A top national-security adviser to Barack Obama said he expects military spending during a Democratic administration wouldn't drop, a key concern for a defense industry that is accustomed to growing Pentagon budgets and anxious about potential cutbacks.

Richard Danzig, a U.S. Navy secretary during the Clinton administration and a leading contender to be the secretary of Defense in an Obama administration, said he doesn't "see defense spending declining in the first years of an Obama administration. There are a set of demands...