Pentagon budget: top 3 winners and losers

In Pentagon parlance, the word “cut” is a relative term. The Defense Department’s base budget decreases from $553 billion this year to $525 billion in 2013, but it rebounds steadily to $567 billion in 2017. With this in mind, here are the top three winners and losers:

Loser No. 2: enemy hackers

Rick Wilking/REUTERS/File
The Air Force Space Command Network Operations & Security Center at Peterson Air Force Base in Colorado Springs, Colo., is seen as a model for how power grids, communications, water utilities, financial networks should be shielded from cyberattack.

In Panetta’s remarks and in Pentagon budget preview documents, one common theme involved warnings of the threat of cyberwarfare – and questions about whether the Pentagon can handle sophisticated cyberattacks.

As a result, the Pentagon is pumping more money into cyberoperations. In a rare disclosure about what is considered a highly secretive endeavor, Pentagon officials emphasized that this would include “both defensive and offensive capabilities.”

Indeed, Panetta has warned frequently of a cyber “Pearl Harbor” and Thursday he called the threat of cyberattack one of “the most lethal and disruptive threats of the future.”

The Defense secretary cited the perils, too, involved in not pioneering cutting-edge technological advances. “We’re depending a great deal on being at the technological edge of the future,” Panetta said. “We even have to leap forward if we’re going to deal with the kind of challenges we’re going to face. We’ve got to be smart enough, innovative enough, creative enough to be able to leap forward. Can we do that? Can we develop the kind of technology we’re going to need to confront the future?”

That remains to be seen, say many analysts, who add that the answer depends on America’s ability to fight off cyberattacks that may face America’s electrical grid, its banking system, and the communications systems of US military assets on the battlefield.

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