Study Sees $10 Billion A Year Minimum For Missile Defense

Outlays To Reach $15 Billion Peak In Fiscal 2016

U.S. spending on ballistic missile defense should average about $10 billion per year, with a possibility the annual outlays might be $3 billion higher than that to cover cost overruns, a study by the nonpartisan Congressional Budget Office (CBO) found.

Those figures don’t include another roughly $500 million a year for acquiring systems defending against incoming enemy missiles in their final, or terminal, phases of trajectory, CBO stated.

Spending on ballistic missile defense (BMD) programs would peak in 2016 at about $15 billion, not including the cushion for cost overruns. That 2016 estimate of peak spending is about three years later than CBO estimated just a year ago, because of delays in missile shield programs.

And the actual dollar figures as years unfold would be greater than these figures suggest, because of inflation.

The study breaks down projected outlays for BMD programs into three groups, depending on whether a given missile-shield system would hit enemy weapons in their initial or boost phase, or in their mid-course trajectory, or in their final or terminal phase of flight.

In the mid-course shields, the Ground-Based Midcourse Defense (GMD) system would cost a total of about $18 billion over several years, according to CBO.

“Deployment of that expanded GMD system would be completed in about 2013, with procurement of spare interceptors to continue through 2017, at a total cost of roughly $18 billion over the 2007-2017 period,” CBO projected.

“CBO’s projection of [the Department of Defense (DOD)] current plans incorporates the assumption that the [GMD initial defense capability] will subsequently be expanded to include additional land-based radar as well as a third site for interceptor missiles that will not necessarily be located in the United States,” the report notes..

The GMD program is led by The Boeing Co. [BA] as the prime contractor, aided by Raytheon Co. [RTN], Northrop Grumman Corp. [NOC], Lockheed Martin Corp. [LMT], Orbital Sciences Corp. [ORB], Bechtel Facilities and Teledyne Brown Engineering, a Teledyne Technologies [TDY] unit.

Another midcourse shield is the sea-based BMD system using the Aegis radar and weapon control system and SM-3 Block II missiles. CBO projects procurement of these missiles by the Navy in 2013, reaching $1 billion per year in 2015 to 2019.

Lockheed is the combat system engineering agent and prime contractor for the Aegis Weapon System and Vertical Launch System installed in Aegis equipped cruisers and destroyers. Raytheon Missile Systems of Tucson is the prime contractor for the SM-3 missile and all previous variants of Standard Missile.

“Current … plans include the development of a new, larger version of the SM, designated as SM-3 Block II, to increase the effectiveness of the system against more difficult threats, including long-range ballistic missiles,” the report noted, adding that the Missile Defense Agency (MDA) is developing the Block II in concert with Japan.

“CBO has assumed the Navy will procure this new version of the SM-3 missile at a level sufficient to perform BMD from 25 percent of the available vertical launch system tubes on Aegis-equipped ships,” the report states.

Moving to space, the report assesses Pentagon plans to develop and deploy in low Earth orbit a constellation of space-based infrared sensor satellites that might cost $7 billion for two spirals of satellites over the better part of two decades.

They would detect and track missiles and their warheads from shortly after their launch to their reentry into the atmosphere and to relay those tracking data to interceptors in flight, enabling them to identify and hit the warheads, CBO notes.

The Space Tracking and Surveillance System would see two initial satellites inserted into orbit next year, and more later, though perhaps settling, ultimately, for less than the once-contemplated 24 to 27 sats.

Finally, CBO examined the two programs designed to kill enemy missiles early in their flight, in the boost phase. Those programs are the Airborne Laser (ABL) and the Kinetic Energy Interceptor (KEI).

In ABL, Boeing is supplying a huge 747-400 modified aircraft with a special nose and also handles broader program issues, while Northrop Grumman supplies laser gear.

Unlike other BMD programs that rely on a missile hitting an enemy missile at a very precise point in the sky or space, which has been likened to having a bullet hit a bullet, the ABL system can aim a steady and continuous laser beam at an enemy missile as it rises from a launch pad or silo, until the laser finally demolishes the missile and fries its electronics.

“MDA has delayed plans for procurement of a second ABL aircraft, contingent on the outcome of [a future] test,” CBO noted.

CBO assumed that the second aircraft would be procured in 2012 and, consistent with previous plans formulated by both MDA and the Air Force, the Air Force would procure an additional seven operational aircraft starting in 2015.

CBO noted that while MDA leaders once were saying that they might make a choice between ABL and KEI for a boost-phase missile interceptor shield, more recently “MDA’s vision for KEI has grown from a boost-phase alternative to a potential next-generation replacement for midcourse or terminal interceptors.”

Further, “current MDA budget documents describe KEI as a ‘complement’ to the ABL.”

The CBO projections don’t assume that either program will be killed, proceeding instead on the assumption “that both ABL and KEI will be fully developed and fielded.”

However, CBO noted in the report to key senators, “actual costs could be reduced [from CBO estimates] if MDA should decide to terminate one of the programs.”

The CBO report also examines the Space Test Bed program, with MDA providing about $500 million for it in fiscal 2008, seeing an operational space-based interceptor developed and available around 2017.

Finally, the CBO report examines BMD shields that would attack enemy missiles in their terminal phase trajectories, programs which the watchdog agency expects to average a total $2 billion in outlays each year.

These include the ground-based PAC-3 short-range missile defense system, the Medium Extended Air Defense System (MEADS), and the Theater High Altitude Area Defense (THAAD) system. Raytheon is the prime contractor for the Patriot PAC-3.

Lockheed in the United States, DaimlerChrysler Aerospace AG in Germany, and Alenia Marconi Systems in Italy are the MEADS contractors. The THAAD Program is managed by MDA and executed by the THAAD Project Office in Huntsville, Ala. Lockheed is the prime contractor.

“The PAC-3, already in operation by the Army, will eventually be replaced by MEADS, which is an international joint venture with Italy and Germany,” the CBO noted. While MDA is developing THAAD, “CBO’s projections incorporate the assumption that as the THAAD system’s operational deployment proceeds beyond 2011, its funding will move from MDA to the Army.”

CBO prepared the report, which also details spending projections for other military outlays over coming years, for Sen. Judd Greg (R-N.H.), chairman of the Senate Budget Committee.

The study of more than 20 pages that is entitled “Long-Term Implications of Current Defense Plans: Summary Update for Fiscal Year 2007” and dated this month can viewed in full at http://www.cbo.gov on the Web.