U.S. Missile Defense Gets $400 Million as North Korea Threatens

(Bloomberg) -- Congressional defense committees have approved shifting more than $400 million from other accounts into missile defense programs to clear the way for more ground-based interceptors, sensors and upgrades to Navy anti-missile vessels in the face of threats led by North Korea.

Boeing Co., Raytheon Co. and Orbital ATK Inc. are likely to be the top beneficiaries. Defense Secretary Jim Mattis disclosed the approval Tuesday during a Senate hearing on Afghanistan. He said he requested approval to shift, or “reprogram,” unspent funds for fiscal 2017 totaling $440 million from accounts such as Army wartime operations and maintenance. A formal six-page request listed $416 million of the total.

The shift of funds reflects a growing determination at the Pentagon and in Congress to bolster missile defenses as North Korea vows to perfect nuclear missiles that can hit the U.S. mainland as well as allies in Asia. It may be the opening round in moves to seek more than the $9.9 billion requested by the Pentagon for the fiscal 2018 year that began on Oct. 1.

“We're going to be increasing our budget by many billions of dollars because of North Korea and other reasons,” President Donald Trump said in August.

The six-page request obtained by Bloomberg News cites the regime in Pyongyang as the rationale for adding $16 million to extend the life of a radar maintained by Raytheon known as “Cobra Dane, which provides critical coverage of North Korean threats.”

Defense Contractors

Raytheon also would benefit from an extra $13 million to accelerate “Baseline 9.2” upgrades for four Navy vessels to launch advanced Standard Missile-3 Block IIA anti-missile interceptors made by the company. The missile, being developed with Japan, is designed to intercept advanced medium and intermediate-range ballistic missiles.

Orbital ATK, which is being acquired by Northrop Grumman Corp., produces the booster rockets that carry Raytheon's hit-to-kill warheads. It stands to benefit from at least two categories of expenditures in the funding shift.

Boeing, which manages the U.S.'s primary grounded-based system, has purchased 44 ground-based interceptors from Orbital ATK.

The funding request shifts $47 million to start building 10 additional silos at Fort Greely in Alaska, which already has 32 missiles in the ground. “This includes materials, temperature control units, gas actuators” and electrical components, according to the request.

An additional $8 million is shifted to supplement the $219 million already budgeted to potentially increase the number of interceptors to 64 from the current 44; and $15 million would go to software upgrades to the Boeing-developed floating Sea-Based X-Band radar used to precisely track an intercontinental ballistic missile in mid-flight.

Defense reprogramming requests go into effect if they receive the approval of the House and Senate Armed Services and defense appropriations panels.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net.

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert, Justin Blum