New `Space Force' Would Add to Already Stretched Defense Budget

(Bloomberg) -- President Donald Trump’s push to establish a sixth military branch dedicated to space would probably be a lot more expensive than just extending the U.S. Air Force’s capabilities -- and no doubt the nation’s largest defense contractors love that idea.

Boeing Co., Lockheed Martin Corp., Northrop Grumman Corp. and Raytheon Co. stand to gain more business from a new branch, said George Ferguson, a senior defense analyst with Bloomberg Intelligence. Spending would probably include “communication/GPS/surveillance satellites and the ability to protect ours, degrade others, launch and build satellites,” Ferguson wrote in an email.

But those companies shouldn’t get too excited yet. Any future “Space Force” spending would be modest given that it would need to compete with other big, politically protected Defense Department priorities Congress already funds. “We don’t have numbers behind how much value, but are sure it will still be less than the large programs,” such as the F-35 fighter jet, the Navy Virginia class submarines and Air Force B-21 Raider bomber, Ferguson said.

The Air Force has argued that space defense is well within its purview, and that a new branch not only isn’t necessary, but could dilute current efforts to extend American military might into space.

The idea for an independent effort dates to early 2017 when House members led by Representative Mike Rogers, an Alabama Republican, began a new round of advocacy for what they called a separate “space corps.” The commander-in-chief first broached the idea in March, calling it a “Space Force,” while addressing service members in California.

Investors weren’t much motivated by Trump’s comments: Raytheon and Northrop Grumman both rose less than 1 percent, while Lockheed and Boeing fell less than 1 percent in New York.

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