TheHonorable Daniel Inouye, Chairman
TheHonorable Thad Cochran, Ranking Member
Committeeon Appropriations
UnitedStates Senate
RoomS-128, The Capitol
Washington,DC 20510
TheHonorable Harold Rogers, ChairmanTheHonorable Norman Dicks, Ranking MemberCommitteeon AppropriationsUnitedStates House of RepresentativesRoomH-307, The CapitolWashington,DC 20515
Dear Chairman Inouye, RankingMember Cochran, Chairman Rogers, Ranking Member Dicks, andMembers of the Committees:
During the course of this year, your Committees haveconfronted numerous budgetary challenges in a particularly difficult economicand fiscal environment. Nowhere has the need to craft effective and efficientpolicy for the nation and its taxpayers been more critical than in America’sdefense programs. As you and your colleagues continue discussion of thesematters, I write today to offer the views of the 362,000-member NationalTaxpayers Union (NTU) on a decision the Senate Committee on Appropriations recentlymade whose importance cannot be overstated: the decision to concentrate federalfunding in the Fiscal Year 2012 Defense Appropriations Bill for development andprocurement of the SM-3 Block I-B and II-A defensive missiles instead of themore tenuous II-B program. NTU believes that the Senate Committee’s fundingchoice on SM-3 represents the best possible prioritization of resources basedon prudent risk assessments, and would urge that any conference agreementreflect this stance.
As you may know, since its founding in 1969 NTU and itsmembers have been involved in a plethora of discussions over defense purchasingpolicies, including in recent times the F-35 alternate engine, the CommonVertical Lift Support Program, and the Evolved Expendable Launch Vehicle. Witheach of these cases, our mission has been to obtain maximum value toservicepeople and taxpayers. Few areas of military procurement pose moredifficulties for striking this appropriate balance than in highly complex airand missile defense systems such as the Aegis platform. Although the SM-3, theprimary weapon component of Aegis’s latest phase, has a considerable lineage inthe Navy’s missile inventory, its variants have major differences inperformance and feasibility. Currently the most ambitious SM-3 design is theBlock II-B interceptor, whose deployment is not likely to occur before the year2020. Meanwhile the Block 1-B is slated for production in 2013, while the BlockII-A could be fielded by 2018. These latter two versions show promise ofoffering solid anti-missile capability in the intermediate future, while II-Aoffers the advantage of a willing development partner (and funder) in thenation of Japan and continued compatibility with existing shipboard launchers.
Thus, NTU was pleased to learn of the Senate Committee’sconcern in its September report that:
[N]ear-term requirements are underappreciatedin order to fund uncertain long-term efforts. In addition, the Committee notes that the requirements for the SM-3 BlockII-B remain in flux, as does its acquisition strategy and the associated costs for integration into the Fleet.Finally, the Committee understands thatin its current form, the SM-3 Block II-B missile is of limited mission valuedue to technical constraints.
To be clear, NTU may not have deep technical expertise inmilitary hardware and software issues such as these. Nonetheless, our fourdecades of experience with government procurement give us confidence in thewisdom of the Committee’s unanimous vote to redirect funding away from BlockII-B and toward Blocks I-B and II-A. It seems a tautology to acknowledge thatprojects involving major leaps of technology likewise tend to carry major risksof being over-budget, behind schedule, and underwhelming in performance. Yet,policymakers must often relearn this hard lesson about diligent oversight, atboth taxpayers’ expense and a loss to the services’ practical capabilities. Oneexample is the Airborne Laser (ABL), which according to the GovernmentAccountability Office (GAO) has been plagued with “long-standing technical problems, cost growth, andschedule delays.” In a 2010 assessment, GAO noted that “the program currentlyestimates that the cost of the ABL through the first lethality demonstration isnearly $5.1 billion, almost five times the approximate $1 billion estimated forthe original contract in 1996.” Another program with an all-too-familiar fiscalhistory was the Comanche helicopter; this project was terminated in 2004 aftervarious restructuring attempts over the period of two decades failed to containunit costs, which had quadrupled even when accounting for inflation. The $11billion Crusader artillery system threatened to inflict pain on taxpayers beforeit was ended in 2002 amid a controversial development spanning nearly eightyears.
NTUactively supported DoD’s actions to end the latter two projects, which occurredat a time when the gross federal debt was less than half what it is today indollar amount and about 40 percent smaller than today as a share of GrossDomestic Product. Clearly, the current, more perilous state of the federalgovernment’s finances argues for even greater attention to avoidingcost-spirals and failures in programs with “known unknowns” (as former DefenseSecretary Rumsfeld often put it). SM-3 Block II-B is fraught with such factors,giving cause for many leaders in the Ballistic Missile Defense field toadvocate for accelerated Block I-B and Block II-A evolution. They do so notonly out of concern for the fiscal implications, but out of military necessityto counter emerging threats with better-proven technologies. Retired AdmiralWilliams and Rear Admiral Hicks are just two such leaders who believe thatcurrent SM-3 blocks have demonstrated a higher value as missile interceptorsthan most warfighters had anticipated.
Granted,there are critics of the Senate Committee’s funding plan who insist thatpushing ahead with full funding for Block II-B could lead to breakthroughs innew defensive capacity against long-range ballistic missiles. Furthermore, NTUremains a steadfast proponent of vigorous competition for future contracts inmissile defense and in numerous other applications, military or civilian. Unfortunately,as GAO has amply documented, the Ballistic Missile Defense program – rangingfrom the THAADS system to ABL – has been burdened with schedule slippages,budget overages, and systems whose performance has fallen short of initialdesign goals or claims of manufacturers. Several billion dollars in potential savings are at stake from avoidingimmediate commitments to a program (Block II-B) that is more in the conceptualstage than the full-scale development stage. The path the Committee haschosen, in carefully allocating finite funds to missiles with more predictablecosts and capabilities, is the best course both for our national security andour economic security. SenateAppropriators are to be commended for recognizing the need to move in thisdirection.
Aswe have pointed out in previous communications, given the present fiscalclimate it is more imperative than ever before to heed the advice from former JointChiefs Chairman Admiral Mullen and “steward every dollar that we have.” The SenateCommittee on Appropriations has done so in the case of SM-3 Blocks I-B andII-A, and we are hopeful that the House will embrace this thoughtful policy inthe next steps of the appropriations process as well. NTU stands ready toassist you in this regard.
Sincerely,
Pete SeppExecutive Vice President