NASHVILLE, Tenn. — A panel of government officials here painted a gloomy picture of the years ahead for the U.S. defense and intelligence budgets and emphasized the government-commercial partnership will be integral in that time even though the extent of that relationship is still very much to be determined.

Underpinning the broader discussion was the raging debate over the Pentagon’s desire to build commercial-class imaging satellites for defense and intelligence users, a plan that many see as counter to existing presidential policy and an inefficient use of government money. A panel of congressional staff members and an intelligence official discussed national security issues and the relationship between government and industry at the Geoint 2008 conference here Oct. 28.

Historically, peaks in defense and intelligence spending associated with times of conflict have been followed by periods of significant decline such as the 1930s, mid-1940s, late-1970s and mid-1990s, said Gil Klinger, assistant deputy director of national intelligence for architecture, engineering and integration. A contraction of defense spending was likely even before the
United States
‘ current economic crisis took center stage, and the government’s planned $700 billion bailout of
financial institutions has made it a certainty, Klinger said. This environment will place a premium on collaboration and creativity, and more heavily punish territoriality.

“The only variables in that historical pattern are the duration and depth of the decline,” Klinger said. “We are at the cusp of that cycle. That [$700 billion bailout] figure is likely to remove the discretion from discretionary spending accounts in the federal budget, including the defense and intelligence budgets.”

Matt Pollard, a staff member on the Senate Select Committee on Intelligence, echoed those sentiments, saying scarcity is a concept the
United States
is relatively unfamiliar with. He said a contraction of defense and intelligence budgets is coming, and decisions that are made today will affect the nation for decades.

“My committee’s concern is fiscal responsibility,” Pollard said. “I do believe a budget crunch is coming. We can either try to get ahead of it, or we can have it force us into some very ugly decisions.”

Geospatial intelligence is a growth industry, but tough fiscal and economic times may dictate that other types of intelligence take priority and receive more money, Pollard said. “We need to make sure every dime counts. Financial management means realistic cost assessments. It means holding agencies and contractors to those assessments. I would center my discussion to you today on smart expenditures of every dollar, because they’re only going to get scarcer.”

Pollard said the role commercial imagery will play in the
United States
‘ future collection architecture is still to be determined.

“The reality is we just don’t know yet. They bring tremendous tools, but there are real concerns about how they will be in play. It’s a major change we need to work through.”

Speaking on a subsequent panel, Mark Berkowitz, Lockheed Martin vice president for situational awareness, agreed the
United States
is at a crucial and formative crossroads. He said while the nation has unrivaled high-end remote sensing capabilities and wealth of low-end imaging capability in the Landsat program, it must reclaim the territory in between. He said the next presidential administration faces no less a choice than whether it will maintain U.S leadership in cutting edge space technology.

Berkowitz also said tentative
government plans to procure a pair of commercial-class imaging satellites is in direct contravention to the commercial remote sensing policy that he had a hand in drafting as a Defense Department official prior to joining Lockheed Martin in 2003. He said the government should be concentrating its resources on developing highly sophisticated intelligence gathering systems for which there is no commercial market.

William Schuster, chief operating officer of commercial imaging satellite operator GeoEye, said restrictive policies governing his industry have put other countries in the lead in some technology areas. He noted that the Pentagon is contemplating procuring radar satellite systems and data from foreign countries because government restrictions have prevented
companies from deploying similar capabilities commercially. He warned the government not to make the same mistake in the area of electro-optical satellite technology, where
companies enjoy the lead commercially.

The upside of challenging environments such as this is that they can lead to great advances in technology, Klinger said.

“We are at the cusp of a revolution in geospatial capabilities, and the only questions are how fast are we going to make use of them, who’s going to use them first and what are the appropriate roles and missions for the U.S. government and industry and our allies,” he said.