March 12, 2019 / 4:13 PM / 9 months ago

U.S. defense budget favors Navy shipbuilding, fewer Boeing tanker jets

WASHINGTON (Reuters) - U.S. President Donald Trump’s $750-billion defense budget includes more money to build ships, fulfilling a campaign promise to strengthen the Navy, but also cuts the number of Boeing Co KC-46 tanker jets, the Pentagon said on Tuesday.

FILE PHOTO: The Boeing KC-46 Pegasus aerial refueling tanker is seen before a delivery celebration to the U.S. Air Force in Everett, Washington, U.S., January 24, 2019. REUTERS/Lindsey Wasson

The defense spending request to Congress is the largest ever in dollar terms, but not after being adjusted for inflation, and is meant to counter the growing strength of the Chinese and Russian militaries.

The Navy saw an increase of 5 percent, or $9.9 billion, in top-line funding to kick off a quicker pace of ship construction, including aircraft carriers made by Huntington Ingalls Industries, and Virginia and Columbia class nuclear submarines made by Huntington and General Dynamics.

The Air Force had a slightly larger budget increase of 6.1 percent, or $11.8 billion. But in a blow to Boeing, the Trump administration cut the number of orders for the KC-46 refueling tankers to 12, from 15 requested in the previous year. The program has been troubled by cost overruns and problems with the construction process.

Boeing has had a difficult week as countries around the world suspend operations of its top-selling 737 MAX aircraft after a crash on Sunday in Ethiopia that killed 157 people.

The Pentagon budget request reflects a shift away from smaller regional conflicts as the U.S. military refocuses on the possibility of fighting powerful nation states. “China and Russia are not going to fight us the way we’ve gotten used to fighting in the recent past,” a senior Pentagon official told reporters ahead of the budget rollout.

“Essentially, it moves past the Desert Storm model to a multi-domain operations within denied environments,” meaning better U.S. teamwork will be required to fight a prepared adversary.

As part of this change, the U.S. Army eliminated 93 programs, freeing up $3.6 billion to focus funds on six priorities for modernizing the Army. These include a better way to precisely fire weapons over a long distance, a new combat vehicle, a new helicopter and better missile defenses. Trump’s proposal calls for a drop in the number of F-35 jets made by Lockheed Martin Co to 78 across the Air Force, Navy and Marine Corps, from last year’s total purchase of 93. Last year, members of Congress increased the Pentagon’s purchase request in the budget they passed.

The U.S. Missile Defense Agency (MDA), charged with the mission to develop, test and field a ballistic missile defense system, saw its budget cut by $1 billion to $9.4 billion.

Trump’s smaller request follows a significant budget boost last year after several North Korean missile tests.

The MDA budget would help fund the expansion of the Ground-based Midcourse Defense (GMD) system, a network of radars, anti-ballistic missiles and other equipment designed to protect the United States from intercontinental ballistic missiles.

One Pentagon-wide effort in lasers that could be used to defeat missiles saw investment slow dramatically. After nearly doubling the MDA’s budget for directed energy from $109 million in 2018 to $224 million in 2019, the Pentagon as a whole plans to invest just $235 million in the technology in fiscal 2020.

This year’s budget request increases pay by 3.1 percent across the military, and sets a goal of recruiting 6,000 across all active and reserve military to bring the size of the military to 2.14 million.

Reporting by Mike Stone; Editing by Bernadette Baum and Susan Thomas

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