Pentagon cost-cutting aimed at new gear

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The Pentagon is scurrying to find cuts in projected defense spending as part of President Bush's deficit-reduction campaign, defense and industry officials say.

The cuts would not be in the current budget, which took effect Oct. 1, but in the fiscal 2006 defense appropriation, which goes to Congress early next year.

"They have got a major budget drill going on," said a defense industry executive who is trying to protect the company's programs. This source said the White House Office of Management and Budget wants cuts of up to $10 billion a year.

The source, like others for this story, spoke on the condition of anonymity.

An OMB spokesman said he had no information about such a plan. "The budget process is still under way," the spokesman said. "A lot of decisions still to go."

The defense sources said personnel, operations and maintenance accounts are being protected, meaning the decreases must come from procurement.

The Air Force, for example, is looking at axing the space-based radar, a system so unpopular on Capitol Hill that lawmakers cut most funding in the fiscal 2005 budget. The Navy is said to be looking at delaying its next-generation destroyer.

The budget process is now in the "passback" phase in which OMB sends back the Pentagon's initial proposed budget with suggested changes.

Mr. Bush inherited a defense budget of about $300 billion and has increased it dramatically -- first to restore combat readiness accounts, then to fight the war on terrorism. In August, he signed a $417 billion defense appropriations bill for 2005.

The Pentagon's multiyear plan has called for an increase of about $20 billion in each of the next two years. This does not count emergency budget legislation to fund the global war on terror, including the fighting in Afghanistan and Iraq.

Said a senior military officer at the Pentagon, "We have discussed the impacts of reductions or elimination of certain investment and service support programs. Decisions are expected within a few days, in order to get the budget to OMB."

A Pentagon official said he knew of no plans to call for an increase in active duty troop levels, or "end strength." The officials said the department has all the emergency powers it needs for that purpose.

A backdrop to the budgeting is the Quadrennial Defense Review, which is due to Congress next fall. The QDR is the Pentagon's road map for the next four years.

Officials say the QDR could produce further cuts in weapons systems. Defense Secretary Donald H. Rumsfeld has canceled several programs, most notably the Army's future artillery system and attack/scout helicopter.

Arthur K. Cebrowski, who directs the Pentagon's office of transformation, issued a paper last week that seemed to suggest that high-priced weapons should be sacrificed in favor of those that are less expensive and more numerous.

"The department must develop a comprehensive divestiture strategy so that it can generate growth," Mr. Cebrowski said. "We have to be willing to shed some things."

Near the top of Mr. Rumsfeld's list to "shed" is another round of base closings.