

ous rotations are, thus far, Bulgaria, Ro-mania, Poland and the Baltics, a senior

defense official said in Brussels.However, prepositioned stock will

likely be stored in facilities in countries

like Germany because the infrastruc-ture, dating back to the Cold War, is al-ready there.

The Army is looking at rotations be-ginning on Oct. 1. Another unit will ar-rive in April 2017. The service is still

identifying what unit will deploy first, a

senior military official in Brussels said.

Army officials are still working outwhich ABCT might go to Europe andwhether rotations will be nine months

or shorter, Piatt said.The service is also speeding up its

plans to increase the lethality of its

Stryker armored personnel carriers, anurgent requirement coming straight outof Europe.

The $2.8 billion in ERI is just the be-ginning, a defense official said. “Whatyou are seeing is just a down-payment

for the US commitment to securingEurope and getting back in.”

More is bound to come in fiscal 2018

to bolster the Army’s European pres-ence.

For example, the official said, while

not in the fiscal 2017 budget, the Ar-mored Multi-Purpose Vehicle that BAESystems is building for the Army could

see procurement accelerate in the fis-cal 2018 budget through OCO dollars inorder to get more modernized equip-

ment to Europe.

The Army will also work to enhanceinteroperability among allies, being

able to talk and share information on

the move, according to Piatt.Another gap in capability, Farkas ob-

served, is the lack of intelligence, sur-veillance and reconnaissance. “Weneed more ISR for the US European

Command.” DN

FOCUS ON EUROPE

US Army Pivots to EuropeAs Russian Threat GrowsAsia-Pacific PlansTake Back SeatBY JEN JUDSON jjudson@defensenews.com

AND AARON MEHTAamehta@defensenews.com

PETRAS MALUKAS, AFP/Getty Images

Soldiers of the US Army's 3rd Squadron, 2nd Cavalry Regiment meet with localresidents upon arrival during the "Dragoon Ride" exercise in Vilnius, Lithuania, onMarch 22, 2015. The Dragoon Ride practices moving manpower and heavy vehicles.

During the Cold War of the1980s, the US Army had about200,000 personnel stationed inEurope. Following years ofdrawdowns, that figure fell toabout 33,000,with more than 100sites closed and forces concen-trated in only two countries. Butsince Russia annexed Crimeaand invaded Ukraine, and hasadopted an aggressive policyelsewhere in Europe, the pat-tern of reversed.

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©2016 Orbital ATK. All Rights Reserved. D16_05660

10 | defensenews.com February 15, 2016Celebrating 30 Years of Excellence

WASHINGTON — The US Navy is ab-sorbing a $7 billion reduction in fiscal

2017 funding, about 3.5 percent overlast year’s plan, according to newly re-leased budget documents. The service

is reducing the number of ships it’s buy-ing while adding more aircraft, and uni-formed personnel also are being cut, up

to as many as 6,400 sailors below previ-ous forecasts.

The Navy Department’s top line drops

to $152.9 billion in baseline fundingagainst last year’s projection of $159.9billion. The 3 percent dip below projec-

tion is planned to last just this year, ris-ing in 2018 to $159.7 billion. Projectedbaseline funding drops again to about

$158 billion in 2019, to $155.7 billion in2020 and up to $157.5 billion in 2021.

Overseas contingency operations

(OCO) funding remains steady, $9.5 bil-lion in 2017 against $9.4 billion last year,and includes six aircraft — two F/A-18

Super Hornets and four RQ-21 Black-jack drones for the Marines.

The Navy is planning on a uniformed

force of 322,900 sailors in 2017, downfrom 327,300 authorized in 2016 and lastyear’s forecast of 326,500 for 2017. Per-

sonnel levels continue well below pre-vious forecasts through 2021 — 322,200in 2018, down 6,000 from 328,200;

324,400 in 2019, down 5,400 from329,800; 323,600 in 2020, down 6,400from 330,000; and 323,100 in 2021 — the

year added to this year’s Future Years

Defense Plan (FYDP).

The personnel reductions appear tostem from two major developments, the

permanent elimination of a tenth carri-er air wing and four aviation squadrons,and a new request to take seven cruis-

ers out of service in 2017 to undergomodernization — a major change toprevious congressional directives.

Carrier Air Wing 14 already was tem-porarily deactivated in 2013, a move tak-en in conjunction with the temporary

lowering of the number of active carri-ers from 11 to 10, necessary because theelderly carrier Enterprise was at the

end of her service life before her re-placement, the George H. W. Bush,could enter service.

A Navy source said the decision was

made due to fiscal pressures, andclaimed the service can meet operation-

al requirements with nine active wings.Four aircraft squadrons are being de-

activated or canceled, the Navy con-

firmed, with another shifting from seato ground-based operations. The squad-

rons being deactivated are Strike Fight-

er Squadron 15 (VFA-15) from Naval AirStation Oceana, Virginia, flying legacy

F/A-18 Hornet aircraft; Carrier Airborne

Early Warning Squadron 112 (VAW-112)out of Naval Base Ventura, California,flying E-2C Hawkeyes; and Helicopter

Sea Combat Squadron 15 (HSC-15) fromNaval Air Station North Island, Califor-nia, flying MH-60S helicopters. The

planned standup of Helicopter Mari-

time Strike Squadron 76 (HSM-76) willbe canceled.

Electronic Attack Squadron 134(VAQ-134) from Naval Air Station Whid-bey Island will transition to become a

land-based expeditionary squadron.The service is also seeking to modify

its controversial cruiser-modernization

plan, needed to upgrade 11 cruisers toremain effective into the 2030s. Fourships have already been funded — two

in 2015 and two in 2016 — and Congresshas instituted a so-called “2-4-6” direc-tive, where only two are budgeted per

year, each ship can remain out of ser-vice for no more than four years, and nomore than six may undergo moderniza-

tion at any one time.

Under the new scheme, the Navywants to fund all remaining seven ships

in 2017, a plan that would mean that bythe end of that year all 11ships would beout of service. The move, a Navy

spokesperson said, would save $926million across the FYDP and overall

would save more than $3 billion in oper-

ations and maintenance. The Navy notes that the request is not

consistent with existing law and needs

congressional approval.It is not clear from early budget docu-

ments what the status of three LSD

landing ship docks is. In shipbuilding, the Navy is asking for

seven new ships, essentially down one

from last year’s plan, when Congress

brought two ships scheduled for 2017

forward into 2016. The service reducedits ship buy by one littoral combat ship,asking for two ships instead of last

year’s plan for three or Carter’s Decem-ber direction to buy just one. The LCSplan through the FYDP now reflects

Carter’s direction, one ship per yearfrom 2018-2020 with two in 2021.

Asked why the change to two LCSs,

Deputy Defense Secretary Robert Worknoted that Carter “is very flexible onthese points. The Navy said in terms of

competition it would help if both [ship-building] yards had a ship in ‘17, bothcould compete. It doesn’t change the

40,” — the total number of LCSs Carterdirected to be built — “it was just aslight change in profile.”

Two Virginia-class submarines, two

Arleigh Burke-class destroyers and oneLHA(R) amphibious assault ship round

out the 2017 shipbuilding request. Shipbuilding plans through the FYDP

remain mostly steady, with two subma-

rines and two destroyers planned foreach year through 2021. In that year,however, only one attack submarine is

planned, but the first Ohio-class re-placement submarine makes its debut.

The next carrier remains in 2018, but the

first T-ATS salvage ship tug has beenpushed back from 2017 to 2018.

The overall number of manned and

unmanned aircraft planned to be pur-chased for the Navy and Marine Corpsin 2017 remains at 94. The most signifi-

cant change is the insertion of 14 F/A-18Super Hornets planned for 2018, a movedirected by Carter that reverses an ear-

lier Navy decision to end procurementof the Boeing-built aircraft.

Buys of the F-35C carrier version of

the joint strike fighter show no overallchanges until 2020, when the plannedpurchase of 12 aircraft jumps to 18, with

24 forecast for 2021. A total of 64 F-35Csare planned through the FYDP. Buys ofthe F-35B Marine Corps variant rise by

two aircraft in 2017 to 16, but remain as

planned in later years, with a total of 97through 2021.

Procurement of the MV-22B Osprey

drops by two aircraft per year through2020, with six aircraft per year for the

Navy’s new carrier onboard deliveryversion. DN

Staff writer Meghann Myers contributed.

NAVAL BUDGET

US Navy Absorbing $7B, 3.5% Cut in Budget

Anderson W. Branch/US Navy

The US Navy is cutting a carrier air wing, including four aircraft squadrons, and morethan 3,000 sailors in its 2017 budget request.

Ships, PersonnelFace ReductionsBY CHRISTOPHER P. CAVASccavas@defensenews.com

Under the Navy’s funding plan,procurement of the SM-6 ballisticmissile defense missile continuesat 125 weapons per year; annualbuys of AMRAAM increase be-tween nine and 22 weapons peryear through 2020; and purchasesof the AGM-88 Advanced Anti-Radiation Guided Missile drop by43 weapons in 2017, 20 in 2018, 114in 2019 and 163 in 2020.

