Important correction and update, 3:30 pm MST

For Immediate Release Tuesday, 3/4/14

President Requests Unprecedented Spending on Nuclear Weapons Maintenance, Design, Production

Spending Requested Exceeds Reagan’s 1985 Maximum, Goes Up from There

Efficiency of Warhead Complex at Record Low as Billions Are Wasted in Failed Projects, Extreme Salaries, Contractor Subsidies

Contact: Greg Mello, 505-265-1200 office, 505-577-8563 cell

Albuquerque, NM – Today’s Department of Energy (DOE) budget request for fiscal year (FY2015) includes a requested $8.315 Billion (B) for nuclear “Weapons Activities” in the National Nuclear Security Administration (NNSA), a semi-autonomous component of DOE.  This does not include pro-rata administrative costs for NNSA’s warhead program, which come to about $293 million (M).  Total warhead spending is thus $8.608 B, not including $504 M in potential additional warhead spending (see below).

This is a 7% increase from the current year (FY2014).  The request is far higher, in constant dollars, than the $8.13 B spent in 1985 for comparable work at the height of President Reagan’s surge in nuclear weapons spending, which was also the highest point of the Cold War.  (See graph, below.)

Nota bene: An earlier edition of this press release said that “[a]lmost the entire increase in Weapons Activities funding ($504 M out of $534 M) [see slide 14 of Secretary Moniz budget rollout briefing] is to come from the President’s new “Opportunity, Growth, and Security Initiative” (OGSI).”  This was an error, and I am grateful to John Fleck of the Albuquerque Journal for chasing the truth down.

Instead, OGSI would provide an additional $504 M in Weapons Activities, if it is fully enacted, raising warhead spending to $8.8 B without administration or $9.1 B with it.

OGSI is a $56 B budget augmentation above the spending caps set by the December 2013 two-year bipartisan budget agreement, which is to be split evenly into defense and non-defense spending. According to the White House, “The [OGSI] will be paid for with a balanced package of tax loophole closers and spending reforms.”  This requires new legislation.  According to Science,

The new money is essentially contingent on Congress making changes to the tax code and spending priorities that aren’t likely to happen this fiscal year…One-half of the $56 billion would come from imposing new taxes on retirement funds owned by the wealthy; the other half from changes to politically sensitive crop insurance, unemployment, telecommunications, and airport security programs. Although many of these ideas have champions in Congress, each would spark major debate if lawmakers pushed them forward. And that is unlikely to happen with elections looming in November, and the broad outlines of a spending agreement already in place for the 2015 fiscal year (the result of last year’s government shutdown and budget face-off).”

Today’s budget request also includes $5.328 B for defense environmental cleanup, a 6.6% increase over FY14.  Correction (thanks to Staci Matlock, Santa Fe New Mexican): site splits for environmental management programs are given (p. 40 in “DOE Budget Highlights”).  Of local interest, LANL cleanup funds are flat year-on-year, at $225 M.

Site splits for other programs, totals for each state, and program details have not yet been released.  That is slated to occur on March 11.

Defense Nuclear Nonproliferation (DNN) would fall 20.4% to $1.954 B in the president’s request, in part because the Administration proposes to place the Mixed-Oxide Fuel Fabrication Facility (MFFF), an $8 B facility that is approximately two-thirds completed, into cold standby while DOE reevaluates plutonium disposition options.

Notably absent from today’s budget request is any mention of the W78/W88 Life Extension Program (LEP), which was to be the first of three “interoperable” warheads in a new stockpile modernization paradigm.  As we noted on December 7, this LEP has been indefinitely deferred – that is, cancelled.  Neither is there any mention of a W78 LEP to replace its Air Force component.  Speakers at the recent annual Deterrence Summit confirmed reports we are hearing on Capitol Hill that current surveillance indicates no near-term need for such a program.

