Senate panel cuts more than $500 million from spy operations

More than $500 million would be cut from the CIA and other U.S. intelligence agencies under a bill authorizing programs and spending for spying operations next year, a key senator and congressional aides said.

The fiscal 2012 intelligence authorization bill would reduce intelligence spending by about 1 percent -- about $550 million -- from current spending levels, Senate Intelligence Chairwoman Dianne Feinstein, D-Calif., told National Journal.

Further cuts to intelligence spending beyond 2012 are likely under the debt and deficit-reduction bill passed by Congress and on Tuesday by President Obama-beginning in earnest a downturn in robust and unprecedented spending on intelligence activities following the September 11 terrorist attacks.

"We've been anticipating it and so we have been ratcheting down," Feinstein said. "The budget that we control according to public figures is $55 billion. That's a doubling from before 9/11. What we take [in 2012] is a 1 percent cut and that's a real cut over last year."

"It's significant because we're reversing a trend, which has been to go up, and now that trend is going to go down," she added.

The Senate Intelligence Committee authorizes funding for what's known as the National Intelligence Program, which funds the CIA and other non-military intelligence agencies. Congressional aides said the actual cut would be slightly more than 1 percent.

Intelligence Committee aides said the fiscal 2012 authorization bill recommends "substantial funding and personnel cuts" compared to the amount Obama requested. Aides added that the bill still would ensure "that the intelligence community has the necessary resources to conduct operations that are vital to our nation's security."

While Feinstein's panel recommends funding cuts, the actual money for intelligence agencies is allocated by the appropriations committees. Feinstein said she is coordinating with appropriators.

Total spending on intelligence activities tops $80 billion a year, when spending on military intelligence programs is taken into account. "Every one has to be willing to tighten their belts; the intelligence community is no exception," said an intelligence official who asked to remain anonymous.

The debt deal Obama signed into law lumps spending on the national intelligence community management account into a broad "security" category that includes spending on the Defense Department, Homeland Security Department, Veterans' Affairs Department, and other programs. That means the intelligence account will have to compete with the others for money under new spending caps.

"You can be sure we're going to be very careful with that and we're not going to incapacitate the agencies in any way, shape, or form," Feinstein said.

But her authorization bill faces a major hurdle, as Sen. Ron Wyden, D-Ore., said he will place a hold on it. Wyden told National Journal on Tuesday that he is concerned about a provision in the bill that would extend, until 2015, the government's authority to monitor e-mails or phone calls made by a U.S. citizen without a warrant.

Wyden wants the Obama administration to disclose the number of citizens who have had their communications reviewed by the government. For now, the administration says it is unable to provide such a number.

"What I feel strongly about is there needs to be some answers to some very important and directly relevant questions," Wyden said. "When we get the facts, then we can talk about the policy."

On another front, Obama on Tuesday nominated Charles McCullough to be inspector general of the U.S. intelligence community. McCullough is currently the deputy inspector general and has held positions at the National Security Agency, Treasury Department, and FBI.