FAST FACTS

OHIO REPLACEMENT SSBN

BUILDING THE FUTURE – TODAY

www.gdeb.com

General Dynamics Electric Boat has demonstrated a new method of constructing the next-generation SSBN that will save millions of dollars per ship, a decade before work begins. One Navy admiral called it ‘The most successful prototype program I have ever been involved with.’ It’s part of the Navy-EB commitment to controlling costs of a program vital to national security.

The World Demands Deterrence...The Times Demand Affordability

12 | defensenews.com February 15, 2016Celebrating 30 Years of Excellence

fellow and coordinator of the MilitaryTransformations Program at Singa-

pore’s Rajaratnam School of Interna-tional Studies.

China’s traditional numerical superi-

ority is increasingly complemented byat least near technical equivalence withits main regional rivals, said Douglas

Barrie, senior fellow for military aero-space at the International Institute forStrategic Studies, London.

“The Chengdu J-10 and Shenyang J-11

and the Russian Su-35 will provide thebasis of a capable fighter combat in-

ventory in the 2020s,” he said.

“Top tier air forces will face chal-lenges and choices in balancing invest-

ing in platforms able to be operated inhighly contested air space or increas-ingly relying on stand off weapons and

systems,” Barrie said.

Regional responses to China’s belli-

cose behavior and North Korea’s errat-ic threats to develop missiles andnuclear weapons include midlife up-

grades to F-16 fighter aircraft in SouthKorea, Taiwan and Singapore, the de-velopment of new indigenous fighter

aircraft, such as Korea’s KF-X program

and Japan’s stealth X-2 Shinshin fight-er, and upgrades of indigenous fighters,

such as Taiwan’s Indigenous DefenseFighter.

Bitzinger said that some countries

are naturally worried that a more mod-ernized Chinese Air Force, especially

its missile forces, could severely dam-

age air bases or destroy them. This hasled to requirements for short takeoff/

vertical landing aircraft such as the

F-35B fighter, refurbished AV-8 Harri-ers and V-22 Osprey transports.

The F-35B is now being procured by

Australia, Japan and South Korea, withexpected purchase by Singapore in the

TAIWAN — China’s military modern-

ization effort continues to drive de-fense procurement in Asia as Beijing

develops fifth-generation fighter air-craft, procures Russian Su-35 aircraft,builds aircraft carriers, extends the

range and punch of its ballistic missileforce, pushes to dominate the South

China Sea, and threatens to invade Tai-

wan and occupy the Japanese-con-trolled Senkaku Islands in the East

China Sea.

“China’s increased militarization ofthe South China Sea, and its growinganimosities with Japan, are driving

many in the region to think about pro-curing additional firepower as a hedgeagainst a more powerful and aggressive

China,” said Richard Bitzinger, senior

Asian Procurement Takes CueFrom Chinese Modernization

BY WENDELL MINNICKwminnick@defensenews.com

GREG BAKER/AFP/Getty Images

A Chinese People's Liberation Army AirForce KJ-2000 airborne early warningand control aircraft, left, flies withChengdu J-10 fighter aircraft during amilitary parade at Tiananmen Square onSept. 3, 2015.

ASIA-PACIFIC

SEE CHINA PAGE 15

Some airshow officials estimatethat Asia-Pacific defense budgetswill reach about $612 billion by2018, and that more emphasis isgoing toward military procurementand research and development.

Aircraft expected expected toattend this year’s airshow includethe F-22 Raptor, Singapore’s F-16and F-15SG fighters, AH-64DApache helicopters, the DassaultRafale fighter, the Su-30MKMfighter, Airbus A400M and the V-22Osprey.

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manufacturer. Whatever your mission, Gulfstream delivers.

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SEOUL — South Korea is pushing fordeployment on its soil of a US high-alti-tude air defense system as North Kore-

an missile threats expand.The move has stoked fears in China,

which believes deployment of the Ter-

minal High Altitude Area Defense(THAAD) system could help Washing-ton to expand its military power in the

region.South Korea is prioritizing THAAD

deployment with US Forces Korea

(USFK) rather than purchasing theweapon system.

“Deployment of the THAAD system

needs to be seen in the perspective ofnational defense and security,” DefenseMinister Han Min-koo said on Jan. 25

during his interview with a local TV sta-

tion. “There is a limitation to our capa-bilities, so there is a military need for a

thorough review of the THAAD.”

His comments came on the heels ofPresident Park Geun-hye’s support for

the THAAD deployment.“The deployment of THAAD will be

considered based on our security and

national interests and also by taking

into account the North’s nuclear and

missile threats,” Park said in a national

address on Jan. 13.Seoul’s increased interest in THAAD

came after North Korea conducted its

fourth nuclear bomb test Jan. 6. Previ-ously, Seoul claimed it could defendagainst North Korean missile threats

with its own low-tier missile defensenetwork, dubbed KAMD, includingused PAC-2 systems bought from Ger-

many.“A deployment of THAAD is an inev-

itable option now for South Korea given

the escalating threats of North Korea’smissile technology,” said Kim Dae-young, a research member of the Korea

Defense & Security Forum, a Seoul-based private defense think-tank.

Should the North fire nuclear-tipped

missiles toward the South, Seoul has

few options as the PAC-2 systems canonly shoot down missiles at an altitude

of 15 kilometers, Kim noted.

“THAAD is designed to intercept mis-siles at an altitude of 40 to 150 kilome-

ters using a hit-to-kill approach. Thatmeans there are double chances toshoot down incoming missiles,” he

said.

The cost for deploying THAAD is ahot-button issue. South Korean defenseofficials said at least two THAAD bat-

teries should be deployed to helpthwart the North’s missile attacks.

Operating a single THAAD unit is esti-

mated to cost about $1.6 billion. Oneunit consists of six truck-mountedlaunchers, 49 interceptors, a fire con-

trol and communications unit and anAN/TPY-2 radar.

South Korea pays about 50 percent of

costs for the presence of USFK on itssoil under a cost-sharing pact. OnceUSFK decides to introduce THAAD bat-

teries, Seoul’s burden-sharing could in-crease, according to defense sources.

“The issues of costs and sites for the

THAAD deployment are expected tocause controversy domestically, as wellas backlash from China,” Kim said.

Chinese Foreign Ministry spokesper-son Hua Chunying said that even whenpursuing their own security, countries

“should take into account others’ secu-rity interests as well as regional peaceand stability.”

Defense analysts said Beijing is par-ticularly worried about the THAAD ra-dar, an X-Band active electronically

scanned array (AESA). If it were de-ployed, the land-based radar’s detec-tion range could extend as far as 1,800

kilometers, meaning its coverage couldreach well beyond North Korea andinto China.

“THAAD deployment could bring asevere shock to the security status quothat exists between China and the US,

as well as with Russia,” said Chineseanalyst Zheng Jiyoung of Fudan Univer-sity.

South Korea also began its multi-billion-dollar project to develop an in-digenous KF-X fighter jet over the next

decade.

On Jan. 21, the Defense AcquisitionProgram Administration (DAPA) and

Korea Aerospace Industries (KAI),

main contractor for the KF-X program,held a meeting to launch the fighter de-

velopment project.KAI is supposed to develop six test

fighters by 2021 before the full-scale de-

velopment begins by 2026, according toDAPA officials.

“KAI will manufacture 120 fighter jets

from 2026 through 2032 to replace theAir Force’s aging fleet of F-4 and F-5fighters,” DAPA Commissioner Chang

Myung-jin said. DN

Lockheed Martin

South Korea has shownincreasing interest in acquiringthe Terminal High Altitude AreaDefense system to counter NorthKorean threats.

COUNTERING N. KOREA

S. Korea Eyes THAADDespite China’s FearBY JUNG SUNG-KIjsungki@defensenews.com

Special Report

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Significant disabilities can’t keep her from solving IT problems.

But misperceptions can.

not-too-distant future. Taiwan has alsorequested the F-35B, but for political

reasons related to Beijing’s lobbying ef-forts in Washington this might be im-possible.

The US denied Taipei’s procurementrequests for Block 50/52 F-16C/D fight-ers to replace aging Mirage 2000 and

F-5 fighters, and analysts doubt Wash-ington would anger China by releasinga more advanced fifth-generation

stealth fighter, like the F-35. Instead,US government sources indicate Tai-wan will be offered refurbished AV-8

Harrier jump jets to fulfill the verticalrequirement.

The vertical requirement in all four

countries is in response to China’sgrowing arsenal of ballistic and cruisemissiles. In the Taiwan scenario, China

has allocated about 1,400 short-rangeballistic missiles to pulverize air bases,destroy command-and-control nodes,

and eliminate ground-based air defensebatteries. The only option to maintain acredible air power deterrence is pro-

curement of either the F-35B or refur-bished AV-8s, which can be hiddeninside Taiwan’s mountainous interior.

