U.S. budget pinch presses arms makers to cut costs
Mounting budget pressures worsened by the global financial crisis are giving new urgency to calls for the Pentagon and its top suppliers to rein in the runaway costs of nearly every major arms program.
Top corporate executives, military officials and analysts told the Reuters Aerospace and Defense Summit this week that seven years of sharp growth in U.S. defense spending were ending and future budgets would flatten out at a high level.
But they said the incoming administration of President-elect Barack Obama had already emphasized its intent to scrutinize major weapons programs closely and make reforms.
Defense Secretary Robert Gates told U.S. troops in Kyrgyzstan last week there would be no major cuts in the defense budget for the “next year or two,” but “the significant increases that we’ve seen in recent years are likely to come to a screeching halt.”
Gates, asked to stay on by Obama, said the Pentagon would clearly face “tougher expectations of us in terms of how we spend what we get.”
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