Pentagon eyes $468.9 bln budget for fiscal 2008

By Andrea Shalal-Esa and Jim Wolf
Friday, December 15, 2006; 11:39 PM

WASHINGTON (Reuters) - The White House has approved a $468.9 billion budget for the Pentagon in fiscal year 2008, a six-percent increase over last year's request, according to a Defense Department document obtained by Reuters.

It is also asking the Pentagon to cover some Army and Marine Corps war costs in Iraq and Afghanistan as part of the regular budget, rather than through emergency budget requests.

The 2008 budget request is $4.7 billion more than the level the Pentagon forecast in its 2007 budget documents.

Deputy Defense Secretary Gordon England welcomed the increase in a letter to Rob Portman, director of the White House Office of Management and Budget.

But he strongly objected to OMB's orders that "costs to accelerate Army and Marine Corps combat and combat support units, Army Force Readiness and replacement of additional aircraft losses" should be funded as part of the 2008 budget.

England said that violated the Pentagon's earlier agreement with the White House that the extra spending would be used to cover Army budget shortfalls, and that war costs would continue to be funded through supplemental budgets.

The Bush administration is continuing to discuss budgets with various government agencies, including the Pentagon, and will submit a fiscal 2008 budget to Congress in February.

"The inconsistency ... is that adding war costs in the budget would effectively negate the prior agreement for a topline increase," England said in the December 14 memorandum.

Offsets proposed by White House budget officials would "significantly weaken the department's strategic position" and jeopardize the Pentagon's joint warfighting concept, he said.

England did not give details on the proposed offsets.

However, he said the Pentagon's initial budget proposal -- before the suggested offsets -- was based on thousands of hours of work, and the best judgment by senior military and civilian leaders.

"It is balanced and provides for our nation's defense at a time of diverse and dramatic threats," England said.

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