China’s threat to offshore islands hasalso created an interest in vertical land-ing aircraft capable of transporting

troops and supplies long-distances athigh speeds. The tiltrotor Bell/BoeingV-22 Osprey is on order by the Japanese

military and South Korea and Singa-pore have expressed interest. The Os-prey will be on display at the Singapore

Airshow, Feb. 16-21.The ballistic missile threats from not

just China, but North Korea, have ex-

panded interest in ground-based air de-fense missile systems, including theTerminal High Altitude Area Defense

(THAAD) system for South Korea andnew Patriot Advanced Capability-3(PAC-3) batteries for Japan and Tai-

wan.Taiwan recently installed an ad-

vanced long-range early warning radar

along its west coast that can peer deep-ly into China’s interior and monitor not

only missiles but fighter aircraft activ-

ity. Japan has been beefing up its signalintelligence (SIGINT) and radar facili-ties along the Ryukyu Island chain.

Taiwan has one of the most advancedSIGINT networks in the world, with ajoint US National Security Agency

(NSA) and Taiwan National SecurityBureau (NSB) high-frequency/direc-tion finding antenna facility on Yang-

mingshan Mountain, just north ofTaipei, and NSB antenna farms in Lin-kou in the north and Betel Nut Village in

the south.

A retired US NSA source whoworked at Pingtun Li said the US gath-ers about 70 percent of its signal intelli-

gence on China from Taiwan facilities.Airshow officials have indicated that

by 2018, defense budgets across the

Asia-Pacific are expected to grow bymore than 19 percent to about $612 bil-lion. DN

ASIA-PACIFICCHINA FROM PAGE 12

16 | defensenews.com February 15, 2016Celebrating 30 Years of Excellence

Special Report

the dead-end nature of the costly F-2program, ASDF’s most likely scenario

will be some additional F-35s and moreF-15 upgrades. Japan might even con-sider buying more up-to-date F-15s, but

given the funding priority of the first 42F-35s, cash for more F-15s is unlikely tobe provided, he said.

“One thing’s certain: The F-15 fleetwill be the most important JASDF com-ponent for decades to come. In terms of

range and payload the F-15s are hugely

important, and upgrading them will be avery high priority. They’re synergistic

with the F-35s. Upgrading the F-2 fleetis somewhat tertiary in terms of priori-ties,” Aboulafia said.

“Japan has made a significant invest-ment in F-35, as they should have. But

they can’t afford to have substantially

more F-35s delivered any sooner … and… the F-2s are important only in keep-

ing the Japanese defense industrial

base relatively proficient in basic de-sign and manufacturing,” said StevenGanyard, president, Avascent Interna-

tional. Ganyard also suggested an F-15 up-

grade strategy was the most logical sce-

nario, since the ASDF’s F-15s have

TOKYO — Critics have raised con-cerns that Japan’s Air Self-DefenseForce (ASDF) could find itself with

only a modest number of fifth-genera-tion aircraft backed by obsolescingfourth-generation planes, based around

the F-2 and F-15s, that lack interopera-bility.

For example, at present funding lev-

els, the ASDF can only procure 42 F-35sat a rate of a handful a year, meanwhile

diverting scarce resources to update its

legacy fleet. This year, the ASDF canonly afford to buy six F-35s while up-

grading 11 F-2s with modern digital

communications systems. The recent ballyhooed unveiling of

the putative fifth-generation X-2 Shin-

shin stealth fighter demonstrator andthe future availability of the short take-off/vertical landing F-35B on Japan’s

carrier-convertible DDH Izumo-classhelicopter carrier seem to offer theASDF some pathways to building a

more effective force. But do they?Richard Aboulafia, vice president,

analysis, at the Teal Group suggested

that given budget constraints, costs and

substantial life left but desperatelyneed to be upgraded.

“The threat to Japan is not Chinesefighters. It’s thousands of cruise andballistic missiles that could easily cut

off all Japan south of Kyushu. This mostimportant reason to have both F-35sand upgraded F-15s with AESA radars is

the cruise missile threat of low flying,low [radar cross section] missile salvosthat could quickly become overwhelm-

ing,” Ganyard said.In this light, a joint Japan-US upgrade

program would share development

costs, reduce risk and increase interop-erability. The result would be the kind

of air force that the US, Israel, Australia

and Singapore will have – a mix of air-craft and integrated operations withboth fifth-generation and 4+ generation

fighters, Ganyard said. The deeper problem, analysts agree,

is that Japan needs to pull back from

funding aircraft that are not interna-tionally competitive, such as the F-2,the C-2 and the P-1, and refocus its strat-

egy and R&D resources on a few worldclass products and buy what it isn’t ableto build.

This makes the Shinshin look increas-

ingly like a redundant bauble, analystssaid.

“Could Shinshin be developed as a

poor man’s stealth fighter that, say,Europe and/or the US might be interest-ed in co-developing and India, Aus-

tralia, et al might be interested inbuying? That would certainly cut unitcosts. I have no idea what the upside for

Shinshin is, though,” said Jun Okumura,visiting scholar at the Meiji Institute forGlobal Affairs, and a former official of

the Ministry of Economy, Trade and In-dustry, which supports domestic weap-ons platform development.

Spending on Shinshin would take bil-lions of dollars away from force en-hancement and replacement and put it

toward development of an unknownairframe, said Aboulafia.

“It would represent the triumph of na-

tional technology development andprestige over actual military needs,” hesaid.

“Japan should not develop a poorman’s anything. It wastes money andonly makes the country more vulnera-

ble,” Ganyard said. Speculation bubbled up a few years

back that Japan might consider acquir-

ing the F-35B when it was revealed, forexample, that the DDH Izumo-class he-licopter destroyers come equipped

with F-35B compatible elevators. “The F35B is a luxury item that I can’t

see the ASDF going for. ... So, unless

you really want to project your navalpower to the South China Sea and be-yond, or the Japan-US alliance breaks

down, I would forget about it,” Okum-ura said.

Aboulafia agreed, saying that fixed-

wing carrier aviation sounds appealing

from a force projection and regionalpresence standpoint, but that it was ba-

sically unaffordable for Japan. But Ganyard said the opportunity pre-

sented by the US Navy’s Ford-class car-

rier with its electro-magnetic aircraftlaunch systems (EMALS) has shifted

thinking away from the F-35B.

“Without much challenge Japan’s cur-rent DDH could be fitted with EMALS

and its associated arresting gear. Add

an angled deck, a bit more length and

displacement, and the JMSDF is back inthe fixed-wing aviation business,” Ga-

nyard said. DN

Japan Air Self-Defense Force

Upgrades to F-15s will play oneimportant part in Japan's efforts to boostits air power as it faces touch decisionson how to distribute limited resources.

BUDGET DILEMMA

Japan Faces Challenging ChoicesFor Cash-Strapped Air ForceBY PAUL KALLENDER-UMEZUpkallender@defensenews.com

Defense News is reporting live from the 2016 Singapore Airshow.

Follow along for breaking developments directly from the event.

COMPLETE

COVERAGEDefenseNews.com/singapore-air-show

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18 | defensenews.com R1 February 15, 2016Celebrating 30 Years of Excellence

cases,” he added.Israel is the largest recipient of US se-

curity assistance, taking in about 55 per-cent of the State Department’s ForeignMilitary Financing (FMF) budget

worldwide. US aid accounts for about25 percent of Israel’s overall defensebudget.

In recent years, congressional plus-ups for Israeli aid have exceeded thepresident’s budget request by much

more than 100 percent. US sources cal-culated that since the start of the cur-rent 10-year agreement in fiscal year

2009, congressional plus-ups to Israelexceeded Pentagon budget requests bysome $1.9 billion.

Last December, for example, Con-gress passed an omnibus spending billthat appropriated $487 million for US-

Israel missile defense programs —more than three times the amount con-tained in the Pentagon’s budget request.

It also appropriated $40 million infunding for a new US-Israel tunnel de-tection program that had not been in-

cluded in the Pentagon budget.The American Israel Public Affairs

Committee (AIPAC), in a published

statement on the omnibus appropria-tions bill for the 2016 fiscal year, com-mended Congress “for key provisions

to help Israel address critical securitychallenges.”

The premier pro-Israel US lobbying

group noted that the bill provided $3.1

billion in FMF as stipulated under thecurrent MoU; added an additional $400million over two years to the more than

$1 billion in US materiel prepositionedin Israel; and extended Israel’s ability touse existing US loan guarantees for an

additional four years. The bill also “ex-pressed support for negotiating a newUS-Israel memorandum of understand-

ing,” according to the AIPAC statement.Under the consolidated, two-track

package proposal, Israel would con-

tinue to receive an as-yet-undeterminedannual amount of FMF grant aid, whichis funded through the State Depart-

ment’s Foreign Ops account.Israel’s annual FMF under the current

MoU is $3.1billion, which is dispersed in

one lump sum at the beginning of eachfiscal year. Israel is required to spend allbut 26.3 percent of that amount in the

US, a caveat that will not change in thefollow-on MoU, sources here said.

