Defense Plans May Refocus on Home

A significant part of the $20 billion in emergency funding sought by the White House in response to terrorist attacks will be allocated to the Pentagon, the first step in a broad and long-term increase in military spending, a top Defense Department official said Thursday.

Saying that “everything is going to change,” Deputy Defense Secretary Paul Wolfowitz signaled the Bush administration’s initial plans for a sizable increase in the military that would be focused on defending the homeland.

Wolfowitz, along with other top Bush administration leaders, said the U.S. response would not be a single retaliation but a widespread campaign against both the terrorists and the nations that harbor them. That plan, Wolfowitz said, lays the groundwork for a long-term boost to the U.S. national security spending, which could have important implications for major U.S. defense centers, Southern California included.

“We are in a different era. I think the president has made that clear. The secretary of Defense has made that clear. Everything is going to change,” Wolfowitz said. “But we hope that with this $20-billion initial move forward . . . our enemies will get a message . . . that we’re serious.”

The Bush White House asked Congress on Wednesday for a $20-billion supplement to the fiscal 2001 budget to help rebuild, offer assistance and strengthen the military following the New York and Washington attacks. Senior congressional leaders, including the Senate Armed Services Committee Chairman Carl Levin (D-Mich.), have already pledged their support to Bush’s objectives.

House and Senate leaders upped the ante later Thursday by pledging to double to $40 billion the amount of emergency aid. House Speaker J. Dennis Hastert (R-Ill.), after visiting the Pentagon, said more money would be needed in coming weeks.

“It’s just monumental,” Hastert said. “Nobody knows how much it will cost.”

The money will be split into two parts, with half of it coming from the budget for the fiscal year that ends Sept. 30 and the rest in fiscal 2002, said John Scofield, a spokesman for the House Appropriations Committee. At least $20 billion must be spent to aid the victims of the attacks and to provide disaster relief for New York, Virginia and Pennsylvania, where planes commandeered by the terrorists hit.

Although the scope of any future buildup is far from clear, defense analysts said the remarks clearly show the Bush administration is rethinking the defense status quo.

“Threats that were abstractions before became tangible and urgently real,” said Loren Thompson, an analyst with the Lexington Institute, a defense policy think tank in Alexandria, Va. “What happened on Tuesday will put a lot of momentum to increasing military expenditure and changing the way things are done at the Pentagon. Nothing is sacred anymore.”

Wolfowitz’s comments do not amount to a formal proposal by the Bush administration to boost defense spending, though they could signal an early indication that such a proposal will grow out of the terrorist attack.

Congress is likely to view the missile defense program as one of a number of defensive systems needed for the protection of the U.S., though critics probably will question boosting funding to it in response to the low-tech terrorist attacks.

“You could argue that missile defense, especially national missile defense, is not necessary,” said Philip E. Coyle, senior fellow at the Center for Defense Information and former Pentagon chief for test and evaluation. “But I don’t think Congress will do that. They’ll support it and use the argument that there are all kinds of threats and we don’t know where it will come from.”

A defense buildup would come after more than a decade of military retrenchment with the collapse of the Soviet Union and the Cold War. Defense spending declined steadily from a peak of $343 billion in 1989 to $338 billion in the current fiscal year (the figures are inflation adjusted to 2001 dollars). As a percentage of the federal budget, defense spending dropped from 27% to 15%.

As such, it is likely to have wide-ranging ramifications for the defense industry, which has undergone massive consolidations in response to defense spending cuts. In the last decade, the nation’s top 25 defense contractors have consolidated into just five.

Kent Kresa, chairman of Los Angeles-based Northrop Grumman Corp., said that terrorist attacks have always been a high priority but that the defensive measures to protect the homeland will probably gain greater urgency.

“I think everybody needs to first figure out what exactly needs to be done and figure out how do we get the industry to bear on this war that the president is talking about winning,” Kresa said.

The remarks by Wolfowitz were made during a Pentagon news conference with reporters on the Bush administration’s request to Congress for the emergency funding.

Wolfowitz said he didn’t know how the funds would be divided, “partly because of the needs are so great.”

But he said that “obviously, a significant piece of this is going to be to bring our armed forces to the highest level of preparedness, to be able to execute whatever it is the president may ask them to do.”

“I think what this means is there are also going to be some huge requirements to build up our military for the next year, and maybe longer,” he said.

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Bloomberg News was used in compiling this report.