The proposed new nuclear cruise missile warhead is now expected to go into production only in the FY25-27 timeframe.  The latter part of this window concurs with other reports and would be a three-year delay from the Administration’s plan of June, 2013.

Today’s budget confirms prior reports that the Uranium Processing Facility (UPF), an $11 to $19 B facility that was to be built at the Y-12 site in Tennessee, which has been under design for a decade, is now to be reconfigured and down-scoped.

There is no mention of design or construction of underground plutonium “modules” at Los Alamos National Laboratory (LANL).  Some design is currently underway using leftover funds from the now-cancelled Chemistry and Metallurgy Research Replacement Nuclear Facility (CMRR-NF).  Upon information and belief, the Nuclear Weapons Council has not endorsed design and construction of these modules, as required in sections 3117 and 3123 of the FY2014 National Defense Authorization Act (NDAA).

NNSA’s budget is now partly subsidized by DoD’s willingness to transfer some of its own budget authority to NNSA.  Today’s budget summary notes that DoD expects to contribute $1.44 B to NNSA in FY2016, $1.60 B in 2017, $1.67 B in 2018, $1.70 B in FY2019, and a total of $15.51 B from 2016 to 2024.  The budget summary tables also note (at p. 205) uncertainty about NNSA’s outyear needs: “DOD and NNSA are reviewing NNSA’s outyear requirements and these will be included in future reports to the Congress.”

Study Group Director Greg Mello: “Today’s budget request is a snapshot of an agency that is retrenching in multiple ways.  One highly-touted warhead program is absent; another is delayed.  Big construction projects are being downscaled and mothballed, while others remain in apparent limbo while requirements are reexamined.  Congress will probably whittle the top numbers back a bit and tweak the details, with a net result being no [better to have said: modest] net growth in nuclear weapons, especially in real terms.

"Should OGSI be funded, this would be a truly 'exploding' budget.  There is no way NNSA could spend such huge sums effectively.

“While proposed warhead spending for design, maintenance, and production is higher than ever before, spending is not as high as once was projected, and meanwhile costs are higher than ever.  Without termination, delay, and downscaling of key projects, which Secretary Moniz and Acting Administrator Held are wisely choosing, NNSA would fail further.

“With these changes, an important workload ‘gap’ or ‘breather’ begins to open up in the 2020s at the weapons labs.  We believe the weapons labs are even now greatly oversized for their missions, and today’s budget, with the changes noted, advances the possibility of a gradual downsizing of overall warhead effort, even without the stockpile shrinkage that is long overdue.

“In New Mexico, it is a big mistake to depend on Cold War weapons programs as a prop for our economy, let alone as a source of growth.  There just isn't going to be significant growth in those programs, ever, and eventually there will be decline in real terms.  Even when there has been growth, the record shows New Mexico has not benefitted as a result.  Nuclear weapons are an economic and political liability for the state, along with our severe inequality, poverty, and our poor educational outcomes.

“The plutonium industry, if it were to expand, would be particularly negative for Santa Fe and the region.

“Here in New Mexico we've got to focus on building a new economy that capitalizes on what is now very much a new environmental era.  There are tremendous business opportunities in this new economy, but we haven't yet seen government responding enough.  Government at all levels needs to open new markets for these high-growth, high-employment renewable energy businesses, and remove the few remaining financial barriers that stand in the way of what would otherwise be very sound new, climate-friendly, water-saving energy investments for businesses and households.  Energy-efficient urban and rural transportation are other big potential growth areas, in which we must invest in order to remain competitive.

“Today's federal budget shouldn't be looked at as a basis of growth as much as a maintenance program to keep us going while we build out our locally-owned new energy economy, with the educational system to support it.  We will prosper if we can set aside our political loyalties to “The Bomb” and make the new trends our friends.”

In the Study-Group-prepared graph below, the superimposed green line shows the effect of 1% inflation for FY14 and uses a 2% inflation model thereafter. Potential OGSI funding is not included.