In parallel, it would receive another

as-yet-undetermined top-line amountfor R&D and procurement programstraditionally earmarked as distinct line

items within the Pentagon’s budget.An Israeli cabinet minister said that

the Obama administration’s proposed

package would start at $3.8 billion forthe first two or three years and grow in-crementally until it reached a combined

10-year total of “more than $40 billion.”His numbers could not be confirmed

by other Israeli or US officials, who de-

clined to discuss details other than toacknowledge that the sides have not yetreached agreement on ultimate funding

levels.

“We’re committed to concluding a

package that meets Israel’s very real se-curity requirements and addresses ourvery real budgetary constraints,” a US

official in Israel said. “Without getting into numbers, I can

assure you it will be the largest single

pledge of military assistance to any

country in US history. The president has

pledged to support Israel’s securityneeds and it’s in our interest that we doso,” he added.

Early last week, Israel’s Ha’aretznewspaper reported that Netanyahutold his security cabinet that wide gaps

remained between the American offer

AID TO ISRAELAID FROM PAGE 1

billion lower than the Pentagon’s FY17

projection in last year’s budget.To make up the difference, Pentagon

budgeters moved $5 billion of base bud-

get activities into OCO, and markeddown another $5.6 billion in fuel and in-

flation savings plus new efficiencies.

The remaining $11.2 billion in cuts camefrom reduced buys of platforms, includ-

ing Apache and Black Hawk helicop-

ters for the Army, F-35As and C-130Jsfor the Air Force, V-22 Ospreys for theNavy and Joint Light Tactical Vehicles

for the Marine Corps.Acquisition accounts are more adjust-

able in a short-term, one- or two-year

change in available funds, said Penta-gon Comptroller Mike McCord.

“It’s not unusual, if you look at history,

to say that procurement is my short-term shock absorber,” he said.

Byron Callan, an analyst with Capital

Alpha Partners, noted the Defense De-

partment’s willingness to cut buys ofmature platforms enabled it to increase

research and development funding,which increased 4 percent from $69 bil-lion to $71.8 billion.

“The rhetoric about lagging US de-fense technology and that ‘Other peo-ple are catching up to us, we really are

going to focus on some of these high-end threats,’ I think that got reflected inthe research and development plan,” he

said.

In Paris, the French procurementchief noted the uptick in American

R&D spending.

“What I see is they continue to main-tain research and development at the

same order of magnitude, a colossalamount compared to the levels we seein Europe and France,” said Laurent

Collet-Billon, head of the Direction Gé-nérale de l’Armement procurement of-fice.

“The US approach is ‘We can cut pro-duction, slow down a little, but we nev-er cut technological innovation,’” he

said during a Feb. 10 news conference

on military procurement. “That is mymodel — never cut innovation. It is a

question of superiority for them, for usit is a question of survival.”

Jon Louth, senior research fellow and

director of the Royal United ServicesInstitute, said the budget submissioncontained an implicit warning of trou-

ble ahead for European governmentsand industry if they fail to raise their

game to match the US’ renewed R&D

ambitions.“If the US is going to significantly out-

spend its European allies on research

to a degree markedly different to that ofthe past, what does that mean forEurope’s ability to maintain high-level

competence and capabilities among in-digenous industries?” Louth said. “Ifthe technologies become so exquisite

that the Europeans, for various rea-sons, haven’t been able to develop theirown capabilities, they risk becoming

the natural clients of US exporters to agreater extent than they are today.”

The request also quadrupled the

amount for the European Reassurance

SPENDING PLANBUDGET FROM PAGE 1“What I see is they

[US] continue tomaintain research

and development atthe same order of

magnitude, a colossalamount compared to

the levels we see inEurope and France.”

Laurent Collet-BillonHead of DGA procurement office

From Page One

and the amount needed to meet Israel’s

expanded security requirements. If ne-gotiators could not reach a top-linefunding level satisfactory to Israel, Net-

anyahu reportedly said he would wait toconclude a deal with the president whosucceeds Obama.

Israeli reports in recent months have

cited $5 billion per year as the amountneeded to preserve Israel’s congres-sionally mandated qualitative military

edge (QME) over regional adversaries,especially Iran.

Israeli officials have publicly and re-

peatedly cited the lifting of sanctions as-sociated with the so-called P5+1nucleardeal with Iran, which will enable Tehran

to reinvest in arming its own militaryand that of its regional terrorist proxies.Moreover, concern over a resurgent

Iran is driving accelerated military mod-ernization in Saudi Arabia and otherSunni Gulf states, something officials

here say Israel must take into accountregardless of the unofficial thaw overthe common Iranian threat.

“Yes, there’s a convergence of intereston some key issues between us andmany of the Gulf states. But that doesn’t

mean we can ignore the tremendousamount of sophisticated military hard-ware that is flowing into a region where

instability is rife and regimes canchange,” said an Israeli Foreign Minis-try official.

At the World Economic Forum in Da-vos, Switzerland, last month, Netanya-hu said whatever aid levels Israel

manages to negotiate with Washingtonwould pale in comparison to the fundsavailable to Iran as a result of the nucle-

ar deal.

“Iran’s going to get about $100 billionnow,” Netanyahu told CNN’s Fareed Za-karia. “The American assistance to Isra-

el is about $3.1 billion and we’re talkingabout a bigger package. But rememberthat even over a 10-year period, it pales

in comparison to the enormous fundsIran gets.”

Netanyahu did not mention, nor did

Zakaria clarify, that funds to becomeavailable to Iran as a result of the nucle-ar deal were Iranian funds frozen due to

sanctions.“This is a real discussion that’s taking

place as we speak about a follow-on aid

package for Israel … We’re talkingabout military support, not the econom-ic support; I’ve ruled that out. In fact, in

my first term as prime minister, I ruledout economic aid and said we’ll be ableto carry our own weight. We don’t need

economic welfare. We know how tobuild our own economy. But in terms ofprotecting Israel … I think we’ll proba-

bly reach a successful agreement, Ihope in the coming months,” Netanyahusaid.

In a Feb. 8 interview on Israel ArmyRadio, Zeev Elkin, a cabinet ministerfrom Netanyahu’s Likud party, said Isra-

el still awaits a “realistic” offer from theUS.

“When the accord with Iran passed,

the US president pledged that he woulddo everything to provide a proper re-sponse for Israeli security,” Elkin said.

When pressed, Elkin acknowledged the“possibility” that Netanyahu would waitfor the next president to conclude the

follow-on deal.

“Without the right number, we won’tsign,” a former Cabinet member said.“But if the number is good enough, we

should conclude the agreement withthis administration. We started withthem and we should try to finish it with

them.”In response to the Ha’aretz report, for-

mer two-term US ambassador Martin

Indyk tweeted, “Always dangerous tothink next president will give you a bet-ter deal. That was one of [Yasser] Ara-

fat’s mistakes!” DN

Saul Loeb/AFP/Getty

Israeli Prime Minister BenjaminNetanyahu and US President BarackObama shake hands during a 2013meeting in the Oval Office.

February 15, 2016 R1 defensenews.com | 19Celebrating 30 Years of Excellence

Initiative, from $800 million in 2016 to$3.4 billion in FY17.

Giri Rajendran, research associatefor defense and economics at the Inter-national Institute for Strategic Studies,

said the ERI increase signals a shiftaway from the 25-year, post-Cold Wartrend of a declining American military

footprint on the continent. Over thatperiod, the number of active combatbattalions under US European Com-

mand (EUCOM) fell from 99 in 1990 tojust 14 in 2015, he said.

“With the ERI funding increase, the

US would be the 15th largest defensespending power in Europe in 2016,” hesaid. “Additionally, the fact that part of

the allocation will go toward funding

more extensive training and exercises— in many cases undertaken in con-

junction with European allies — is par-

ticularly important for Europeanmilitaries.”

Since 2008’s financial crash, manyEuropean armed forces have cut train-ing and readiness levels as short-term

cost saving measures, he said.

“To the extent that the ERI promotesgreater readiness and interoperability,

it is likely to have a multiplier effect onthe region’s armed forces level of pre-paredness and their ability to counter a

revanchist Russia,” he said.While noting that the budget con-

forms to the funding levels set by Con-

gress, industry groups maintained that

the budget was still too small to meetall the demands faced by the military,

especially long-term modernization re-quirements.

Craig McKinley, president and CEO

of the National Defense Industrial As-sociation, said the DoD needs more

money for modernization and innova-

tion.“The budget submission reflects esti-

mates on strategic threats, but there is

still considerable risk, and a troublingtrend: the year-over-year gaps in mod-ernization spending.” McKinley said in

a prepared statement. “We urge Con-gress to continue its bipartisan workand provide the department with the

stability it needs to function long-term

in force structure, readiness and specif-ically in modernization, where funding

has taken the biggest hit.”The Aerospace Industries Associa-

tion said the budget does not meet the

requirement of providing adequate re-sources for the nation’s pressing priori-ties.

“The Department of Defense fundingrequest aims to preserve the readinessand size of our forces, but substantially

cuts aircraft, ship and ground combatsystems, threatening our ability toquickly and decisively respond to the

growing number and variety of securitythreats around the world,” AIA said in aprepared statement. “Such cuts will in-

crease risk to our troops, make future

military operations more costly, andmake future modernization efforts

more expensive.”

