Obama's Proposed Defense Budget for Next Year Axes Major Programs

The U.S. Secretary of Defense announced the broad themes of his budget today. Mr. Gates has canceled several major programs, restructured the Army's biggest, and proposed major changes to the DoD workforce. The proposal will end F-22 production at the current force of 187 including the four currently under production. There will also be an acceleration of the JSF with increased quantities in FY10. The VH-71 Presidential Helicopter and the CSAR-X program will also be canceled. The VH-71 is made by Lockheed Martin. The CSAR-X was won by originally by Boeing but the award was overturned on protest by Sikorsky and Lockheed. A new competition was under way but now if the plan stands no new contract to replace the Air Force's HH-60 fleet. The Air Force will also lose the planned Transformational Satellite System (TSAT) program but more Advanced Extremely High Frequency (AEHF) systems will be built. The Army also is not touched with severe cuts to the Ground Based Mid Course Missile Defense system and a complete restructure of the Future Combat Systems (FCS). More money will be spent on the THAAD and the Navy system that are more oriented towards defense of areas and specific targets. The budget also plans to significantly cut back the number of contractors supporting the Department but will transfer a significant number of them to civil service. Mr. Gates also will hire almost 40,000 more civil servants as part of his plan to reform acquisition. Much more on this to come as Congress and business digest these proposals. There is a great chance that the final budget at the end of the year will have some, all or none of these proposals.