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Deputy Defense Secretary Ashton Carter's reason at the briefing with Panetta: "That's the fate of things that become too expensive in a resource-constrained environment." But just a few months ago, the Pentagon had said that "when analyzed in the context of the Global Hawk mission, the U-2 costs $220 million per year more than the Global Hawk." Panetta also called for slowing the pace of building new ships and speeding up the retirement of older ones. The Pentagon blueprint said it would reduce the purchase of Littoral combat ships, the speedy boats built at shipyards in Wisconsin and Alabama, by two. It didn't provide more specifics. The ship is built in the city of Marinette on the Wisconsin-Michigan border, and has meant hundreds of jobs in the two states. While Wisconsin has an unemployment rate of 7.1 percent, Michigan's jobless rate of 9.3 percent is well above the nation's. The chairman of the Senate Armed Services Committee is Michigan Democrat Carl Levin, who declined to comment about specifics of the budget proposal. Freshman Sen. Ron Johnson, R-Wis., praised the Littoral as a ship that "just keeps us a little more nimble." Contributing to the nervousness on Capitol Hill -- and in the defense industry
-- is the prospect of deeper cuts in the military. The deficit-cutting supercommittee's failure last fall to come up with at least $1.2 trillion in savings last year means automatic, across-the-board cuts for defense and domestic programs beginning next January. For the Pentagon, that would mean an additional $492 billion reduction over a decade on top of the $487 billion. Top Republican senators have proposed reductions in the federal workforce and a freeze in federal pay to delay the automatic cuts for a year. Both the White House and congressional Democrats have rejected any move to undo the automatic cuts absent a far-reaching deficit-cutting plan. Jeremy W. Devaney, a senior equity analyst in defense technology for BB&T Capital Markets, said contractors look at Congress and the administration, and "they don't believe sequester is going to happen, but they don't know how it's not going to happen."
[Associated
Press;
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