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Sluggish Economy Tightens DoD Budget

Photo: Robert F. Hale, Defense Department

The continuing downturn of the economy is affecting this year’s DoD budget. At the recent 2011 Defense Logistics Agency Industry Conference and Exhibition, Undersecretary of Defense Robert F. Hale had a very dim view of the future growth of the defense budget.

“There’s a rule of thumb that says you need a two to three percent growth to maintain current forces,” he said. “My guess is, we’ll end up with something like zero growth.”

The comptroller said 2 to 3 percent growth is necessary if DoD wants to fund bigger and better weaponry. “Those more sophisticated weapons tend to cost more than the ones they replaced, and they also tend to push up the costs of training and maintenance,” he said.

Hale said military healthcare and other costs add more pressure to the budget and that is forcing the department make some serious decisions. “We’ll have to take some risks, and stretch our dollars,” Hale said.

Incoming Defense Secretary Leon Panetta has the support of Hale, who said Panetta is the right person for the job. “He has a strong knowledge of the budget and strong managerial skills,” Hale noted.

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