This weekend and over the next month they’ll send their high-powered lobbyist to gain assurances from their pet senators and congressmen that their key programs will remain safe from any future cuts.  Our legislators will try to put on their best face and tell them all is well. All the while they’ll quietly send their staffers to the Pentagon...Those staffers will tell the Pentagon budget planners…to start planning deep cuts. They’ll give these planners draconian bottom lines and tell them to meet them - period...Over the next few months rumors of the deep budget cuts will seep outside the Pentagon. Small programs, big programs – nothing will be sacred...The Air Force will get hit hardest since it’s currently the least favored branch among the political elites.... Don’t hold your breath on a new replacement rescue helicopter...Expect early retirement for various weapons systems...

Let’s see where we stand one month and over a trillion dollars later:

(Leaders) will assure defense contractors defense spending will remain strong: According to Rueters, "U.S. Defense Secretary Robert Gateson Tuesday struck an upbeat note about the future outlook for U.S. defense spending, citing strong bipartisan support for U.S. national security goals." 

Deep defense cuts: I guess Sec. Gates hasn't been talking to the movers and shakers in the upcoming Democratic congressional super-majority. Two weeks ago this story hit the papers:  "After the November election, Democrats will push for a second economic stimulus package that includes money for the states' stalled infrastructure projects, along with help paying for healthcare expenses, food stamps and extended unemployment benefits, U.S. Rep. Barney Frank said Thursday...(He) also called for a 25 percent cut in military spending, saying the Pentagon has to start choosing from its many weapons programs..."

Congress is already looking for offsets to pay for the bailout and stimulus packages.

 'Big programs, small programs, nothing will be sacred'…expect early retirement for various weapon systems’: According to Inside Defense and the Air Force Times, the service will cut over 300 frontline fighter aircraft by 2010, almost a decade ahead of schedule. This is about 15% of the services fighter force, significant by any standard.

Don’t hold your breath on a new rescue helicopter:  On 23 October the Washington Times reported the Air Force postponed awarding the CSAR-X helicopter until sometime next year, leaving it for the next presidential administration. The tanker is also now delayed until the next administration is seated.

1. After the election the Pentagon likely faces an openly hostile congress and administration in time of active war. Rep. Barney Frank’s 25% cut comment is a clear message of things to come.
2. Never has the Pentagon had to maintain a sustained forward force posture and active combat operations while America was so deep in debt (public and private).
3. Never has so much of that debt been held by potential hostile powers. He who holds the debt makes the rules.
4. Never has America experienced a deep recession as a consumer, not manufacturing or farming, economy. The Pentagon keeps many of America’s remaining heavy industry on life support, what happens to them in a shrinking economy and lower defense spending is uncertain.
5. The Pentagon has yet to factor in the new realities of global free trade into its acquisitions or defense posture. Its current budgeting and acquisitions framework hasn’t fundamentally changed since America was a creditor nation and General Motors ruled the world.
6. Never has the Pentagon had to rely of foreign sources, many potentially hostile for three critical items: funding (via investment in US debt), energy, and critical technologies. This is the true national security issue of our time.
7. What happens if we enter a period of increased inflation due to our current massive bailout and stimulus spending? This is a real possibility. A severely weakened dollar will discourage foreign (i.e. Chinese) investment in the debt & dollar. Inflation makes everything more expensive – like fuel for fighter jets or computer chips for guidance systems. A defense budget passed one year may assume a 5% inflation rate, but face 10% inflation when executed. Though the government doesn’t officially factor it in, energy is one of the biggest drivers for actual inflation.
8. Never has the Pentagon had to rely on an all-volunteer force during times of sustained combat operations. This has resulted in enormous personnel costs for a relatively small force. The only good news here is a poor economy makes for good recruiting and gives the Pentagon more flexibility in reigning in benefits.

All of these factors will come into play in the next 24 months and beyond to reshape how America defends herself and her global interests. I won’t venture anymore predictions other than hold on…its going to be a bumpy ride.