With its proposed Department of Defense budget for 2011, the Obama administration explicitly states that it wants to reform how the US agency operates – how it takes care of its people, how it enhances capabilities for current and future conflicts, how it supports troops in the field and how it does business. And because the department deals with a wide range of photonics technologies and companies, just how the DoD does business – how it buys, what it buys and how it supports research and development – has a strong impact on our industry. The overall figure for the 2011 DoD budget is $708.2 billion, with $548.9 billion intended for the base budget and $159.3 billion for overseas contingency operations; these are the ongoing operations in Afghanistan and Iraq. The base budget amount for 2011 is $18.2 billion higher than the 2010 enacted amount, which was $530.7 billion. So the 2011 base budget reflects a 3.4 percent increase, or 1.8 percent after adjustment for inflation. That base budget covers not only personnel, family housing, military operations and construction, but also the photonics industry’s interests: technology procurement, R&D, testing and maintenance. At $137.48 billion, the 2011 procurement budget is up, just barely, over that of 2010, which was $136.06 billion. Although this is only a 1.05 percent increase, it’s better than the cuts that can be seen in the 2011 R&D, evaluation and testing (RDT&E) budget. In that proposal, spending will be down to $76.77 billion, 5.13 percent less than 2010’s $80.92 billion. For the military’s combined procurement and RDT&E budget for communications, telecom, electronics and intelligence technologies, a total of $17.45 billion has been set aside, an increase of 3.2 percent over 2010’s amount, which was $16.9 billion as enacted by Congress. One program that has kept its funding is the Airborne Laser (ABL), which is transitioning to the Missile Defense Agency’s Directed Energy Research Program. The ABL aircraft will be used for the National Laser Test Program (NLTP), according to the proposed budget, and the NLTP will provide a venue for demonstration of other integrated laser weapons systems. Those are a lot of numbers to ponder, but the upshot is that, although cuts have been proposed for the DoD’s tech budget, there also are increases. The increases might not be as large as our industry needs, but they will help to encourage some growth in photonics. And the cuts are not as severe as some had predicted or feared. On page 40 of this month’s issue, editor Hank Hogan looks at some recent innovations in sensors, displays, digital processing and more that will allow military imaging systems to not only catch but also display critical information that cannot be captured or revealed with today’s technology.