However, the likelihood of Congressplussing up the defense budget — per-

haps by increasing OCO funding — ap-pears remote, said Callan.

“You might be able to put more mon-

ey in defense, but the Democrats aren’t

going to let that go through without get-ting an equal pound of flesh on non-de-

fense discretionary,” he said. “And youstill have this wing of the GOP that’s go-ing to look at increased budget deficits

as poison.”Instead, a shortfall of funds might

serve as a driver for the Pentagon’s so-

called third offset strategy, its hopes to

leverage technological advances intoforce-reducing battlefield advantages.

Both of the prior offset strategies wereguided by the need to curtail defensespending.

“In the 1950s and 1970s, in both in-stances, the United States could have

made the decision to absolutely in-

crease defense dramatically and matchthe Soviets with more armor, more

ground forces, better airpower,” Callan

said. “Instead, this fiscal disciplinepushed the defense department to seekthese technology offsets. You’re seeing

the exact same thing play out here.” DN

Andrew Chuter in London and Pierre Tranin Paris contributed to this report.

“Iran’s going to get

about $100 billion

now. The American

assistance to Israel is

about $3.1 billion ...

But remember that

even over a 10-year

period, it pales in

comparison to the

enormous funds Iran

gets.”

Benjamin Netanyahu

Israeli prime minister

20 | defensenews.com February 15, 2016Celebrating 30 Years of Excellence

Policy

shortcomings. “We have tried to work with [the Of-

fice of Management and Budget] to put

some more predictability into OCO toget all the resources we could back intothe base budget, [which] hasn’t really

made a lot of progress,” McCord said.

“And I think the battlefield’s fairly con-fused right now ... in terms of, ‘What’s

the future? Is there going to be an OCObudget in the future that looks like itdoes now?’ ”

This year the 2015 Bipartisan BudgetAct (BBA) used OCO funds to provide

$5 billion of base budget relief, an ar-

rangement McCord called “unprece-dented.” Though critics said base

budget requirements have in the past

been inserted into OCO with a wink anda nod, last year it was used explicitly asthe overflow receptacle for billions of

dollars in base budget requirements.“It’s obvious that now the definition

of OCO, that it was restricted to war-

time operations, has been blown sky-

high,” said Gordon Adams, who ran na-tional defense budgeting for the Clintonadministration. “Everybody acknowl-

edges that this is extra money outsidethe caps. There’s not even a fig leaf ofwar justification for OCO anymore.”

Congress’ only demonstrated form ofdiscipline of late, Adams said, is Demo-cratic demands for parity on the non-

defense side of the federal budget. “It’s a nutty form of discipline that if

you want more for defense, you have to

give more for all those domestic pro-grams you hate,” he said. “The ceiling isthe reluctance of the Republican Party

to go high on domestic.”

House Armed Services ChairmanRep. Mac Thornberry, R-Texas, and oth-

er Republicans are focusing on increas-

ing defense funding through OCO,rather than raising the caps. They argue

the deal set the 2017 OCO budget as aminimum which should be raised asmuch as $23 billion based on threats

and other developments. DN

use has broadened and endured evenafter large-scale deployments to Iraq

and Afghanistan concluded — fuelingcriticism of OCO as a gimmick and aslush fund.

Since the Budget Control Act becameenforced in 2013, more and more readi-ness funding has migrated from the

base budget into OCO. New operations,too, are being funded in OCO, accord-ing to Harrison, who said, “it used to be

those things would have been paid forin the base budget or a one-year supple-mental at first.”

Within the 2017 OCO account, whichticked up $200 million over 2016, fund-ing for operations in Afghanistan is

down $1.2 billion, from $42.9 billion to$41.7 billion. Anti-Islamic State groupefforts received a 50 percent bump,

from $5 billion to $7.5 billion. The Euro-pean Reassurance Initiative (ERI),which covers military support for

Europe following Russia’s invasion ofUkraine, rose from $800 million to $3.4billion, while the Counterterrorism

Partnerships Fund dropped from $1.1billion to $1 billion.

One of the main criticisms of OCO’s

use for base budget requirements is thatOCO is a one-off – by definition unsta-ble –and anything in it can disappear

the following year. “It doesn’t send a great message to

our partners to have this in the OCO ac-

count as opposed to the base budget,”

said Michelle Shevin-Coetzee, a budgetresearcher with the Center for a New

American Security. “A difficulty is that

Russia is listed as a strategic challenge,and ERI is about reassuring allies and

deterring destabilizing actors, sothere’s a conflict there too.”

At the budget roll-out, Pentagon

Comptroller Mike McCord defendedthe administration for early on endingthe Bush-administration practice of

submitting multiple supplemental bud-gets and eventually creating an annualOCO budget with more predictability

and transparency. Yet he acknowledged

WASHINGTON — In 2010, President

Obama requested a $106 billion war-time budget that his spokesman calledthe “last supplemental budget for Iraq

and Afghanistan.” But years after cam-paigning on a promise to end Bush-eraabuses of the emergency fund, Obama

finds himself bequeathing the problemto the next president.

The Pentagon unveiled its fiscal 2017

budget request Feb. 9, asking Congressfor $582.7 billion in military funding,$58.8 billion of it in overseas contingen-

cy operations (OCO) funding.Budgeteers find OCO irresistible,

analysts said, because it is exempt from

the multiyear planning required by thebase budget, and because its exceptionfrom budget caps last year proved a

useful part of the formula for cutting ahard-fought budget deal.

“We’re absolutely hooked on OCO,”

said Todd Harrison, a senior fellow atthe Center for Strategic and Interna-tional Studies. “It’s not just DoD, it’s

Congress as well. It’s a convenient wayto get around budget caps and forge abudget deal that adds money for de-

fense and non-defense. For that reason,as long as we have the budget caps,we’ll have OCO.”

Supplementals date back to WorldWar II, and every year since the US

launched military operations in Afghan-

istan in response to the Sept. 11 attacks,Congress has appropriated separate

war funds. Though initially intended for

unanticipated emergency costs, their

Mike Morones/staff

President Obama's FY2017 budget is delivered to the Senate Budget Committee Feb. 9in Washington.

‘We’re Absolutely Hooked on OCO’Wartime Spending AccountAppears Here To StayBY JOE GOULDjgould@defensenews.com

WARTIME FUNDING

Overseas contingency operationsfunding in the 2017 account in-cludes $41.7 billion for operationsin Afghanistan, $7.5 billion foranti-Islamic State group efforts,$3.4 billion for the European Reas-surance Initiative and $1 billion forthe Counterterrorism PartnershipsFund

BACKGROUND

February 15, 2016 defensenews.com | 21Celebrating 30 Years of Excellence

countries — Poland, Romania and Den-mark — have stepped up their commit-ments this week, either for kinetic

strikes or training missions, a senior de-fense official said.

On Feb. 12, the United Arab Emirates

also pledged to restart participation inthe air campaign against ISIL, Cartersaid. On the same day, diplomats in Ger-

many — including top American andRussian officials — announced thegroundwork for a potential ceasefire in

Syria’s five-year civil war.Carter also highlighted a “significant

development” — that NATO Secretary

General Jens Stoltenberg and he are ex-ploring the possibility that NATO couldjoin the anti-ISIS coalition as an active

participant.

“NATO as a new member would bringunique capabilities that could be

brought to bear against ISIL, including

experience in building partner capacity,training ground forces and providing

stabilization support.”Leading up to the meeting, Pentagon

officials, including Carter, emphasized

that US is looking for countries to con-

BRUSSELS — US Secretary of De-

fense Ash Carter left a three-day trip toNATO with new commitments to helpin the fight against the Islamic State

group, but questions remains abouthow successful the campaign can be ifRussia remains active in Syria.

Carter traveled to Brussels for a two-

part business trip. First, he took part inthe NATO ministerial, with a major fo-

cus on fiscal reassurance for Europeanpartners from the Pentagon’s budget re-quest. But the centerpiece of the event

was day two, when Carter hosted ameeting of 27 other defense ministers

whose nations participate in the coali-

tion against the terrorist group, com-monly known as ISIS or ISIL.

The big fish for Carter: a commitment

from Saudi Arabia to increase its kinet-ic airstrikes inside Syria, as well as con-sideration of Saudi troops on the

ground, potentially giving the Sunniground force publicly called for byPresident Barack Obama.

In addition to Saudi Arabia, three

tribute in ways beyond military assis-tance, such as training police orproviding funding for the Iraqi govern-

ment. The latter is increasingly impor-tant, with the US State Departmentestimating Iraq faces a monthly financ-

ing gap of $5.3 billion.Emma Ashford, an analyst with the

Washington-based CATO Institute, says

emphasizing non-military contribu-tions is an easy way to increase partici-

pation from partner nations.

“It’s easier for most states to committo this kind of help, which doesn’t re-

quire parliamentary approval or even

much popular support,” she said. “Andsome aspects of the non-military cam-paign, like humanitarian aid and help

with counterterrorist financing, arereally important aspects of the overallstrategy.”

