TABLE OF CONTENTS
 

A Preview of the FY’04 Pentagon Budget Request

Christopher Hellman, Senior Analyst, chellman@cdi.org

The White House will release its budget request for Fiscal Year 2004 (FY’04) on Monday, Feb. 3. Based on information gathered from a range of sources, here’s an overview of what one can expect to find:

Top Line –- Total Pentagon spending in FY’04 is expected to be $380 billion in outlays, roughly four percent above current levels. "Outlays" refer to funds actually spent in a given year, as opposed to "Budget Authority" which is the legal authority the government needs to spend money. As much as 40 percent of any year’s outlays are the result of budgetary decisions authorized in previous years. For example, the cost of a new aircraft carrier is authorized in a single year, but the actual outlays are made over a period of several years. For this reason, budget authority (BA) is considered by some analysts to be a better measure of federal spending priorities, as it shows intent. Figures for the Pentagon’s FY’04 budget authority have not yet been released, but last year’s budget request projected that BA would be $405 billion, roughly $12 billion above current levels, or an increase of three percent. Given the projected outlay increase, however, the actual BA request for FY’04 may well be higher, perhaps by as much as $15 billion.

Transformation -- Pentagon Comptroller Dov Zakheim has indicated that $23 billion in FY’04 will be dedicated to "transformational" technologies and programs intended to make the military more agile, lethal, and better able to conduct joint operations involving more than one of the military services. The Pentagon plans to spend almost $220 billion on programs deemed transformational from fiscal years 2004 through 2009. Questions remain, however, whether all these initiatives are truly transformational, or simply older programs that have been repackaged.

Savings –- In order to fund its transformation and find additional funds to cover the growing costs of pay, medical care and retirement benefits, the Pentagon plans to achieve $90 billion in savings through fiscal year 2009. The bulk of these savings would be achieved by the early retirement of aging systems that become increasingly expensive to operate and maintain as they get older, and by reducing the numbers of some new weapons that will be bought. No major weapons programs are cancelled in the FY’04 budget. Systems to be retired early include Spruance class destroyers, Phoenix air-to-air missiles, and the oldest KC-135 airborne refueling tankers. Upgrades to the Bradley Fighting Vehicle and the Abrams M1-A1 tank will be cancelled. The numbers of the Army’s Comanche helicopter to be purchased will be reduced by as much as 50 percent, and the total number of Joint Strike Fighters may also be cut. Yet $90 billion in savings over six years seems hardly sufficient to cover the costs of all these initiatives. Further, there is no guarantee that Congress will accept, all, or even any, of these cuts.

Missile Defense –- The request for missile defense is expected to be $8 billion, up slightly from current levels. Missile defense will receive a total of $55 billion through 2009.

Nuclear Non-proliferation Programs -– The Cooperative Threat Reduction initiative, also known as the "Nunn-Lugar" program, provides assistance to Russia and the former Soviet republics to reduce the risk of accidental or intentional proliferation of nuclear materials and technologies. The FY’04 request will increase funding for these programs by roughly 30 percent, from $1 billion to $1.3 billion. Concerns have been expressed, however, about whether the funding will be targeted at the most important initiatives in the program.

Homeland Security –- Homeland security received roughly $38 billion in the current fiscal year, double the previous year. The overwhelming majority of this funding is outside the Pentagon’s budget, and supports the activities of other federal agencies like the Coast Guard, FBI and Immigration and Naturalization Service (INS). No figures on the FY’04 funding for homeland security are as yet available, but Mitchell E. Daniels, Jr., director of the Office of Management and Budget (OMB) has said that the increases will be "substantial."

Defense hawks in Congress are already saying that the proposed spending levels are too low, and will be looking to boost the top line. Representative Duncan Hunter (R-Calif.), the new chairman of the House Armed Services Committee, has already made clear his intent to provide additional resources for the Pentagon. This will bring him in to direct conflict with fiscal conservatives even in his own party, who will cite this week’s reports by OMB and the Congressional Budget Office that put the FY’04 deficit as high as $300 billion.

A full analysis of the FY’04 Pentagon funding request will be available on the CDI website at 9:00am Eastern, on Monday, Feb. 3 at: http://www.cdi.org/budget/2004/

A Nuclear 9/11: Imminent or Inflated Threat?

Mark Burgess, Research Analyst, mburgess@cdi.org

The possibility that terrorists might crash a hijacked airliner into a nuclear power plant is one of the more nightmarish scenarios to have surfaced since the al Qaeda attacks on the Pentagon and the World Trade Center on Sept. 11, 2001. However, disagreement remains as to whether a plant could survive such an attack as well as the likely consequences.

