Last week President Dmitry Medvedev met with American foreign policy veterans including former U.S. Secretary of State Henry Kissinger who champion better U.S.-Russian relations, and positively assessed the Obama Administration’s latest moves. Medvedev said resetting the U.S.-Russian relationship should not be limited to words but should extend to practical deeds.

Clearly, Moscow cannot help but enjoy the proposals initiated by the former and present-day U.S. opportunists to revisit the missile defense plans for the Czech Republic and Poland, to freeze the process of the NATO accession for Ukraine and Georgia, and to develop new European security architecture with Russia’s suggestions factored in. Moscow finds appealing other recommendations to Washington initiated by former senators Hart and Hagel – to show maximum restraint in criticizing Russia’s domestic policy and human rights record and actually recognize the former Soviet space as an area of Russia’s special interest.

The Kremlin, however, has yet to meet Washington halfway. Furthermore, as President Medvedev’s speech at the Defense Ministry Collegium implies, Russia is sending America a signal of having every intention to solidify its military potential, primarily its strategic component. In the framework of the massive military rearmament scheduled for 2011 there are plans to adopt for service new ground-based ICBMs Topol-M and make operational new nuclear submarines armed with Bulava ballistic missiles.

At the backdrop of the Obama Administration’s broadly discussed plans to freeze missile defenses in Europe Russia’s strategic buildup could be interpreted as a direct challenge to the United States.

However, Moscow’s expert community are inclined to think that Medvedev’s latest military rearmament statements are designed to target domestic rather than foreign audience. The Russian military are deeply concerned over the present-day military reform that would bring about dramatic cuts in officer strength and eliminate the institution of warrant officers and ensigns. Amid the economic downturn, these cuts could have a negative effect on most servicemen’s social standing, since problems with providing housing and jobs for them are bound to emerge.

As for the defense-industrial complex, it is deeply concerned that crisis-induced appropriations cuts could undermine the funding of state defense orders and bring about the closures of a number of large defense enterprises – also with serious socio-political fallout in terms of unemployment and a dramatic slide in household incomes.

Thus, Medvedev’s Defense Ministry speech was clearly called to assuage both the military and the defense-industrial complex and reiterate the incumbent regime’s allegiance to the all-round support of the state’s military component.

At the same time, it arouses certain doubts that Medvedev will meet his far-reaching pledges to the armed forces and the defense-industrial complex. The plans he has advanced are ill-adjusted to the government’s earlier military programs, including the current one slated to run until 2015. Some parts of Medvedev’s statement are raising questions even now. For example, the status of the Bulava submarine-based strategic missiles Moscow has pinned such huge hopes on, is yet unclear. Only five out of its ten tests have been successful. It has yet to be clarified whether it was accidental or proof of significant technological defects.

Bitter debate is raging in the Russian government over the inevitable budget cuts on account of a painful economic meltdown. So far, the Russian government has been adamantly against cutting social spending owning to a possible souring of the socio-political conditions in the country. Meanwhile, it is focusing on lower non-social spending. The Finance Ministry’s project submitted to the government envisages cuts in military spending (by $2,3 billion), as well as in appropriations to other ministries representing the state might – the Interior Ministry, Federal Security Service and Emergency Situations Ministry. Also, there are plans to completely discontinue the funding of law enforcement and Interior Ministry troop modernization.

At the same time, the government will not necessarily approve the Finance Ministry’s proposals. Should the situation get sour, the Kremlin needs the support of the power guys more than ever before, but cuts in the appropriations for them would drive the siloviki back and in an emergency could even question their loyalty to the regime. Thus, possible budget cuts facing the ministries and agencies representing the state might will likely be symbolic, while the social sector will once again bear the chief burden of the budget vicissitudes.