Obama’s Budget Calls for Billions in New Spending for Drones

Tuesday 02 February 2010
by: Jason Leopold, t r u t h o u t | Report

This is how major US defense contractors reacted to the unveiling of President Barack Obama’s fiscal year 2011 spending plan for the Pentagon, part of the president’s overall $3.8 trillion budget proposal.

Shares of General Dynamics, a maker of military aircraft, submarines and munitions, rose 3.9 percent and closed at $69.43 in trading on the New York Stock Exchange, the uptick due in large part to additional spending on the war in Afghanistan, according to Sanford Bernstein, a financial research firm.

Northrop Grumman Corp., which builds unmanned spy planes and ships, rose 2.3 percent to close at $57.92. Boeing Co., a manufacturer of aircraft carriers, shares increased by 1.8 and closed at $61.70. Lockheed Martin’s shares rose 37 cents to close at $74.89. Raytheon Co., a missile supplier, was up by a percentage point to close at $52.96, while shares of L-3 Communications Holdings, a firm that supplies intelligence gathering and monitoring equipment, was up 1.6 percent to close at $84.64. And shares of Harris Corp soared 4.2 percent to close at $44.74. Harris manufactures tactical radios utilizes encryption technology.

All in all, it was a good day for the military-industrial complex. More….

Declining Defense: Obama’s budget does cut one federal department.

Wall Street Journal
* REVIEW & OUTLOOK
* MARCH 2, 2009

For all of his lavish new spending plans, President Obama is making one major exception: defense. His fiscal 2010 budget telegraphs that Pentagon spending is going to be under pressure in the years going forward.

The White House proposes to spend $533.7 billion on the Pentagon, a 4% increase over 2009. Include spending on Iraq and Afghanistan, which would be another $130 billion (or a total of $664 billion), and overall defense spending would be around 4.2% of GDP, the same as 2007.

However, that 4% funding increase for the Pentagon trails the 6.7% overall rise in the 2010 budget — and defense received almost nothing extra in the recent stimulus bill. The Joint Chiefs requested $584 billion for 2010 and have suggested a spending floor of 4% of GDP. Both pleas fell on deaf ears. The White House budget puts baseline defense spending at 3.7% of GDP, not including Iraq and Afghanistan. The budget summary pleads “scarce resources” for the defense shortfall, which is preposterous given the domestic spending blowout.