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Analysts, Industry Groups See Mixed News in U.S. Agencies’ 2012 Budget Requests

By | February 15, 2011

      [Satellite News 02-15-11] NASA, the U.S. National Oceanic and Atmospheric Association (NOAA) and the U.S. Department of Defense revealed their 2012 fiscal year budget proposals to Congress, giving insight into the spending plans of one the satellite industry’s most profitable and growing sectors.

      NASA requested $18.7 billion for its 2012 fiscal year 2012, seeking $4.3 billion for the space shuttle and International Space Station (ISS) programs, $5 billion for scientific research, $569 million for aeronautics research, and $3.9 billion for future exploration systems. The 2012 represents a $750 million budget cut from the authorized funding the agency received in 2011 and calls for a gradual $6.2 billion funding decrease over the next four years.
          NASA said it would prioritize funding for its partnerships with commercial space industry partners, including SpaceX, Orbital Sciences, Bigelow Aerospace and ATK, to facilitate crew and cargo transport to the station. The agency plans to use the ISS as a technology test-bed and national laboratory for human health research until 2020.
          NASA Administrator Charles Bolden said the budget supports all elements of NASA’s 2010 Authorization Act, which was passed by Congress and signed into law by U.S. President Barack Obama in October. “This budget requires us to live within our means so we can invest in our future. It maintains our commitment to human spaceflight and provides for strong programs to continue the outstanding science, aeronautics research and education needed to win the future,” Bolden said in the proposal.
          Aerospace Industries Association (AIA) CEO Marion Blakey labeled the budget a “disappointment” considering Obama’s recent push to solidify U.S. leadership in the international civil space arena. “In his State of the Union address, the president challenged this nation to embrace our Sputnik moment and win the future. Yet, the administration’s request for NASA fails to recognize the return on investment — both now and in the future — that our nation’s space program provides as we strive to innovate, educate and build an America of which we can be proud,” Blakey said in a statement.
           The AIA also said the budget would endanger industry employment, which includes more than 2 million domestic jobs and 30,000 supplier enterprises. “AIA understands the current difficult fiscal environment facing the entire U.S. government,” said Blakey. “It is important that near-term cuts aren’t made to programs that affect our long-standing tradition of leading in space and impair our investment in the future.” 

      U.S. Department of Defense
      The U.S. Department of Defense’s $553 billion 2012 budget proposal to Congress is a $4 billion increase from its requested funding in 2011, as the Pentagon seeks to boost support to its Department of Veterans Affairs and its co-managed budget with the U.S. State Department.
          While Defense Secretary Robert Gates requested $549 billion in 2011, the Pentagon was forced to remain at its 2010 budget level of $526 billion. For 2012, Gates highlighted support for unmanned aerial vehicles (UAV), stating that the number of missions will increase substantially as ground forces will have to be replaced by other means to gather intelligence.
      “The 2012 budget represents a reasonable, responsible and sustainable level of funding, the minimum level of defense spending that is necessary, given the security challenges we are facing around the globe," Gates said in the proposal.
          Blakey said the AIA was “encouraged” by the proposed increase in the 2012 U.S. defense budget. “At 34 percent of the total U.S. budget, it comes close to reaching the 35 percent marker that we think is needed to ensure a healthy industrial base for the aerospace and defense industry.”
           Blakey also mentioned that the AIA has long been concerned over the growing imbalance of military operational costs over investments. “Personnel and operations accounts are increasing at four times the rate of growth of the investment accounts and we are concerned about the long-term robustness of procurement and research. This year, for the first time since the beginning of flight, there is no new manned civil or military aircraft program in design, and there is a huge requirement to reset and replace equipment used in Iraq and Afghanistan,” she said.
          Analysis firm NSR said the proposed 2012 U.S. defense budget does not negatively impact the commercial satellite industry. The firm projected that commercial satcom companies could stand to benefit from increased demand created by diverted funds in the budget.
          “Defense spending for war efforts can, and will likely, continue to grow through 2014 before leveling off in 2015 and 2016. In the short term, specifically for 2011 to 2015, modest increases in the budget are foreseen. Demand for commercial satcoms that are currently used by ground troops should continue to grow at modest levels for the next four years,” NSR said in a report issued Feb 15.
          NSR also highlighted that the 2012 Pentagon budget request excludes war funding, specifically for Iraq and Afghanistan, which have seen continued growth for satellite communications. “On top of expected modest increases on the overall budget, war funding should continue at current, if not higher, levels through 2015 and perhaps beyond,” the firm said. “A large percentage of budget cuts will come from inefficient programs, and funds available will be re-directed to other programs. Moreover, tactical UAV missions similar to drone attacks in Pakistan are likely to be sustained, if not increased, in the two major hotspots with troop withdrawals.”

      The National Oceanic and Atmospheric Administration (NOAA) also released its 2012 fiscal year budget proposal, requesting $5.5 billion — a $56.8 million decrease compared to the agency’s 2011 budget — to support its critical programs and initiatives.
          In the proposal, NOAA Administrator Jane Lubchenco said the budget cuts would focus on sustaining core functions, investments and services. “NOAA will build upon and enhance its existing climate services to meet the nation’s rapidly growing data and information demands.”
          The NOAA budget dedicates $737 million to climate technology research and development, weather and ecosystem science, and for infrastructure, including satellite. The budget proposal also includes details for a reorganization to establish a climate service within NOAA, which Lubchenco said would be “budget neutral” and not have an impact on NOAA staffing levels.
          “Perhaps most significantly, this budget clearly recognizes the central role that science and technology play in stimulating the economy, creating new jobs and improving the health and security of Americans. Americans rely on NOAA science, services and stewardship to keep their families safe, their communities thriving, and their businesses strong. Our work is everyone’s business,” Lubchenco said.

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