Reshaping the Pentagon budget

It’s a long way to the finish line on this, but Defense Secretary Robert Gates yesterday laid out the Obama administration’s priorities for the US Department of Defense‘s budget in the coming years. Lobbyists, military contractors, and politicians will now set to work on redefining that outline.

The biggest fight could be over the future of the F-22 Raptor fighter aircraft program. Gates’ predecessor, Donald Rumsfeld, tried his best to trim the F-22 program, but was stymied by members of Congress and the US Air Force. Gates is proposing to scale back production of the $150 million fighter in favor of accelerating the testing and deployment of the next-generation F-35 Lightning II, previously known as the Joint Strike Fighter.

Whatever way the wind blows on that call, Lockheed Martin will benefit, since it builds both fighters.

Debate over the Pentagon’s 2010 budget could set off another war on the Air Force’s new air tanker, a $35 billion program that’s been in the works for more than six years. Boeing is squaring off against a team led by EADS and Northrop Grumman for that prize plum, and each bidder has squadrons of defenders in the US Congress. The talk lately is of splitting the huge contract between Boeing and EADS/Northrop Grumman, a politically palatable solution.

On the chopping block is the US Navy‘s DDG-1000 destroyer program. Each destroyer will cost more than $3 billion. One is being built by Bath Iron Works (part of General Dynamics), while another is under construction by Northrop Grumman Shipbuilding. Gates is proposing to build three of the Zumwalt-class destroyers, but only if one contractor does all of the work.

The secretary of defense also wants to cut back the missile defense program, the US Army‘s Future Combat Systems program, and the presidential helicopter program (which is breathtakingly running over its budget).

Of course, all of this will first run through the wickets of Washington, where the president proposes and Congress disposes.