OVERNIGHT DEFENSE: Industry presents ‘optimistic’ outlook on sequester

The countdown clock to the day sequestration hits was just one way that the AIA event — full of reporters and industry officials — was different from prior years.

Blakey has given six speeches now as head of the AIA, but her typical focus on numbers and graphs was replaced with a more political speech on why sequestration should be stopped (there were still some graphs).

Blakey was critical of Washington as a whole for even making sequestration a possibility, a reminder that AIA has been fighting it since the policy became a possibility in the debt-limit deal last August.

“The fact that the world’s arsenal of democracy has been relegated to the status of a political bargaining chip is difficult to fathom,” Blakey said.

Still, the defense industry faces an uphill battle to avoid further cuts amid fiscal cliff negotiations that have focused mostly on taxes and entitlements, a reality that defense-minded lawmakers and some industry leaders have begun to acknowledge publicly.

The Pentagon is (officially) planning for it, too: Well, it was inevitable. 

With less than a month before $500 billion in automatic budget cuts come barreling down on the Pentagon, the White House finally ordered DOD to begin preparing for the worst. 

DOD press secretary George Little announced on Wednesday that the Office of Management and Budget had given the Pentagon's cadre of number crunchers the green light to start planning for sequestration. 

While behind closed doors, it was widely assumed that DOD was already wargaming the impact sequestration could have on its bottom line, given the military's penchant for planning and pre-planning for any given situation. 

But Wednesday's announcement officially let the department loose to prepare for the tremendous fiscal pressure coming from across the Potomac via sequestration. That said, Little assured reporters at the Pentagon the move was not akin to putting the department at DEFCON 5 regarding sequestration. 

“We don’t have all the specifics yet,” Little said during Wednesday's briefing. "This really just has begun. We don’t have specifics on programs or personnel actions." 

But that veneer of calm could give way to panic, as the clock continues to tick away toward Jan. 2, which is when the defense cuts under sequestration are set to go into place. 

With congressional negotiations moving at a snail's pace, we will have to see if the Pentagon and White House end up calling all hands on deck to keep the department's fiscal boat from going under. 

Blacklisted: Since the beginning of the 18-month civil war between Syrian rebels and forces loyal to President Bashar Assad, the Pentagon has been concerned about possible al Qaeda influence within the rebel movement. 

Those fears may have been realized when U.S. officials on Wednesday announced the White House was considering placing factions of Syria's rebels onto the State Department's terror watch list. 

At the top of that list is Jabhat al-Nusra, a known al Qaeda affiliate that has been carrying out strikes against Assad's forces with the support of Turkish forces near the northern Syrian city of Aleppo, according to recent reports. 

If listed, the group would join current residents on the terror list, including al Qaeda and the Haqqani Network, and be officially labeled as enemies of the state. 

The growing influence by al Qaeda and other radical Islamic groups fighting alongside Syria's rebels is one of the main reasons why Washington has been hesitant to supply arms directly to rebel forces. 

In October, a classified U.S. review found the majority of small arms and munitions already sent to Syrian rebels by Arab nations has fallen into the hands of terror groups such as Jabhat al-Nusra and others. 

Those reports in October coincided with news that formerly disparate groups of al Qaeda militants operating in Syria are now coordinating themselves into functional terror cells. 

That type of consolidation among al Qaeda forces in the country could lead to the growth of al Qaeda faction in Syria, akin to those headquartered in Yemen, Africa and Iraq, according to U.S. intelligence. 

Michaud named top Dem on Veterans Affairs: Rep. Mike Michaud (D-Maine) is replacing Rep. Bob Filner (D-Calif.) on the House Veterans Affairs Committee.

Michaud was chosen Wednesday by the Democratic Steering Committee, and will immediately replace Filner, who was elected mayor of San Diego and resigned from the House.

Rep. Adam SmithAdam SmithHouse passes fix to defense bill's medical approval provision GOP chairman 'increasingly' concerned about using old war authorization House passes 2B defense policy bill MORE (D-Wash.) retained his spot as ranking member of the House Armed Services Committee, and the Appropriations Committee has not yet chosen who will replace retiring Rep. Norm Dicks (D-Wash.) as top Democrats on the Defense subcommittee.

FBI investigating hacker attack on Mullen: The FBI is investigating an attack by foreign hackers on retired Adm. Mike Mullen's personal computers, The Wall Street Journal reports. Mullen is the former chairman of the Joint Chiefs of Staff. Early evidence suggests the hacker attack stems from China, an offical told the WSJ.

— Jennifer Martinez contributed.

In Case You Missed It:

— White House weighs Syrian rebel sanctions

— AIA predicts $6 billion aerospace growth

— Pentagon considers air support in Mali

— Iran claims ‘evidence’ of US drone

Please send tips and comments to Jeremy Herb, jherb@thehill.com, and Carlo Muñoz, cmunoz@thehill.com.

Follow us on Twitter: @DEFCONHill, @JHerbTheHill, @CMunozTheHill

You can sign up to receive this overnight update via email on The Hill’s homepage.