Budgeting on a Napkin

, Washington representative and senior analyst | April 12, 2013, 9:19 pm EDT
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On Wednesday, the Obama administration released its FY2014 federal budget request, more than two months after the normal deadline. The reasons for the delay – uncertainty due to the Budget Control Act, the sequester, and the complications around them – are well known, but even in that light some of the information released was thin in the extreme.

This situation is even more disappointing when one considers that the budget request does not take into account the sequestration. The budget caps that were set in place when the Budget Control Act took effect have been ignored in this request. Exactly how they will be met is, at this point, entirely unclear. So, the request was delayed because of the sequester, but it does not take it into account.

Each department releases it owns budget. One in particular was, shall we say, brief. I attended the official budget release event for the Department of Energy and its semi-autonomous affiliate the National Nuclear Security Administration (NNSA). They handed out a budget document that, generously, one might call Cliffs Notes. Top-line figures were provided in comparison to previous years, and a brief description of most of the budget areas appears. But there is virtually no explanation for any of the changes that are made.

At the event, NNSA officials assured attendees that the information released by other agencies were equally thin. In fact, that is not the case. The Department of Defense, which has a budget many times larger than the NNSA’s, was able to release a far more detailed request (although still not taking into account sequestration).

For the DOE/NNSA,  more detailed numbers are available on-line for some programs and the DOE laboratories, but they provide almost nothing in the way of explanation.

Apparently, the Office of Management and Budget held up the NNSA’s more detailed documents (the Congressional Justifications, or CJs) because they were not satisfied with the agency’s numbers. NNSA officials say that their CJs will be released as early as today, Friday April 12, but that could slip until next week.

From what we can see, on its surface, the administration has prioritized maintaining the nuclear weapons stockpile over reducing the threat from the spread of nuclear weapons.

That is, in broad terms, the budget for maintaining the nuclear weapons stockpile has increased, while the budget for nonproliferation – those programs designed to prevent other countries or terrorists from obtaining a nuclear bomb or nuclear material – have decreased. We highlight just a few programs of interest below, including at the end what is possibly the best news out of the budget release. 

Cutting Funds to Lock Down Nuclear Materials

The budget for the Global Threat Reduction Initiative (GTRI) was reduced by roughly 16%, from $501 million to $424 million. It is the primary program to remove highly enriched uranium and plutonium from countries around the world and bring it to more secure storage or disposal.

When I questioned this cut, NNSA officials explained that they were reaching the end of the four-year effort launched by the Obama administration to lockdown nuclear materials globally. The money for that effort, they state, was actually front-loaded—that is, they spent more of it early on—and now the program is winding down.

What is missing from this is a clear picture of the size of the problem, how much has been accomplished and what remains to be done. In 2009, President Obama set the goal of securing all vulnerable nuclear material globally.  That morphed over time to securing the most vulnerable material, and certainly progress has been made toward that goal. Understandably reluctant to name sites that hold such vulnerable material, the NNSA normally provides only summary data of its progress. Of course, currently bereft of any detailed information, we don’t have a good sense of where things stand. But in the FY12 budget request, the NNSA painted a picture of progress it planned to achieve by 2016:

By the end of 2016, GTRI will have converted 129 (65 percent) of the 200 HEU reactors, removed 4,801 kilograms (100 percent) of the approximately 4,801 kilograms of vulnerable weapons usable nuclear material at civilian sites, and protected 2,607 (31 percent) of the estimated 8,500 buildings with high-priority nuclear and radiological materials. (emphasis added)

Moreover, in the same budget, the NNSA noted that it planned to request $637 million for GTRI in FY14; apparently the plan to scale back the program after four years was not yet in place.

So, we know both that the NNSA was planning activities through 2016 and that it planned funding increases, not reductions, just two years ago. Not quite the rosy picture one would like to have.