But Ashford also raises concerns thatcountries may now have less incentiveto contribute militarily.

“Carter may say he wants to ‘acceler-ate’ the campaign against ISIS, but it’snot clear how to do that without more

actual military contributions on the

ground from regional governments,”

she said.

The Russian ChallengeAccording to the senior defense offi-

cial, the partners in Brussels were all onboard with the strategic plan outlined

by the US, with one caveat – concernsover Russia’s continued presence inSyria.

“One thing that was striking was criti-cism of Russia. Several ministers saidthe coalition need to be more vocal in

its criticism of Russia,” the official said.“They all acknowledged it’s a very com-plicated situation in Syria, that arguably

there has been more progress in Iraq,and Syria will remain arguably the more

challenge of the two. But the criticismof Russia was widespread and that wasa consistent theme.”

Evelyn Farkus, who served as deputyassistant secretary of defense for Rus-sia, Ukraine and Eurasia from 2012 until

November, agrees Russia remains ahuge challenge to solving the Syrian sit-uation.

Ahead of Carter’s trip, Farkus advo-cated leveraging a “whole of govern-ment approach” toward the Kremlin,

including increasing already-imposedsanctions on the government of Rus-sian President Vladimir Putin.

“In context of the Syria problem, wecould actually think about applyingsanctions to Russia that we would coor-

dinate with our Middle Eastern alliesand Europe,” she said. “It’s somethingthat should be seriously considered.”

“We’re not going to convince Russia ifthey’re winning on the battlefield,” sheadded. “So what can we do to change

the dynamic? Maybe we can changewhat’s happening on the battlefield, butin addition we should be considering

other things we can do to increase our

leverage vis-a-vis Russia.Carter, for his part, said Russia is con-

tributing to a “very cruel movement of a

large number of people in Syria.”During the NATO ministerial, Stolten-

berg pledged Standing Maritime Group2 to the Aegean Sea, primarily to con-duct surveillance of refugees and alert

local authorities, although Supreme Al-lied Commander Europe Gen. PhilipBreedlove indicated the mission pa-

rameters could change. Breedlove alsoconfirmed that "several" nations haveagreed to add ships, but would not iden-

tify which ones. DN

Master Sgt. Adrian Cadiz

Secretary of Defense Ash Carter speaksFeb. 11 during a counter-ISIL meeting atNATO headquarters in Brussels,Belgium.

NATO SUMMIT

Brussels Trip Lands Anti-ISIS Help,But Russia Remains a ChallengeBY AARON MEHTAamehta@defensenews.com

THE LATEST ON US DEFENSEFollow Staff Reporter

Aaron Mehta @AaronMehta

22 | defensenews.com February 15, 2016Celebrating 30 Years of Excellence

Some critics on Capitol Hill andelsewhere view this as an irrele-vant budget: It just comes in onthe costs, DoD won’t get every-thing it wants, and the next rele-vant budget will be in May 2017,after a new administration sub-mits its budget. How would youmake the case that this is rele-vant? Does it contain, in yourview, major muscle movements orinitiatives that you think willoutlast this administration?

I think it does. If I would list themajor move, I think it’s with respect to

Russia, and that’s within the secre-tary’s framework of trying to reallyhave us reorient a little bit so that

we’re thinking across the spectrumfrom now to 20 years from now. Hereand now is the fight against ISIL, of

course, and the Taliban in Afghanistan.But he’s really trying to focus us aswell on the higher-end, peer and near-

peer competitors, that’s Russia andChina, as well as Iran and North Ko-rea. I think that what we’re doing in

Europe, in particular, on this so-calledEuropean Reassurance Initiative, isprobably the biggest muscle move in

my mind in this budget. But it’s alsothe mental framing to think about thehigh-end competitors as well as the

here and now. But to think ahead isreally where I think Secretary Carter istrying to push us, and to think across

the spectrum of time, geography andall the domains now: air, sea, land, tothink about space as a contested envi-

ronment, to think about cyberspace asa contested environment.

For many observers, the biggestloser was acquisition programs,with a 7 percent decrease be-tween ’16 and ’17. There is a con-cern that by continually cuttingand deferring programs, the ad-ministration is causing a bowwave that will come due around2020, 2025, when the nation maynot have the money because ofdebt reduction and demographictrends. Are you potentially dan-gerously delaying modernization,but also creating a bow wave thatmay simply be too big to addressin the future?

There was a pre-existing nuclearmodernization bow wave that is com-

ing throughout the decade of the ‘20s

and the first half of the ‘30s as we buythe replacement for the Trident sub-marine, one at a time over a period of

a dozen years or so, as well as theother two legs [of the nuclear triad].

That challenge is before us, it’s some-

thing that we’ve been working hard,the deputy secretary in particular has

been working very hard trying to make

sure people understand it and startexploring different ways that we cansolve it. More resources, of course,

would be our top solution to solve it,because we look back at what wasdone historically in what he calls the

first and second waves, of the early1960s and mid-‘80s when the triad wasrecapitalized to some extent, it didn’t

come at the expense of the conven-tional force. That’s what our ideal is,but the fiscal situation in the ‘20s and

‘30s with the baby boomers in full

retirement mode is going to be a chal-lenge for sure.

In the near term, though, balance is

something that’s almost inherent inbudgeting. On the Air Force side, werebalance slightly toward the capacity

side, on the Navy side, slightly toward

the capability side. Historically whenthere are budget gyrations up or down,

acquisition accounts, procurement in

particular, are the most volatile. Thebudget deal that we got was a deal for

fiscal ‘16 and fiscal ‘17. That deal gaveus zero guidance about what’s going tohappen after this, in ‘18, ‘19, ‘20, ‘21 and

then on into the future. We know thatthe Budget Control Act caps are stillthe law in ‘18, ‘19, ‘20, ‘21. This depart-

ment has been very consistent that wecan’t live with those caps, we don’tsupport living with those caps.

Then you get a short-term signal in

the budget deal that you’re going to getless money, you’re going to get much

of what you want but not all. How doyou react to that? Compensation isreally not a good short-term lever. You

certainly wouldn’t give people a paycut.

In fact, you have a pay increasein the budget.

Yes, we have a pay raise. So that

lever is really not available to us toreduce compensation unless we weregoing to reduce the size of the force.

Size of the force is really the biggestlever that there is. If you have a small-er force, then you need less facilities,

you have less people to pay, you needless health care, you need less riflesand ammunition and aircraft. But

when you have a short-term signal thatyour budget is going to be adjusted 3percent down, as it was in this deal in

‘17, with no information about wherethe future is going, that’s not a propi-tious time to make the force smaller

permanently. Making the force smalleris a big muscle move, it’s a hard mus-cle move, it’s a slow one. I wouldn’t

say it’s a step of last resort, but it’s avery difficult step to do. So where thattends to leave you is you go to the

acquisition accounts. They are more

adjustable in a short-term, one- ortwo-year change in supply of money.

It’s not unusual if you look at history

to say that procurement is my short-term shock absorber.

How did you decide how muchto take from each of the servicesto make up for an almost $22billion shortfall?

The primary way we look at our

program and how to adjust it is whatwe call portfolios, so things like space,ISR, ground forces, tactical air forces,

not so much that each service is going

Mike Morones/Staff

Mike McCordLast week, the Pentagon unveiled its $582.7 billion budget request for fiscal

2017. This marked the second time Mike McCord has overseen the prep-

aration of the DoD’s budget since he became comptroller in June 2014. He

previously served five years as the comptroller’s principal deputy and more

than two decades with the Senate Armed Services Committee as a staffer

for former Sens. Sam Nunn and Carl Levin. While the 2015 Bipartisan Bud-

get Act provided an assured top line figure, McCord and his staff still found

themselves scrambling to cut more than $20 billion from the budget in just

six weeks. Here, he explains how the DoD’s “portfolios” are adjusted.

Pentagon Comptroller

n Pentagon’s 2017 basebudget request: $523.9billionn Overseas contingency

operations budget request:$58.8 billionn Total active duty end

strength for FY 2017:1,281,900

to get a bill, although that is one of thetools that we use. But it’s primarily,where do we think that we have too

much risk or that we have an invest-ment in what sort of fields of endeavorcould an investment really make a

difference.

Some in the department havereferred to the F-35 as the “piggybank,” with reductions to annualbuys freeing funds for other uses.But volume is vital to the pro-gram. Is there a danger that thedepartment is destabilizing itslargest program by keepingplanes around like the A-10, con-tinuing to buy F-18s instead ofmoving to this new-generationairplane?

I wouldn’t say there’s no risk. I don’t

personally worry that this is going toend up like the B-2 did where thequantity drops to such a small number

that the unit price spikes up and peo-ple aren’t willing to buy it anymore. Ido think there’s some risk of that, and

obviously in this program what we dois a key driver. What our partners do isalso relevant. The analysis that our

acquisitions folks did was that thequantity changes in this budget werenot going to materially affect the unit

cost. So we didn’t see ourselves askicking off a bad spiral in terms of unitprice, but it’s not where we wanted it

to be.

