Two influential analysts told lawmakers on Capitol Hill this week that America’s strategic position in the world is eroding. America is losing its technological edge and is in deep financial trouble, while purchasing power is shifting from the West to Asia. Those trends cannot be undone, they warned, so the U.S. must adapt and seek greater cooperation with allies and establish “rules of the road” with potential rivals.

Defense Secretary Robert Gates and Director of National Intelligence Dennis Blair should sign by Dec. 1 a document laying out new responsibilities for the National Reconnaissance Office, builder and operator of America’s spy satellites. This will set in motion the first substantial changes to the NRO charter since 1965, four years after then-Defense Secretary Robert McNamara created the NRO and drafted its charter.

The American battle for Sadr City in 2008 and the Israeli war in Gaza later that year are being held up as models for future fights against irregular opponents. We take a look at some of the key lessons learned from both operations as well as an important factor that may limit where they can be replicated.

The man at the pointy end of the spear of missile defense and of nuclear weapons warned today that the US must carefully weigh any increase in missile defense — particularly on the West Coast — to avoid triggering a “destabilizing” reaction by the Peoples Republic of China. “We have to be cautious about missile defense…[which] can be destabilizing if you are not careful,” said Air Force Gen. Kevin Chilton, commander of Strategic Command and one of the military’s brightest brains. When the US places anti-ballistic missile assets on the West Coast, “What does it make the Chinese think…?” he asked.

When Senators Carl Levin and John McCain drew up the Weapons Systems Acquisition Reform Act, it’s hard to believe they knew they would help reshape an industry. But that is exactly what is happening as a result of the conflict of interest provisions written into the bill. Proof of that came this weekend with Northrop Grumman’s announcement that it was unloading its TASC unit and selling it for $1.65 billion in cash to an investor group.

In what appears to mark a major shift in Chinese military and arms control strategy, the head of the PRC’s air force has said in an official interview that military operations in space are an “historical inevitability.” General Xu Qiliang said that, “As far as the revolution in military affairs is concerned, the competition between military forces is moving towards outer space… this is a historical inevitability and a development that cannot be turned back.”

During the days of the Cold War, intelligence analysts tracked Soviet missile deployments and launches, as well as mass maneuvers, using the technological wonders of change detection, the arcane art of looking at satellite and U-2 photos to see what had moved where and how fast they were moving. Now Northrop Grumman is developing a fast, broad-area radar that may give analysts better tools to work with.

In what could mark a major improvement to the nation’s ability to defend itself against cyber threats, the Department of Homeland Security will announce Friday that the US Computer Emergency Readiness Team will merge with the National Coordinating Center for Telecommunications. The two groups — now separated by two floors — will now be co-located and will operate jointly.

In a world where the barriers to nuclear weapons proliferation are breaking down, military planners must prepare to fight on the battlefield one day after a nuclear explosion in a radioactive environment facing the prospect of second nuclear strike. This scenario is so complex and so costly that it renders obsolete many basic tenets of U.S. military power projection, says CSBA in a new report.

In a rare public appearance, Gen. Xu Caihou, vice chairman of China’s Communist Party’s Central Military Commission, came to Washington and told an audience that his country remains a “developing country and would not, could not threaten developed countries.” In fact, the PRC seeks “accommodation, not confrontation.”

In his first public appearance, the director of the National Reconnaissance Office pledged to deliver the nation’s spy satellites on time and on budget after almost a decade of botched programs such as the Future Imagery Architecture.

For decades America’s spies cultivated the idea that they knew things no one else did and got the information from sources no one else knew about. Then came 911 and the rules got rewritten as the veil got torn from the intelligence community’s shoulders. Open source information — stuff anyone with a brain and a healthy interest in finding something out — is now a key tool for our spies. And its use is rocketing upwards.

The Pentagon created a team one month ago and sent it to Iraq and Afghanistan to figure out how to achieve the Holy Grail of intelligence sharing, one network architecture that shares intelligence from every satellite, UAV and plane and gets it to everyone on the ground and in the air who needs it.

The United States has much to gain and lilttle to lose in sharing much more intelligence with our allies, said the Pentagon’s head of intelligence. “There is very little risk in being more open with sharing,” said Jim Clapper, undersecretary of Defense for intelligence, at the annual Geoint conference.

The Senate wants to build an unproven but technologically attractive reconnaissance spy satellite said to be relatively cheap. The House wants to build a technologically proven but more expensive spy satellite. So far, at least, they can’t agree on which one strikes the best balance between risk, cost and capability. And they may not be able to agree given how divergent their solutions are.

The nation that made it to the Moon in 12 years now struggles to build a satellite in that time and is at risk of losing its preeminence in space. So said one of the top four space intelligence lawmakers on Capitol Hill, Rep. Dutch Ruppersberger, chairman of the House Select technical and tactical intelligence subcommittee.

The debate on the way ahead in Afghanistan continues, with the lines drawn between those who advocate a small footprint counterterrorism straegy versus advocates of the large footprint counterinsurgency approach. Former Afghanistan CIA case officer and counterterrorism adviser Marc Sageman makes a reasoned argument for continuing the counterterror approach and says that even if the Taliban were to regain power in Afghanistan, it is far from certain it would allow al Qaeda free reign there.

With the Senate likely to vote next week on the defense authorization bill, concern is growing that one or more senators may filibuster the bill to make clear their displeasure or unease with hate crimes legislation that was attached to the bill.

Three of Washington’s top experts on the Afghanistan-Pakistan troubles appeared before the House Armed Services Committee and appeared as divided as the rest of the country is on just what to do next.

Iran has reached a “level of progress” where it is “conceivable” that it could build a nuclear device as early as this year and could field a nuclear armed missile force some time between 2011 and 2015, says CSIS’s Anthony Cordesman in a new book. The “cumulative weight of evidence” has grown so large that it’s difficult not to conclude that Iran is building nuclear warheads to put atop long range missiles, he says.