Pressing forward on the B61

In the little information available in the FY14 budget request, it is clear that the NNSA is moving ahead with the life extension program for the B61 gravity bomb to extend the life of this warhead by 20 years. As we have described before, the Pentagon’s cost assessment office found that the NNSA’s expectations for the B61 program were entirely too optimistic. Rather than a $6.5 billion program that would produce the first warhead by 2019, the DoD estimated that it would cost $10.4 billion to start production in 2022.

In any event, the NNSA is dramatically ramping up funding for the program, giving it a 45% boost from $369 million to $537 million. The sparse information in the new budget documents give no indication of a revised cost estimate or timeline from the NNSA, but the available track record on other major projects in the agency’s hands would indicate that the Pentagon’s estimate is probably more reliable.

The proposed life extension program is quite complicated. In the current active stockpile, some versions of the B61 are designed to go on fighter aircraft (“tactical” versions -3 and -4) and some on long-range bombers (“strategic” versions -7 and -11). Those versions that go through the LEP would emerge as B61-12s that would work on either type of aircraft. It is a major re-working of the warhead.

We believe that the NNSA should look at other, simpler options for the B61, in large part because there is a reasonable chance that the warhead will be withdrawn from service by the time the life extension program is finished. President Obama has already made clear he would like to pursue another arms control agreement with Moscow that will further reduce US and Russian nuclear arsenals, and that—for the first time—will include tactical weapons such as some versions of the B61..

The Senate, in giving its approval to the New START agreement, also demanded that the administration pursue an agreement to address tactical nuclear weapons, because Russia is reported to have a far larger stockpile of these weapons. (The United States has a far larger stockpile of non-deployed warheads, making each country’s total stockpile relatively equal.)

In that light, it does not make sense to spend as much as $10 billion to perform a complete overhaul of the B61. It is possible to significantly extend the life of the warhead without undertaking such a far-reaching approach. Congress should explore this idea and see if money could be saved while keeping our commitments to allies.

An End to MOX?

There is, however, one clear change in nonproliferation strategy that is very welcome. After years of strong support and encouraging words, the NNSA appears on the brink of deciding that its preferred method for disposition of surplus plutonium  is indeed the disaster we have long said it is.

This approach, the mixed oxide (MOX) fuel fabrication program, would take plutonium pits from dismantled nuclear warheads, convert the metal into oxide form, blend it with uranium oxide and fabricate it into fuel for commercial nuclear reactors, The plutonium would end up in large, heavy radioactive spent fuel bundles, reducing its attractiveness to terrorist theft. But prior to that end state, the plutonium would be rendered more vulnerable to theft.  After years of massive cost overruns and delays, NNSA has finally decided to significantly slow down the program intentionally while it considers other alternatives.

Unfortunately, the NNSA has already spent some $3.4 billion on the MOX facility, creating a large concrete box at the Savannah River Site in South Carolina. Another $1.7 billion has been spent on related facilities and programs, including one—the Pit Disassembly and Conversion Facility—that has been abandoned already.

The good news is that there is an alternative that would likely be cheaper and poses less of a security risk than the MOX program. It is immobilization, in which the surplus plutonium is mixed with existing highly-radioactive nuclear waste and embedded in a large, heavy glass log. This approach achieves the same strategic goal as MOX (putting it in a radioactive and very inconvenient form that is unattractive to terrorists) without shipping weapons-usable plutonium to commercial sites that are not equipped to handle such material.

At the budget event, NNSA officials told us that construction of the MOX program would be slowed significantly while the agency considered other options, presumably including immobilization. The cut in the MOX construction budget is significant, from $438 million to $320 million, a 27% cut, but the budget still represents a substantial investment in the program.

My colleague Ed Lyman was able to ascertain from NNSA officials that the construction on the plant had not proceeded so far as to install critical equipment like glove boxes to handle the nuclear material, which is fortunate because a GAO investigation revealed that the design of this equipment has been inadequate. This means that it might be easier to reuse the existing reinforced concrete box for other, more useful purposes, without wasting additional money.

If, for a change, things work out as they should, the NNSA will abandon the MOX program and shift to an immobilization approach that will save money while safely reducing the nuclear threat. It may take a while, but the signs at the moment are encouraging.

 

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