Five years ago, when word began filtering out about Lockheed Martin's (NYSE: LMT ) new F-35 fighter jet potentially costing taxpayers $440 billion, people were shocked. More recent revelations that the plane could conceivably cost as much as $1.1 trillion left taxpayers dumbfounded.
Well, if you were one of those upset about the cost of the F-35 program, you'd probably better sit down for this next bit: The Pentagon's working up a weapons program now that could cost twice as much as the F-35.
Defense spending goes nuclear
That's the upshot of a new report out of the nonpartisan Congressional Budget Office, which this week estimated that upgrades and expansions to the U.S. nuclear arsenal could cost as much as $355 billion over the next 10 years.
Now, the math here is somewhat tricky, so bear with me for a moment. At first glance, the F-35 program's sticker price -- $1.1 trillion -- looks like a bigger number than the nuclear upgrades cost of $355 billion. But notice: The nuke upgrade spending will take place over a 10-year span, from 2014 to 2023. In contrast, the F-35's trillion-dollar cost will be spread over 60 years of service.
So per year, the numbers work like this: Nukes -- $35.5 billion per year. F-35s -- closer to $18.3 billion .... or roughly half the anticipated annual cost of spending on America's nuclear arsenal.
And what do we get for that?
Spending on America's nuclear deterrent will be spread out among multiple nuclear "delivery" systems, from nuclear ballistic missile submarines ("boomers") to long-range bomber aircraft -- to the silo-based ICBMs, whose upgrades could begin any moment now, if the contract that GenCorp (NYSE: AJRD ) won earlier this month works out as planned.
According to CBO, all three of these delivery systems are in need of upgrading, modernization, or replacement with newer systems such as next-gen cruise and ballistic missiles. An anticipated purchase of 100 new "Long-Range Strike-Bombers" could cost taxpayers perhaps $55 billion all on its own, and generate $55 billion in revenues for the defense contractors vying to build it. (At last report, each of Lockheed, Boeing (NYSE: BA ) , and Northrop Grumman (NYSE: NOC ) were planning to bid -- so at least all this spending is good news for someone.)
CBO anticipates that funds will also need to be spent on:
- Maintaining the nuclear warheads themselves.
- Nuclear reactors that power the boomers.
- Department of Energy nuclear weapons programs.
- The command and control and communications systems, and early warning systems, that weave together all the disparate threads of America's nuclear deterrent.
Then there's the cost of cleaning up nuclear contamination and disposal of waste, funds for nuclear non-proliferation activities, and security at nuclear sites. Finally, in the interests of being thorough, CBO adds an additional $59 billion to its estimates, to account for likely cost overruns on any or all of these programs.
It all adds up to a massive Pentagon spending program -- that's twice as big as the F-35.
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