Consequences

According to a January/ February 2002 article in the Bulletin of the Atomic Scientists, an average nuclear power plant contains 1,000 times as much long-lived radioactivity than was released by the Hiroshima bomb. The spent fuel pools at such a plant are said to contain "some multiple of that – several Chernobyl’s worth." However, unlike an atomic bomb, any damage from a terrorist attack on a nuclear power plant would result almost entirely from the release of radioactivity, not the initial blast, although casualties would be similar. According to a Nuclear Regulatory Commission (NRC) study, a meltdown at one of Southern California’s San Onofre reactors could cause: 130,000 ‘prompt’ fatalities; 300,000 latent cancers; and 600,000 cases of genetic defects. Another study carried out for the NRC in 1980 estimated that such an incident would cost up to $314 billion (around $700 billion in today’s dollars).

Others remain less convinced of the dangers posed by such an incident. One controversial September 2002 article in Science magazine, by Douglas M. Chapin and 18 other members of the National Academy of Engineering, claims that the implications of the 1986 Chernobyl accident are not applicable to American reactors, as on that occasion the fissile materials were mainly dispersed into the atmosphere by burning graphite. This article also goes on to claim that: "The terrible and widespread consequences of that accident – increased suicide, alcoholism, depression, and unemployment, plus 100,000 unnecessary abortions – were caused primarily by fear of radiation and by poor planning based on that fear." Such findings contrast with those of the United Nations, which highlights a 25-fold increase in childhood thyroid cancers in some cities in Belarus, and explicitly link this to the accident at Chernobyl. Another study, by Richard L. Garwin, estimates that some 24,000 unidentified deaths are likely to be caused by the radioactive material released at Chernobyl.

Nuclear Power Plant Survivability

Nuclear power plants are designed to withstand extreme events such as hurricanes, tornadoes and earthquakes, but not necessarily to survive attacks by terrorists using large airliners such as Boeing 757s or 767s as ballistic missiles. The Nuclear Control Institute (NCI) -- an organization often critical of safety at nuclear plants -- estimates that a direct, high-speed hit by a large commercial passenger jet would "have a high likelihood of penetrating a containment building" that houses a power reactor. According to the NCI, such an incident could cause a significant release of radiation into the environment and result in tens of thousands of cancer deaths.

The authors of the September 2002 Science article disagree, citing a 1988 test in which an unmanned plane was flown at around 480 mph into a 12-foot thick concrete wall. The plane was destroyed by the impact, its engines only piercing the structure by a couple of inches, while the main body penetrated even less. The article also concluded that the greater impact of larger planes was offset by their absorption of more energy in their collapse, and that higher speed, while increasing the impact, would not do so "enough to matter."

However, a report by Sandia National Laboratories -- which conducted this test –- says it was meant to measure the jet’s impact not the strength of the wall. Moreover, the wall in question was not embedded in the ground as would be the case with that of a nuclear power plant. Consequently, according to the official test report, "the major portion of the impact energy went into movement of the target and not in producing structural damage." For their part, while Chapin et al concede that the test was not intended to measure the survivability of a concrete structure in such an incident, they maintain that it nonetheless confirms that large aircraft disintegrate on impact, causing little penetration. This appears to ignore that fact that the F-4 Phantom fighter used in the tests is considerably smaller and lighter than a large civilian airliner. It also does not address the dangers posed should an aircraft be crashed into a plant’s spent fuel pool rather than its reactor.

Spent Fuel Pools

Such pools, generally around 40-feet deep, are made of reinforced concrete walls four or five feet thick with stainless steel liners. They are used to store and cool spent nuclear fuel, and can hold five to ten times more long-lived radioactivity than the reactor core itself. The biggest risk with such pools is said to stem from water loss.

If this happens the spent fuel can become exposed to air and steam. Its zirconium cladding would then react exothermically (giving off heat) and catch fire at 1,000 degrees Celsius. Ironically, this process may be aided by the pools’ safety equipment that is packed between fuel assemblies to guard against the risk of criticality by controlling water chemistry and absorbing neutrons. According to the NRC, this safety equipment could restrict air and water flow to exposed spent fuel assemblies in the event of a terrorist attack that compromised the integrity of the cooling pool.

This could release up to 100 percent of the highly dangerous isotope cesium 137 contained in the pool. A 1997 study for the NRC estimates that a severe pool fire could cause up to 28,000 cancer fatalities, render some 188 square miles of territory uninhabitable, and cause $59 billion in damage. Moreover, as the NRC acknowledges, the risk of a zirconium fire cannot be dismissed even years after spent fuel has been moved into storage.

The Wrong Threat?

Such risks notwithstanding, recent computer analyses conducted by the Electric Power and Research Institute (EPRI) on behalf of the Nuclear Energy Institute – a trade association of utilities and nuclear energy firms -- found that a used fuel pool, the reactor containment structure, used fuel ‘dry’ storage facilities, and used fuel transportation containers would all survive a direct impact from a fuel laden airliner. Some, such as NCI President, Edwin Lyman, dispute such findings, claiming "we can’t take anything the [nuclear] industry says at face value."

