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Updated Monday, February 13, 2012 0:06 am TWN, By Andrea Shalal-Esa, Reuters

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Pentagon 2013 budget eyes 7.5% cut in R&D, procurement

WASHINGTON--The Pentagon's fiscal 2013 budget plan calls for spending of US$178.8 billion to develop and buy new warships, fighter jets and other major weapons, a 7.5-percent drop from the level initially projected for the coming year, according to a detailed budget document obtained by Reuters.

The total acquisition amount, which includes US$9.1 billion in war-related funding, is down about 12.2 percent from the level requested in last year's budget, the document shows. The fiscal 2012 acquisition request included US$15.4 billion in war funding.

The fiscal 2013 plan foresees spending of US$109.1 billion for procurement and US$69.7 billion for research and development, compared with earlier projections of US$117.6 billion for procurement and US$75.7 billion for R&D.

The document shows that the U.S. military is maintaining high levels of spending on most aircraft and ships as it shifts its focus to the Asia Pacific region under a new military strategy announced last month by U.S. President Barack Obama and Defense Secretary Leon Panetta.

At the same time, the Pentagon will spend US$2 billion less on space programs funding for ground vehicle programs will be far lower as the U.S. military reduces the size of the Army and Marine Corps after 10 years of war in Afghanistan and Iraq.

“It doesn't look that bad for the Air Force and Navy procurement accounts, but the Army is clearly getting less money,” said Virginia-based defense consultant Jim McAleese.

He said Boeing Co., the No. 2 U.S. weapons maker, fared well in the budget overall, especially given a sharp increase in funding for the KC-46 refueling tanker from US$877 million to US$1.82 billion, as did Lockheed Martin Corp., the No. 1 supplier.

Huntington Ingalls Industries, the company spun out of Northrop Grumman Corp. last year, also did better than expected, with the Navy adding US$781.7 billion for initial construction funding of a new aircraft carrier, and US$1.6 billion for the refueling of the USS Abraham Lincoln carrier.

Truck maker Oshkosh Corp. was hit hard by the Army's downsizing, losing about US$600 million in funding for heavy trucks and a continued slowdown in a medium vehicle program.

Panetta last month gave highlights of the 2013 budget, his first as defense secretary and the first that takes into account a deficit-reducing measure passed by Congress that requires cuts of US$487 billion from projected spending over the next decade.

It is also the first Pentagon budget since the Sept. 11, 2001, attacks that requests less funding than the year before.

Weapons makers like Lockheed Martin Corp., Boeing Co., Northrop Grumman Corp., General Dynamics Corp., Huntington Ingalls Corp. and Raytheon Co. have been anxiously awaiting details about their programs.

The Pentagon is due to formally release the details on Monday when President Obama sends his 2013 budget request to Congress, which must approve the spending plan.

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