By Colin Clark

President Barack Obama is expected to approve a new constellation of highly classified multi-billion dollar spy satellites in the next few days, injecting a major new expenditure into the Defense Department budget that was not planned when the administration began its budget deliberations.

The debate between the intelligence community and the military over this system has been particularly sharp. In the words of one Hill source familiar with the issue. “A deep path has been worn between the Pentagon on this one,” the source said.

Gates and Blair signed a classified memo approving the program on March 30, according to two sources familiar with the program. Details of the program are highly classified. A DNI spokesman had not responded by the time we posted this story but may provide details later.
However, we have obtained a few details in the meantime.

The system may cost $3.5 billion to get started, if earlier estimates are accurate. It may cost up to $10 billion, over the next five years depending on which technical approach was approved and on how many satellites will be built.

The Hill source said that the DNI and Pentagon would have great trouble paying for the system. “I don’t think they can come up with enough to pay for two-plus-two,” the source said, refusing to add any details.

This is what led to the decision to approve the new system. Blair commissioned a group, led by Paul Kaminski, former undersecretary of Defense for acquisition and technology, to tell him whether the US faces a capabilities gap as aging satellites die and the US continues to fail to put new ones into orbit. While there is vigorous disagreement within Congress, DoD and the intelligence community as to whether there really be a gap that needs to be filled, the official consensus seems to be that the country cannot afford the risk.

Kaminski and his panel, “basically said, we want everything, a robust constellation,” according to one source familiar with the discussions. In the coded language that the intelligence community uses dealing with people who aren’t cleared, this means that Blair is pushing an “exquisite” solution. And that means it’s a really technologically advanced satellite with big and expensive optics able to deliver the rarest and finest strategic intelligence to the president. “We are asking for the Rolex,” said our source. This source does not believe the country needs what the DNI wants: “We are chasing what we want, rather than what we need.”

A former government official with experience of space programs was sharply critical of the DNI’s approach: “The panel recommendations appear to be another triumph of over-the-top programs that seek performance beyond reasonable need. The costs are astronomical in terms of dollars, risk, and missed opportunities. Though I highly respect the panel members, at some point we should ask ourselves whether it’s wise to rely exclusively on ‘greybeards’ when considering the kind of changes required in this post-Cold War era.

All this echoes comments made recently by Marine Gen. James Cartwright, vice chairman of the Joint Chiefs of Staff, that the country does not need exquisite systems and Cartwright is a major player in the debate about what electro-optical satellites need building. For example, he was present when Gates was briefed.

The Pentagon and DNI are looking for money across all of DoD and the intelligence community. Pentagon funding will not come from the space budget (black or white). It may well total more than $10 billion across the POM. The decision on what to do is expected last, just before the Pentagon submits the budget in mid-May.

There may be one big flaw in the plan currently being considered: it completely ignores US policy that requires the government use commercial data whenever possible. A senior Defense Department official said the current constellation would not include any commercial satellites or any money to buy commercial data from the two American companies that have satellites in orbit.

DoDBuzz readers have known about this effort from the beginning when we broke the story about the failed effort by the last DNI, Mike McConnell, to try and stuff $3.5 billion into the recently passed financial rescue supplemental. The money would have gone to build at least one of these satellites. Some $300 million of it would have gone to buy commercial data on the side.

In the latest effort, Kaminski and his panel of so-called greybeards have briefed Blair and Gates. Kaminski spoke last week with the tiny coterie of Hill aides who determine intelligence spending and policy. Apparently, he told them little beyond how the process worked and the broad outlines of his plan. But the Hill aides, who have been very frustrated with the slow pace and uncertain course of both the Pentagon and intelligence community on the electro-optical constellation, reportedly told Kaminski they will support the way ahead as long as somebody actually takes a decision and does something.