Can you give us a rough sense ofhow much of the department’stotal resources are going tothings that could be character-ized as either major innovationinitiatives or third offset initia-tives?

The amount of resources that we’retalking about in the FY17 budget is onthe order of $3.5 billion, so kind of in

the 1 percent of our budget range. It’snot enormous in terms of funding. Oneof the points that the secretary has

tried to make to us is innovation, in hismind, is not just about money. It’s alsoabout the way you think. What he likes

about the Strategic Capabilities Officeis they imagine ways to take a weaponyou already have and use it differently.

It doesn’t necessarily take a lot of

money to do that if you have someclever adaptations of things you al-

ready have. So third offset, and in-

novation writ large, the primary yard-stick is not necessarily money. The

import is a combination of the moneybut also the mindset.

By Vago Muradian in Washington

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After years of pushing around itsneighbors and even bullying its

trade partners, the comingmonths already appear to hold a seriesof major setbacks for China that could

prove regionally destabilizing. In late May, the Permanent Court of

Arbitration in The Hague will rule on a

suit by the Philippines that contestsChina’s sweeping claims to the SouthChina Sea. Manila filed suit after China

seized Scarborough Shoal, some 100miles from the Philippine coast.

The court has already rejected Bei-

jing’s stance that the issue is an in-ternal Chinese matter. Experts expectthe court will invalidate China’s so-

called “nine-dash-line” that is basis forthe country’s territorial claims and rulethat Beijing’s man-made islands are

illegal.While such a ruling will be well-

received by all the nations on the

receiving end of China’s bullying, it isunlikely Beijing will accept the deci-sion.

Making matters worse for China,Taiwan’s new pro-independence leaderis making it clear that unlike her pred-

ecessor, she’s not going to keep cozy-ing up to Beijing.

Hong Kong is again in an uproar

over Beijing’s anti-democracy moveslike the kidnapping of local booksell-

ers. Then there are the (tough) newly

proposed US sanctions on Chinese

companies that have been helpingadvance North Korea’s nuclear andmissile programs, as well as a new

trade bill that would make it easier forWashington to punish China for itseconomic transgressions.

Plus, US officials have made it clearthat freedom of navigation operationsthat challenge China’s claims to the

region will increase. Beijing must notbe allowed to unilaterally changeinternational norms.

Meanwhile, China’s actions haveprompted the Philippines to welcomeAmerican forces back to the country

and increase capabilities. South Koreawants advanced US missile defenses todefend against the weapons Pyong-

yang has developed with Chinese help.Against this backdrop, it’s vital Wash-

ington do all it can to back its allies —

without encouraging reckless action.That’s why statements from top US

officials like Deputy National Security

Adviser Ben Rhodes are so unhelpful.On the eve of the latest ASEAN meet-ing, Rhodes placed cooperation with

China ahead of holding Beijing ac-countable for bellicose behavior that

has brought the region togetheragainst Chinese bullying.

Statements like that worry US allies

who wonder whether Washingtonplaces cooperation and climate talkswith Beijing ahead of supporting allies

and friends in Asia who are on thereceiving end of incessant Chineseintimidation.

That bullying is going to get worse asChina increasingly uses irregularmeans to press forward its claims and

confound its adversaries.Beijing has invested heavily in ex-

panding its Coast Guard that now

includes ships — including five 12,500-ton cutters — designed to sink enemyships by ramming. It also has 670,000

fishing vessels that will swarm poten-tial adversaries, creating a problemthat’s not easily solved.

It’s vital that Washington engage withregional leaders to map out strategieshow best to handle a future when

tensions will be escalating. That meansbringing allies together to collectivelyimprove capabilities, particularly in

maritime domain awareness, sea andair power, but also economic and legaltools to deter China.

Prepare for a Busy Year in Asia

Even before the Obama admini-stration submitted its defense

budget request to Congress,Republican members claimed creditfor increasing defense spending while

simultaneously blasting the requestfor not being robust enough.

Both are disingenuous statements.

First, the amount the administrationcan spend is dictated by the two-yeardeal inked in December that averted

another fiscal battle. The Republicans

were party to that deal.Second, the administration has often

asked for more money than allowed

under spending caps, and sometimesmore than GOP lawmakers have ap-

propriated.The administration kept within

budget limits this year by cutting $20

billion from its planned 2017 budget.

But the White House unrealistically isplanning to get $20 billion to $30 bil-

lion more for defense in coming years.

The administration argues that givenfunding uncertainty each year, it's

being prudent in budgeting for what itneeds.

Perhaps, but the reality is, the Penta-

gon is forced to make last-minute cutseach year to bring overly rosy plans

within budgetary reality. Such games-

manship may be understandable, butalso makes fiscal problems worse as

plans are continually changed while

the budget is in execution.Every budget is about trade-offs.

This one rightly sought to balance

modernization, improve readiness andkeep from further shrinking the force,while also investing in nuclear mod-

ernization and future programs.

But it also continues to defer pro-grams into the future, where they arebuilding into a bow wave that might

be so big as to be unaffordable.What’s needed is a dose of honesty.

It’s a dangerous world and vital

chunks of the US military are in direneed of modernization.

You can't have an honest funding

debate, however, when both sides arebeing disingenuous. DoD budgeting ishard enough without having to juggle

multiple sets of books or make quickcuts to make ends meet.

The next administration must bud-

get more realistically across its Future

Years Defense Program (FYDP) andbeyond.

As for Congress, if it isn't going to

give the Pentagon the flexibility toretire aging weapons and close bases

to fund much-needed modernization,readiness and personnel, then it muststrike a deal that gives DoD a base

budget to cover its needs.

Dose of US Budget Honesty Needed

EDITORIALS

February 15, 2016 R1 defensenews.com | 25Celebrating 30 Years of Excellence

COMMENTARY

Any doubts about whose in-terests are served by ISIL inSyria have been eliminated.

Saudi Arabia, Bahrain and the UnitedArab Emirates have all stated theirwillingness to send ground forces to

Syria to fight ISIL as part of a globalcoalition led by the United States.

Syria and Iran have reacted menac-

ingly. So much for the fiction that Iran,its Syrian client, and, for that matter,Russia see ISIL in Syria as an enemy.

For all three it is a gift that keeps ongiving.

For Syrian President Bashar al-

Assad, ISIL is the evil foil making himand his regime look good by compari-son.

For the Syrian regime and the self-proclaimed ISIL “caliph” Abu Bakral-Baghdadi, the relationship is largely

one of live-and-let live. When ISIL seessomething it wants — an airbase filledwith weaponry, a city featuring price-

less antiquities, or an oil field — itsweeps away Assad regime forces.

But the two supposed enemies have

much in common. Each sees value —Assad for a ticket back to polite soci-ety, al-Baghdadi for recruiting world-

wide in Sunni Muslim communities —in the other being one of the two onlypolitical figures left standing in Syria.

ISIL’s value to Assad skyrocketed onSept. 30, when Russia intervenedmilitarily. Moscow proclaimed it was

deploying combat aircraft to Syria tofight ISIL. It then proceeded to doalmost anything but. Aside from an

occasional bombing run for appear-ances sake, or to help out a regimeunit sitting atop something desired by

ISIL, Russia’s bombing campaign isclearly designed to help the Assadregime, and by extension ISIL, elim-

inate Syrian nationalist alternatives.In response, US Secretary of State

John Kerry tried to characterize ISIL

as the common enemy of the civilizedworld, and devised a diplomatic proc-ess he hoped would ultimately side-

line Bashar al-Assad for the sake of aunified Syrian ground force (Army andrebels together) against ISIL.

Kerry’s initiative has fallen on hardtimes. A Geneva peace conferencewas convened and almost instantly

suspended. Russia, notwithstandingits status as “co-convener” of thediplomatic initiative, escalated its

pro-regime air campaign: not againstISIL, but against Syrian rebels holdingparts of Aleppo.

Despite these events, three Gulfstates in succession announced theirreadiness to dispatch ground forces to

eastern Syria to fight ISIL. US DefenseSecretary Ash Carter reacted quickly:“That kind of news is very welcome.”

Indeed it is. What the war against

ISIL in Syria has lacked is a groundcombat component large enough andprofessional enough to close with and

kill ISIL. Is the Gulf offer real? Do the three

states have ground force capabilities

that can contribute to a decisive cam-paign against ISIL in Syria?

What is on the record, however, is

Russian behavior and regime andIranian reactions. According to al-Assad’s foreign minister, any such

anti-ISIL coalition “will be consideredaggression,” and its participants “willreturn home in wooden coffins.”

What we are seeing in Syria is acollaborative military effort embracingRussia, Iran, ISIL and the Assad re-

gime. If they eliminate Syrian national-ist alternatives to al-Assad and ISIL,will Assad and his allies then turn

against the “caliph?” Or will Syria slipinto an uneasy, unstable partition?

