Money Matters

Pentagon Shifts Spending Tactics

With details from President Obama's 1500-page budget emerging by the minute, the Associated Press reports that the Pentagon's proposed $534 billion budget will ratchet up spending on intelligence, surveillance, and reconnaissance—including billions for Lockheed Martin fighter jets, a naval destroyer, and a handful of new Black Hawk helicopters. In response, perhaps, to the increased threat of high seas pirates, the Navy is requesting cash from Congress for eight new ships. The Army's $142 billion budget includes $21 billion for buying weapons, a proportion representing a 9 percent drop from last year's budget. If the requested purchases for the Army, Navy, and Air Force go through, defense contractors Lockheed Martin, Boeing, and General Dynamics Corp. could end up with brisk federal business—but some of the money is aimed at restarting competition between contracting firms, including the "politically charged $35 billion tanker contract" expected to be awarded to either Northrop Grumman or rival Boeing next spring.