California Budget Is Already in the Red Only 10 Weeks After Passage

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Oct. 10 (Bloomberg) — California Governor Arnold Schwarzenegger will know within a month whether a $1.1 billion drop in revenue collections is part of a growing budget shortfall or an isolated event, his budget spokesman said.

Revenue in the three months ended Sept. 30 was 5.3 percent less than assumed in the $85 billion annual budget, state controller John Chiang reported yesterday. Income tax receipts led the gap, as unemployment reached 12.2 percent in August.

“The culprit here appears to be estimated quarterly personal income tax statements,” H.D. Palmer, the governor’s budget spokesman, said yesterday. “The numbers are cause for concern, but the issue now for us is to determine if this is a one-time event or whether it has more long-term implications.”

Read moreCalifornia Budget Is Already in the Red Only 10 Weeks After Passage

Secret Pentagon Funding Near All-Time High

The latest Pentagon budget request contains a near record high level of money for classified, or “black” programs, reports the Center for Strategic and Budgetary Assessments.  Fiscal year 2009 includes a whopping $34 billion to fund classified weapons purchases and development, though it is not the highest level ever.

“The FY 2007 level is higher than the FY 2009 request primarily because it includes war-related funding, while the FY 2009 figure does not,” notes the report, which is updated annually by Steven Kosiak. “It is likely that once war-related funding is included, the FY 2009 total will surpass the FY 2007 level-making it the highest total for classified acquisition programs since FY 1987 in real terms.”

The updated report does not speculate on what specific programs are being funded–though past reports have noted that classified space programs account for a good portion of the total. Longtime aerospace reporter Bill Sweetman has speculated that some chunk of this large amount of change is going toward a classified bomber prototype. And of course there’s also been longtime speculation–but little concrete proof–of an “Aurora” hypersonic aircraft (though if Aurora exists/existed, then someone needs to explain why the Pentagon’s Defense Advanced Research Projects Agency is proposing Blackswift, a new hypersonic aicraft?).

Classified programs, though they have have produced some notable successes, like the B-2, have their downsides, as Kosiak points out.  “Restrictions placed on access to classified funding have meant that DoD and Congress typically exercise less oversight over classified programs than unclassified ones,” Kosiak writes. “This lower level of scrutiny, coupled with the compartmentalization of information generally associated with classified efforts has contributed to performance problems and cost growth in a number of programs, such as the Navy’s ill-fated A-12 attack aircraft program.”

By Sharon Weinberger
June 20, 2008

Source: Wired

GAO Blasts Weapons Budget

Cost Overruns Hit $295 Billion
Government auditors issued a scathing review yesterday of dozens of the Pentagon’s biggest weapons systems, saying ships, aircraft and satellites are billions of dollars over budget and years behind schedule.

The Government Accountability Office found that 95 major systems have exceeded their original budgets by a total of $295 billion, bringing their total cost to $1.6 trillion, and are delivered almost two years late on average. In addition, none of the systems that the GAO looked at had met all of the standards for best management practices during their development stages.


The Navy expects the costs of its first two Littoral Combat Ships to exceed their combined budget of $472 million by more than 100 percent. (Lockheed Martin Via Associated Press)

Auditors said the Defense Department showed few signs of improvement since the GAO began issuing its annual assessments of selected weapons systems six years ago. “It’s not getting any better by any means,” said Michael Sullivan, director of the GAO’s acquisition and sourcing team. “It’s taking longer and costing more.”

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China announces largest military budget ever

BEIJING — China announced its largest ever defense budget Tuesday, a day after the Pentagon warned that China’s burgeoning military is fine-tuning its abilities for cyber-warfare and in disabling the satellites of potential enemies. China’s defense budget will rise to $59 billion this year, an increase of 17.6 percent over a year earlier, said Jiang Enzhu, a spokesman for the National People’s Congress.

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