A Military and Intelligence Clash Over Spy Satellites

The nation’s spies and its military commanders are at odds over the future of America’s spy satellites, a divide that could determine whether the United States government will increasingly rely on its own eyes in the sky or on less costly commercial technology. The fight is shaping up into the intelligence world’s version of the United States Postal Service versus FedEx — a traditional government institution that must provide comprehensive services versus a more nimble private sector that is cherry-picking the most lucrative business opportunities. The Obama Administration has proposed cutting the contracts for commercial satellite imagery in half next year — to about $250 million from $540 million — to help meet deficit reduction requirements, while bringing back more of the work inside the government, according to administration and Congressional officials and industry experts.