The fiction of ISIL as a common

enemy had diplomatic utility for JohnKerry – Russian, Iranian and Assadregime reaction to the Gulf ground

force offer killed it. Facts, now beingcreated by Russia, must govern Syria-and ISIL-related policy. DN

North Korea’s recent nuclear testhas generated much mediaattention and expert com-

mentary. Notwithstanding legitimateconcerns about nuclear weapons inthe hands of a rogue regime, there’s

been a lot of hand-wringing aboutwhat to do.

Many urge negotiations to contain or

even roll back the nuclear program,but DPRK’s leaders have shown nointerest. They say they’re going to

keep their nukes to avoid what hap-pened to Iraq’s Saddam Hussein andLibya’s Moammar Gadhafi.

President Obama has wisely chosennot to provide Kim Jong-Un with anill-deserved negotiating forum and the

associated stature that comes with

major power engagement. So what should we do? Yes, increase

secondary sanctions, freeze overseas

bank accounts and seek further toisolate a regime that has carried out

unspeakable crimes against a largesegment of its population.

Most important, our approach

should also include a concerted mil-

itary-technical effort to deny Kim

Jong-Un and his crowd the perceivedbenefits of owning nukes.

What capabilities, specifically, areneeded?

• Exquisite intelligence to know

when a nuclear ballistic missile launchis being considered or directed, and

ability to prevent or delay a launch

order from reaching missile units.• Military capabilities to destroy

fixed-based and mobile missiles on

the ground, or if any get launched,

advanced missile defenses to shootthem down.

• Cyber capabilities to disrupt war-

head arming and firing systems, orcause flaws to be introduced intowarhead designs, so that any arriving

warheads are duds. Under such conditions, North Ko-

rea’s leaders would no longer “own”

their nuclear weapons — in a sense,we would.

A bit fanciful? Not necessarily. The

technologies, subsystems and capa-bilities exist today to address eachone of these goals notwithstanding the

need for a bit of luck here and there.

Consider the problem of huntingmobile missiles. We didn’t do a very

good job of this during the first Iraq

war in 1991. But the North Koreanproblem is different; systems and

technologies for sensing, on-boardhigh-performance computing, preci-sion strike, and command and control

have greatly advanced in 25 years.North Korea has about the same

land mass as Virginia, about one-

fourth the size of Iraq. From AndrewsAFB in Maryland, F-35 aircraft couldreach any point in Virginia within 10-15

minutes. F-35s based in South Korea

could carry out precision conventionalstrikes within that same time.

In theory, just a few stealthy dronescould cover the entire country 24/7,cueing strike aircraft shortly after a

mobile missile was spotted. Just look-ing at a map, the North Korean roadnetwork is primitive and sparse. If

mobile missiles are not easily off-roadcapable, then an area search problemis reduced to a much more manage-

able linear search. There are reports that North Korea

is developing a submarine-launched

ballistic missile, but given US capa-bilities to track noisy, older generationsubmarines, such as those possessed

by North Korea, this is not likely to be

a prudent investment.A vital challenge will be ensuring

that North Korea’s isolated leaders

receive the message that they can’tcount on their nukes so they better

not risk using them. Creating doubt about whether nucle-

ar weapons are effective as a regime

shield, or as means to coerce others,may lead to more risk-adverse regimebehavior. Kim Jong-Un may be more

likely to ponder a series of events thatend with his being hauled before theInternational Criminal Court to an-

swer for crimes against humanity. DN

Negating North Korea’s NukesJohn R. Harveyserved as principaldeputy assistantsecretary of defensefor nuclear, chemicaland biologicaldefense programsfrom 2009-2013.

ISIL: The Common Enemy FictionAmbassadorFrederic C. Hof isan Atlantic Councilsenior fellow, aVietnam veteran andformer US StateDepartment official.

26 | defensenews.com February 15, 2016Celebrating 30 Years of Excellence

Last WordCOMMENTARY

Twenty-five years ago, late in theafternoon of Feb. 26, 1991, 260American soldiers with 19 tanks

and 26 Bradley fighting vehicles in thetwo lead cavalry troops of an 1,100man armored cavalry battle group

charged out of a sandstorm andcaught the rear guard of Iraq’s Repub-lican Guard Corps in the open desert

along the North-South grid line re-ferred to as “73 Easting.”

Taken by surprise, the numerically

superior, full-strength, 2,500-man Iraqibrigade with T-72 tanks in defensivepositions supported by mines, artillery

and infantry with anti-tank weaponswas swept away in a battle of annihila-tion. Attacking American soldiers lost

one dead, six wounded and one de-stroyed Bradley.

Americans in Washington were

surprised. A chorus of television pun-dits, academics and retired Armygenerals had warned that American

soldiers would suffer heavy casualties.Retired Army Chief of Staff Gen. Ed-ward Meyer actually declared that war

with Iraq would produce 10,000 to30,000 US casualties.

The generals commanding Army

forces in the Middle East worried thatMeyer was right. They had not seenaction since Vietnam and they irratio-

nally inflated the Iraqi Army’s fightingpower. They should have known bet-

ter.

Rebuilding the ArmyThe courageous and intelligent

performance of American soldiers inbattle of 73 Easting was testimony tothe superior combination of training,

technology and human capital that theUS Army’s post-Vietnam leadership,Gens. William DePuy, Paul Gorman

and Donn Starry, began building in themid-1970s.

DePuy, the commander of Training

and Doctrine Command (TRADOC),was the principal force drivingchange. DePuy saw warfare through a

different lens. He had led an infantry

platoon from Utah Beach through theBattle of the Bulge in World War II.

DePuy acknowledged the US Army’sdefeat in Vietnam, but he knew the USArmy had to change its focus to fight a

capable opponent like the Sovietarmed forces.

Israel’s sobering experience in the

1973 war with Egypt and Syria rein-forced DePuy’s conviction that theArmy needed a new war-fighting doc-

trine to guide investments in humancapital, organization, and technology.The battle of 73 Easting was DePuy’s

crowning achievement.

Acquisition MisfiresSadly, war often makes victorious

armies stupid and Desert Storm wasno exception. Twenty-five years later,

DePuy’s Army is in ruins. Thanks to a series of multibillion-

dollar acquisition failures like the

sprawling $20 billion Future CombatSystem, the Ground Combat Vehicleand Armed Aerial Scout, the US Army

is caught in a modernization deathspiral.

The outcome is an unfocused, sin-

gle-service acquisition plan designed

to upgrade 1980s vintage platformsand weapon systems or selectively

replace systems inside the old struc-ture on a one-for-one basis with com-parable, more expensive versions of

existing aircraft, tanks, trucks andguns.

Any closed system evolves toward a

state of entropy and the US Army isvery, very closed. Closed systems also

breed fear of the kind of change in

organization and technology that Gen.DePuy and his successors embraced.

The idea of moving the US Army out

of the industrial-age structure basedon single-service self-sufficiency intoan organizational design based on

integrated, joint operations or service

interdependency remains anathema tothe US Army.

The critical need for an Army com-posed of self-contained independentbattle groups that operate on land the

way the Navy’s ships operate at seawithin the framework of joint, in-tegrated intelligence, surveillance and

reconnaissance; strike; maneuver andsustainment is stubbornly and myo-pically resisted.

As a result, the opportunity to pur-

sue full-spectrum rapid prototyping ofpowerful new operational capabilities

— organizing construct, human cap-ital strategy and equipment, not justthe technology — is lost. Instead, the

Army clings to brigade combat teams,in uneven states of readiness, depen-

dent on division and corps headquar-

ters and support structures.In 1991, the US Army stripped out

several divisions to field full-strength

brigades and divisions in Saudi Arabiabefore engaging the enemy. In today’scome-as-you-are war-fighting environ-

ment, this is a non-starter.

How Many 4-Stars?Like the other services, the US

Army’s organization for combat

should not be viewed in isolation from

its “corporate overhead.” The fact thatfour Army four stars — George Mar-shall, Douglas MacArthur, Dwight

Eisenhower and Henry Arnold—could command and effectively em-ploy 6 million American soldiers in

World War II while today’s shrinkingArmy of 490,000 needs six four starsto manage the force should alert the

politicians in both parties to theArmy’s problems.

Breaking open closed systems is

never pleasant, but it must be done.The Army’s passion for rewardingofficers who reinforce their bosses’

prejudices and beliefs makes the taskeven more challenging.

If nothing is done, Americans will

end up much like Mark Baum, the

hedge fund manager in the “The BigShort.” Baum was horrified to discov-

er that widespread fraud in the mort-

gage market would precipitate aneconomic collapse on a national, even

global scale.If nothing is done, Americans will be

equally horrified when they are sur-

prised not by victory, but defeat. DN

War Makes Victorious Armies StupidBy DouglasMacgregor,executive vicepresident of BMG LLC,a decorated combatveteran and author.His newest book,“Margin of Victory,”will be available inJune.

Pascal Guyot/AFP/Getty Images

A US Marine Corps special forces member inspects a destroyed Iraqi ArmyRussian-made T-62 tank Feb. 27, 1991, in Kuwait City after allied troops liberated thecapital. The US Army, rebuilt after the failure of Vietnam and so successful againstIraq, is facing new challenges.

A Rebuilt ArmyAfter Vietnam Is Regressing

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