November 3, 2005

Pentagon memo eyes $32 bln in cuts

WASHINGTON (Reuters) - The U.S. military should trim at
least $32 billion from its spending through 2011, starting with
$7.5 billion in fiscal 2007, acting Deputy Defense Secretary
Gordon England said in an October 19 memorandum.

In the memo, England asked the Air Force, Army and Navy to
propose cuts ahead of a November 21 meeting with Defense
Secretary Donald Rumsfeld, said one defense official, who asked
not to be named.

More cuts could be requested depending on a "top line"
figure to be set by the White House later this month, the
official said.

England's targets are separate from the Quadrennial Defense
Review, a congressionally mandated review of weapons programs
and policies due to conclude in February, the source said.

The new cuts follow $30 billion in cuts mandated by the
White House budget office last year. The Pentagon's fiscal 2006
budget was cut by $6 billion.

"The bottom line is the big defense spending increases that
followed 9/11 are over," said Loren Thompson, defense analyst
with the Virginia-based Lexington Institute.

England's proposed cuts are in line with previous estimates
by defense analysts, who have been predicting cuts of $7.5
billion to $15 billion for fiscal 2007.

One former senior Pentagon official said mid-term
congressional elections next year could prevent the White House
from seeking even deeper defense cuts, at least for 2007.

The Pentagon in February estimated its fiscal 2007 budget
would be $443.1 billion, rising to $502.3 billion by 2011.

Thompson said aircraft programs were particularly
vulnerable, including the Air Force's C-17 cargo plane, built
by Boeing Co., Lockheed Martin Corp.'s Aerial Common Sensor
(ACS) surveillance plane, and Northrop Grumman Corp.'s E-10A
Air Force spy plane.

Army programs still under development, including the ACS
program, the Joint Tactical Radio System program to develop new
software-based radios, and some portions of Boeing's Future
Combat Systems (FCS) could be scaled back or cut, said James
McAleese, a Virginia-based lawyer and defense analyst.