Underlying the seeming interminable nature of such disagreement is the fact that the debate often appears less about the risk posed by a terrorist attack on a nuclear power plant than more general safety concerns over such plants. These concerns pre-date the terrorist attacks of Sept. 11, 2001, and may be distorting the actual risks posed by a terrorist kamikaze attack on such a target by a large airliner.

The willingness of al Qaeda and their fellow travelers to commit such an act cannot be doubted after the attacks on New York and the Pentagon. Similarly, while as outlined above, consensus does not exist as to the damage any breech of a nuclear reactor would entail, the weight of scientific opinion suggests that such an event could be catastrophic – more so if the spent fuel pool is the target of the attack. However, not only does the recent EPRI study conclude that nuclear power plants are structurally secure against attack by terrorists crashing airliners into them, but ‘Silent Vector’ – an exercise conducted by the Center for Strategic and International Studies (CSIS) that examined the vulnerability of America’s energy industry to terrorist attack -- concluded that nuclear power plants were relatively secure. According to CSIS President John Hamre, "Nuclear plants remain the best-defended parts of the energy infrastructure." Conversely, chemical storage sites and liquefied natural gas facilities were found to “remain a problem.” As such findings indicate, the risk of terrorists crashing a hijacked airliner into a nuclear plant is not the only potential threat facing America’s energy infrastructure. Nor is it necessarily the greatest.

Moreover, by storming their hijackers and causing the plane to crash before reaching its target, United Airlines flight 93’s passengers showed that hijacking an American airliner for use as a ballistic missile will never again be as easy as it once was. In addition, according to a Dec. 8, 2002, New York Times article, 19 percent of guards at the Indian Point nuclear facility allegedly do not believe they provide sufficient protection for the plant against terrorist attack. As this shows, an attack using an airliner is not the only danger when considering plant security, and probably not the most likely.

Looked at together, all these factors suggest that only an independent study of the vulnerabilities of America’s entire civilian infrastructure can give a true picture of the threat posed to it by terrorists. Huge though such an undertaking might be, it is the only way to comprehensively assess and prioritize the terrorist threat to American soil.

CDI’s "Briefing Room"

U.S. Forces Already In Iraq — Gen. Richard B. Myers, chairman of the Joint Chiefs of Staff, indicated that small numbers of U.S. personnel are already operating in Iraq, a fact that has long been suspected but until now unconfirmed by the United States. Responding to questions about U.S. operations in Iraq, Myers responded "there are not significant [U.S.] military forces in Northern Iraq right now." Other Defense Department officials have indicated that U.S. special forces personnel were operating in the region in conjunction with CIA agents, and that the number of CIA operatives involved exceeded the number of U.S. military personnel.

Israel Mulling Arrow Sales to India —U.S. and Indian officials discussed the possibility of India acquiring Israel’s Arrow anti-missile system during recent talks in New Dehli, according to Aerospace Daily (Jan. 21). The Arrow system is being jointly developed by the United States and Israel, with significant U.S. financial support. Because of this, any sale to a third party would require U.S. approval. India is seeking Arrow, and other anti-missile systems, to counter the possible threats from China and Pakistan. Some analysts believe, however, that the sale would violate the Missile Technology Control Regime (MTCR), and that therefore will not be approved.

Researchers Link Agent Orange to Leukemia —Researchers have found a link between Agent Orange and other herbicides and a certain type of leukemia, prompting the Department of Veterans Affairs (VA) to announce it will provide improved benefits to veterans with the illness. According to the VA, veterans diagnosed with Chronic Lymphocytic Leukemia (CLL) will begin to receive disability compensation and priority health care services in about a year. The VA expects to find about 500 new cases of CLL a year among Vietnam veterans. Currently there are an estimated 10,000 Vietnam veterans receiving disability pay for other illnesses related to exposure to Agent Orange.

U-2 Crashes In South Korea —A U.S. military U-2 reconnaissance plane crashed in South Korea (Jan. 26) after the pilot ejected safely. The jet, which was believed to have flown out of the U.S. Air Force base in Osan, crashed in Hwansung, about 30 miles south of Seoul, according to a South Korean defense ministry spokesperson. Three people were reported injured on the ground by the crash, which caused fires in several buildings.

This Week on SUPERPOWER: Global Affairs TV —
"Foreign Reaction to the State of the Union Address"

SUPERPOWER: Global Affairs TV examines the timely issues that affect the United States together with foreign experts from around the world.

By defining an "Axis of Evil" in last year's State of the Union address, President Bush sent shockwaves through America's allies and adversaries alike. This week's program will explore the content of the speech as perceived abroad. How compelling was the President's case against Iraq? And how is the tone of his rhetoric being received overseas?

Joining Superpower moderator Mark Thompson, national security correspondent for Time magazine will be Michael Backfisch, Washington Bureau Chief for Handelsblatt German Business Daily; and Katsu Furukawa Senior Research Associate at The Monterey Institute of International Studies.

If you would like to submit a question or comment to be read on this week's show, please send an e-mail to feedback@superpowertv.org.

WHERE TO SEE SUPERPOWER:

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