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Gates takes aim at an elusive target: US defense budget
by Staff Writers
Washington (AFP) May 16, 2010

Romania considering new fighter jets
Bucharest, Romania (UPI) May 14, 2010 - Wooing Romania's lawmakers, Eurofighter pledged that more than 5,000 skilled jobs could be created in the country if Bucharest shelved plans to buy Lockheed Martin's F-16 fighter jets, opting instead for the Eurofighter Typhoon. The proposal was sounded by Maurizio De Mitri, a senior vice president at Alenia Aeronautica, the unit of Italy's Finmeccanica group, which is a member of the Eurofighter consortium. His proposal comes about two weeks after Romania approved a deal to buy 48 F-16 combat aircraft for $4.5 billion. Under the deal, half of the batch would include F-16C Block 50 planes with the rest include used models reconditioned to F-16C Block 25 standards. The upgraded F-35 model initially considered by Romanian military officials was scrapped because of budgetary constraints that would have strained the country's economy by an additional $4 billion.

De Mitri outlined plans to sell Romania 24 Tranche 1 Typhoons, some of which have been flown by the Italian air force for the last seven years. Defense News reported that the Eurofighter price, including logistical support and training, would be $1.3 billion. That would match the purchase price for the half of the Lockheed Martin F-16s that have been ordered. Romania's Supreme Defense Council approved the F-16 deal in March but this week the Senate Defense Commission called in representatives of Eurofighter and rival Saab "to hear," as it said, competing options. Sweden's Saab has already pitched its flagship Gripen fighter. Officials said in April that they could sell Romania 24 new Gripen for roughly the same price pitched by Lockheed Martin for its F-16s. The deal would also include training, logistics support, 100 percent offset and easy payment terms. Eurofighter's de Mitri this week matched that bid, arguing that the 100 percent offset deal, as well as technology transfer and local industrial participation, could generate 5,000 jobs locally.

"Romanian industry could be involved in a logistical support program similar to that seen in other Eurofighter partner nations, which is leading to record performances for the aircraft," a Eurofighter spokesman told Defense News. "Our price also includes logistical support and training and we are also offering long-term repayment," de Mitri added. It is understood that Romania could take delivery of the Eurofighters by as early as the end of 2011. A final decision rests with the Romanian parliament. But Bucharest is not the only government seeking to save money on F-16 deals. Five years ago, Chile bought 10 new F-16s from the United States for an estimated $50 million each. It also purchased 18 used F-16s from the Netherlands for one-fifth of the price for each plane.

US Defense Secretary Robert Gates is vowing to rein in the Pentagon's mushrooming budget and bloated bureaucracy, hoping to succeed where his predecessors mostly failed.

After having scaled back some major weapons programs, the former CIA director wants to cut up to 15 billion dollars a year in overhead costs, saying the United States can no longer afford a "gusher" of defense spending.

But Gates is venturing into treacherous political territory, as American lawmakers view cuts in defense programs as taboo, especially any changes to pay or benefits for service members and veterans.

After a May 8 speech that called for a modest overall rise in defense funding coupled with cost-saving measures, right-leaning commentators accused Gates and President Barack Obama of scheming to gut the American military.

"The massive and broad cuts to the military budget now being telegraphed will ensure that the armed forces are ever-less-capable of projecting power, leaving the nation and its allies increasingly open to blackmail, if not actual attack," said the Center for Security Policy, a conservative think-tank.

Some key congressional lawmakers have already proposed raising military pay beyond the increase backed by Gates and called for spending more money on missile defense than recommended by the Pentagon.

Gates in his speech warned "health care costs are eating the Defense Department alive," that overhead and contractor costs are sky-rocketing and that layers of unnecessary management had to be cut to free up money for the military's genuine needs.

He invoked warnings from former president Dwight Eisenhower that excessive spending on defense could undermine the country's economic health.

"Eisenhower was wary of seeing his beloved republic turn into a muscle-bound, garrison state -- militarily strong, but economically stagnant and strategically insolvent," he said.

A long line of Pentagon chiefs have tried to slash red tape and streamline the Pentagon, including the man Gates replaced, Donald Rumsfeld. But few had much success, with entrenched interests -- including veterans groups and industry -- blocking action in Congress.

"Most defense secretaries develop a similar reform agenda at some point," said Michael O'Hanlon of the Brookings Institution. "Most achieve only limited results."

Gates said his approach has better prospects because the country faces an economic and fiscal crisis.

"The national economic situation is different than it has ever been in modern times," Gates told reporters last week. "If we want to sustain the current force, we have no alternative."

He also said he would allow the armed forces to use savings made in overhead costs for weapons and other hardware, giving them an incentive to exercise financial discipline.

The administration portrays Gates as a major reformer of the Pentagon, citing cuts to costly weapons programs and his willingness to fire top officers.

"He's been quite decisive in eliminating systems that he thought were not needed," said Loren Thompson, a fellow at the Lexington Institute and industry consultant.

Skeptics say Gates is no radical reformer, having backed a budget of more than 700 billion dollars for 2011, and question why he failed to tackle wasteful Pentagon spending earlier.

"He's been secretary of defense for 42 months. What has he been waiting for?" Larry Korb, a former defense official and fellow at the Center for American Progress, told AFP. "Just do it."

It remains unclear if Gates will be remembered as a reformer, but after more than three years at the helm he enjoys an unusual degree of credibility in Washington, enhanced by his handling of the Iraq war and his track record as a hard-nosed senior CIA official during the Cold War.

The belt-tightening intiative focused on the 2012 budget suggests Gates, a Republican holdover from the former Bush administration, may stay beyond the end of the year to leave his imprint on the next defense budget and beyond.

He has often served as a heat-shield for the young Democrat in the White House, defusing opposition in Congress to Obama's moves on the Afghan war and arms control.

The influential defense chief who has worked on national security under eight presidents may be the ideal figure to push through limits on the ballooning defense budget.

Gates, in his understated way, sounded confident he would prevail, telling reporters he was ready to make the effort his personal priority.

"When I devote a lot of my time ... things tend to get done."


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Chile wants transparency in arms buying
Santiago, Chile (UPI) May 14, 2010
Chile wants all Latin American countries to be as transparent as it considers itself to be to remove the specter of a developing arms race on the continent, senior officials said. Chilean Foreign Affairs Minister Alfredo Moreno Charme said he does not see an "arms race" on the continent but emphasized it would help to make public who was buying what and why. Other officials told the me ... read more

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