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Gates Planning Major Changes in Defense Programs, Budget

By R. Jeffrey Smith and Ellen Nakashima
Washington Post Staff Writers
Saturday, April 4, 2009; A01

Defense Secretary Robert M. Gates is expected to announce on Monday the restructuring of several dozen major defense programs as part of the Obama administration's bid to shift military spending from preparations for large-scale war against traditional rivals to the counterinsurgency programs that Gates and others consider likely to dominate U.S. conflicts in coming decades.

Gates's aides say his plan would boost spending for some programs and take large whacks at others, including some with powerful constituencies on Capitol Hill and among influential contractors, making his announcement more of an opening bid than a decisive end to weeks of sometimes acrimonious internal Pentagon debate.

Among the programs expected to be heavily cut is the Army's Future Combat Systems, a network of vehicles linked by high-tech communications that has been plagued by technical troubles and delays; with a price tag exceeding $150 billion, it is now one of the most costly military efforts.

Gates also is considering cutting a new $20 billion communications satellite program and reducing the number of aircraft carriers from 11 to 10, and he plans to eliminate elements of the decades-old missile defense effort that are over budget or considered ineffective, according to industry and administration sources.

They cautioned that not all the details have been decided.

"He is strategically reshaping the budget," said Gates's spokesman, Geoff Morrell, who declined to provide details. The secretary is "subjecting every program to harsh scrutiny, especially those which have been over budget and/or behind schedule. . . . The end result, we hope, is a budget that more accurately reflects the strategic priorities of the president."

Gates has signaled for months that the Pentagon's resources are misallocated, but his embrace of the budget increase proposed by President Obama represents an abrupt turnaround. Late in the Bush administration, he blessed a military-service-driven budget proposal for 2010 packed with $60 billion in spending beyond what the Pentagon had earlier recommended. Much of the added funds would have accelerated the production of existing ships, airplanes, Army vehicles and missile defenses.

The proposal became known among some analysts as Gordon England's "fairy dust," after the deputy defense secretary who helped put it together. The name suggested the magical touch that would be needed to win a proposed 14 percent budget increase amid a global recession.

Even though the Office of Management and Budget last April ordered all Cabinet agencies to avoid presenting plans that might box in the next administration, Gates got permission to present the proposal to Obama's transition team.

The new president agreed instead to a 4 percent increase in defense spending, which put Gates, whom Obama decided to keep on as defense secretary, in the position of having to reorient military priorities within a smaller spending limit than he had initially supported.

The turnabout has not been easy, according to a senior official involved in the process, because the military services "became vested stakeholders" in last year's ambitious proposal. Gates has become so consumed by the internal discussions that, after briefing Obama Monday on his thinking, he skipped the celebration of NATO's 60th anniversary in Europe this weekend.

Several experts said the Pentagon budget plan last year was an effort to force the hand of a new administration and stands as a textbook example of military service pressures that have driven the growth in recent years of the defense budget, which has more than doubled since 2001. The 2009 total of $513 billion -- not including special Iraq and Afghanistan war costs -- exceeds the combined military budgets of the next 25 highest-spending nations.

The timing and size of the much higher proposal that Gates initially presented to the transition team "are provocative," said David J. Berteau, a former Pentagon official in the Reagan and George H.W. Bush administrations.

A current Pentagon official who is disenchanted with past allocations of resources said, "It shines a light on the internals of the department: a culture that lives to grow its resources and make that the whole measure of merit."

That official and several others spoke on the condition of anonymity because they were not authorized to talk about the budget.

The effort to win political support for a much higher spending target began in March 2008 with the first of several appeals to outgoing President George W. Bush by the Joint Chiefs of Staff chairman, Adm. Mike Mullen. In meetings with Bush then and in July, he argued that military spending, as a rule, should be at least 4 percent of the nation's gross domestic product.

Mullen's position grew out of his conviction that the United States spent the right amount on defense in the decades before 1994, when President Bill Clinton let that proportion drop. Mullen sees the 4 percent target as "not an absolute number, but a good minimum starting point," said his spokesman, Navy Capt. John Kirby.

A group headed by Deputy Secretary England and Marine Gen. James E. Cartwright, vice chairman of the Joint Chiefs of Staff, approved details of the service-driven budget plan. Nearly half was meant to pay for what the military calls "persistent presence" overseas, including at least 10 combat brigades with large recurring costs. "Our forces are likely to be deployed around the world for the foreseeable future," said a Pentagon official who supported this approach.

In addition to urging a budget of $584 billion for next year, the group also charted hundreds of billions of dollars of additional spending over five years. The "fairy dust" notion reflected the fact that even as they pushed the plan, many officials realized that its chances of approval were slim.

While Gates did not lead the effort, he insisted that the results be ready by Election Day -- much earlier than was done for previous new administrations -- and then explicitly obtained White House permission to brief Obama's transition team on the results. Morrell said Gates was not attempting "to squeeze or pressure the new administration"; rather, the information was presented as "a conversational piece."

The team rejected the size of the proposed increase and the recommendation to set aside billions now for permanent stationing of many combat brigades overseas. Gordon Adams, a national security expert who was on Obama's transition team, said the message from the Pentagon was not subtle. "I saw this very much as an effort to jam the system," he said. "It didn't matter who ended up in the White House. If they decided to go below that number, it would be like they were cutting defense."

Obama addressed the Pentagon budget March 24, saying: "We've already identified potentially $40 billion in savings just by some of the procurement reforms. . . . And we are going to continue to find savings in a way that allows us to put the resources where they're needed, but to make sure that we're not simply fattening defense contractors."

Since his reappointment, Gates -- who has demonstrated an uncanny ability to work with different presidents -- has explained that he supports more belt-tightening because the economy is now much worse. "Everybody must recognize, and frankly all the service chiefs do, the economic climate we find ourselves in," Morrell said in February. "These guys don't live, you know, in a cave somewhere or in a vacuum."

Staff writer Greg Jaffe contributed to this report.

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