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Gates envisions 'fundamental shift' in weapons spending

Congress to get a preview of proposed cuts

Defense Secretary Robert Gates, shown last month in Washington, is expected to announce major trims in the Pentagon's $180 billion-a-year weapons acquisition plan on Monday. Defense Secretary Robert Gates, shown last month in Washington, is expected to announce major trims in the Pentagon's $180 billion-a-year weapons acquisition plan on Monday. (AP Photo/Manuel Balce Ceneta)
By Bryan Bender
Globe Staff / April 4, 2009
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WASHINGTON - Secretary of Defense Robert M. Gates will announce "a fundamental shift" in the military's weapons budget on Monday, unveiling a series of cuts to big-ticket programs that he deems ill-suited to meeting current national security threats, the Pentagon said yesterday.

"These are not changes to the margins. This is a fundamental shift," Pentagon press secretary Geoff Morrell told reporters yesterday, though he declined to provide specifics of the plan, which Gates will unveil after briefing key members of Congress over the weekend.

Some news reports suggest that Gates's pruning of the Pentagon's $180 billion-a-year weapons acquisition plan will be more extensive than anticipated and potentially affect dozens of programs, including warships, aircraft, and combat vehicles, as well as missile defense systems and a new fleet of presidential helicopters.

New England-based defense firms such as Raytheon Co. and United Technologies have been expected to take a hit from cuts in several high-profile programs - potentially forcing layoffs of thousands - but the full package of terminations and delays could be even more extensive than expected.

For example, defense trade publications are reporting that several warships as well as submarine construction could be affected - cutbacks or delays that would harm the business of General Dynamics' two major shipbuilding facilities in New England: Bath Iron Works in Maine and Electric Boat in Connecticut.

Meanwhile, other projects that Gates considers more relevant to helping troops win the wars in Iraq and Afghanistan could see a boost in funding, analysts said.

As news of the decisions began leaking out late this week, Wall Street analysts were warning investors to expect a bold plan that would probably prompt a sell-off of major defense stocks.

"We believe [Gates's] proposal regarding these 40-plus programs will likely include proposed cancellations and bold, substantial cuts," Morgan Stanley's research division told investors in a note late Thursday. "Programs almost certain to be covered," the analysts predicted, citing "sources and trade press" reports, include all three major fighter aircraft programs - the F-22, F-35, and F/A-18 - as well as the Littoral Combat Ship, a small warship designed to operate close to shore that is under contract to Bath.

The plan will have to go before Congress, which is under heavy pressure to reverse some of the decisions from lobbyists and constituents.

Morgan Stanley predicted that announcing the cuts ahead of President Obama's full federal budget in May could take some of the heat off the new president and make Gates, who served as George W. Bush's defense secretary, the plan's chief salesman.

Gates, a former CIA director and deputy national security adviser who has served eight presidents, is considered a particularly convincing advocate for why the cuts are in the best interest of the country. He has insisted that some conventional weapons programs must be canceled or delayed in order to afford the tools needed to address terrorism and guerrilla insurgencies, which he believes will pose far greater dangers to the United States in the foreseeable future than opposing armies, navies, or air forces.

Still, some analysts predict Congress will question the analytical framework that Gates used to come to his decisions. Loren Thompson, president of the Lexington Institute in Arlington, Va., who advocates for some of the weapons that may be cut, said that because the announcements will be made before a review of all military programs this summer, as required by Congress every four years, some critics could assert that Gates's decisions require further study before being implemented.