Defense Budget Spelled Out

Highlights include Lockheed Martin Corp. (LMT - Analyst Report), The Boeing Co. (BA - Analyst Report) and Northrop Grumman Corp. (NOC - Analyst Report).

Thursday, Congress received a Defense expenditure request of $663.8 billion for fiscal year 2010 in two parts: a baseline budget of $533.8 billion, which is 4.0% higher (2.1% in constant dollars) than the 2009 baseline budget of $513.3 billion, plus a $130 billion kicker to cover ongoing military operations (Afghanistan, Iraq and, perhaps, other interesting places).

This proposed budget would terminate both Lockheed Martin's (LMT - Analyst Report) F-22 fighter at 187 shipsets as well as Boeing's (BA - Analyst Report) C-17 transport at 205 shipsets. On the other hand, the next chapter of the "Northrop Grumman (NOC - Analyst Report)/EADS versus Boeing for the tanker" saga is written in ink for all to see.

Of course, this request has to now wind its way through the system, which could make for some stimulating sessions on The Hill, as Congressmen/women fight to support their local defense contractor. In many ways, this is deja vu all over again.

It is interesting, however, that the current Secretary of Defense wants us to finally prepare for the wars currently in progress. Better late than never!