Second release, 4/10/13
Administration requests large increase in nuclear warhead spending

Construction of $7.7 billion plutonium reactor fuel factory in SC to be slowed to cover increased warhead costs, proposed uranium warhead factory in TN

The Administration and Congress do not see the scope of their political and management failures vis-à-vis NNSA, which mightily increase the warhead budget.

Contact: Greg Mello, 505-265-1200 office, 505-577-8653 cell

Albuquerque – As predicted yesterday the Obama Administration has proposed (pdf) a very large (7.5%) year-on-year increase in nuclear “Weapons Activities” for fiscal year (FY) 2014 within the Department of Energy’s (DOE’s) National Nuclear Security Administration (NNSA) budget.
 
The naked impact of the proposed $567 million (M) spending increase has been blunted by moving two counterterrorism programs totaling $256 M to another account (Defense Nuclear Nonproliferation), lowering the Weapons Activities increase to $311 M (4.1%).

Had this not been done it would have been the first time in U.S. history that spending on nuclear weapon design, testing, and production broached the $8 billion mark.

Even so, Obama’s proposed five-year spending plan aims at constant-dollar spending at the nuclear labs and weapons plants equal to the highest level of the Cold War, which occurred under President Reagan in 1985.  Essentially the same spending level was briefly reached under President G. W. Bush as well.  (See attached figures, below.)

Today’s request, by Nobel Peace Laureate Barack Obama, is one of the largest nuclear weapons spending increases in U.S. history, and it comes at a time when the President is also requesting unprecedented cuts in the nation’s social insurance programs.

For our initial comments on this budget request please see yesterday’s Bulletin (Bulletin #168: Obama administration to request major increase in NNSA Nuclear weapons spending, Apr 9, 2013).

The Nuclear Weapons and Materials Monitor is reporting this afternoon that the complete budget request will not be released until Friday.  It is already more than two months late.

Current-year spending will be depressed by 7.8% due to the sequester mandated by the Budget Control Act (BCA), assuming it continues.  We do not know how BCA spending caps will end up affecting FY2014 budgets.  If this year’s sequester remains in place, and this budget is passed and remains intact, the resulting 15.3% increase in warhead spending will be unprecedented. 

Today’s request for Defense Nuclear Nonproliferation is 11% ($270 M) lower than the current funded level, again not counting the effect of the sequester.  Without the above program transfer, this decline would be a very steep 21.7% ($523 M).

The year-on-year decline in requested nonproliferation funding is partly due to a proposed $205 M cut in the plutonium disposition program.  The massive ($7.7 billion) Mixed Oxide [MOX] Fuel Fabrication Facility (MFFF) under construction at the Savannah River Site (SRS) in South Carolina will be intentionally slowed in this plan.  The savings, along with savings gleaned elsewhere and funding transfers from DoD, are to be fed into cost overruns in warhead upgrade projects and into the very expensive Uranium Processing Facility (UPF) project at the Y-12 plant in Tennessee.

Modest cutbacks at the National Ignition Facility (NIF) and in warhead-related supercomputers are also shown in this morning’s budget summary.

The Department of Energy budget overview describes the MOX program cut:

To dispose of U.S. plutonium, the program has been building the Mixed Oxide (MOX) Fuel Fabrication Facility, which would enable the Department of Energy to dispose of plutonium by converting it into MOX fuel and burning it in commercial nuclear reactors.  This approach may be unaffordable, though, due to cost growth and fiscal pressure. While the Administration will assess the feasibility of alternative plutonium disposition strategies, result-ing in a slowdown of MOX Fuel Fabrication Facility construction in 2014, it is nonetheless committed to the overarching goals of the plutonium disposition program to: 1) dispose of excess U.S. plutonium; and 2) achieve Russian disposition of equal quantities of plutonium.

Study Group director Greg Mello:

“This proposed budget reflects bad management, bad priorities for the nation, and a lack of political courage and even savvy on the part of the President, his Party, and his appointees.  There are good people in the White House and NNSA, but they are not sufficiently empowered or motivated to cut through the greed and just plain nonsense that inflates this budget.  It is a real disappointment, a travesty of management and policy.

“Overall, NNSA makes its management job a good deal harder than it needs to be.  It does this in many ways, for example by enlarging its program far beyond what is actually needed, and doing so prior to any defensible idea of what the work will really cost.

“Then the agency places itself in a terribly weak position vis-à-vis its contractors, who do essentially all the work and control nearly all the information.

“NNSA really does a terrible job at cutting costs in any number of ways.  They pay too much per contractor employee, for starters.  And there are far too many employees at the three biggest sites, which are the nuclear weapons labs, which dissipate about half of NNSA’s warhead money on gold-plated salaries and projects, many of which aren’t necessary.  There are literally thousands of people at these labs compensated at more than $200,000 per year.  The typical pay for a cabinet secretary is only a little more than that, and that should be the absolute top.

“Nuclear weapons should not be a for-profit business, as the National Academy of Public Administration recently said.  NNSA could save hundreds of millions annually in fees, gross receipts taxes, and pension bailouts.  With clearer, stronger direction from the top, NNSA could save a lot of money without any significant change in nuclear policy.

“But what about policy?  Would our geopolitical "adversaries" or "friends" care, or even notice, if we all woke up tomorrow and nine-tenths of U.S. nuclear weapons had were in the retirement queue?  I think not.

“When the massive bill for renewing nuclear delivery systems starts coming due in earnest, congressional minds will focus.  The result will be disarmament, to a greater degree than those who today repeat nuclear mantras can imagine.
“We have a crisis at hand, worse than World War II, in which no nuclear weapon is relevant.  The world faces a combined economic, resource, and climate catastrophe, the likes of which humanity has never before seen.  We have to cut back now on our absurd and tragic Empire and invest in our economy, our families, our communities, and protect the environment and climate which sustain us.

In the FY2014 budget request available so far (5:00 pm 4/10/13 MDT), NNSA apparently combines the proposed budgets for Y-12 and Pantex into that of the NNSA Production Office, located within the budget line for Oak Ridge National Laboratory (ORNL).  This chart assumes this is the case and therefore shows the Y-12 and Pantex budgets falling to zero in FY2014, replaced by the NNSA production office in that year.

The implicit 3-year trend in the NNSA Production Office is shown for FY2012-FY2014.  For FY2012 and FY2013, this is just the sum of the Y-12 and Pantex budgets, which are also shown for those two years.

The rise of the three labs from the Weapons Activities (WA) funding nadir of 1995 is sharply illustrated.  The two New Mexico labs have enjoyed a clear budget advantage in WA over all other sites for the last couple of years, when LLNL’s WA funding began to slip.  The New Mexico labs recently traded places at the top of the rankings. In the NNSA request SNL continues its nominal WA growth, albeit at a slower pace.  LANL’s two year fiscal slide is reversed.   The following chart shows the same data in constant March 2013 dollars.  Again, this is WA only, the core mission at these sites.