Fear of losing tech edge factors into Pentagon budget plans

By David Alexander WASHINGTON (Reuters) - Concerns that cuts in defense spending could erode the U.S. military's technological edge over rivals such as Russia and China are in part driving the Pentagon's plans to slash troop levels and retire aging weapons. U.S. defense officials have watched in recent years as Moscow and Beijing have tested a string of sophisticated weapons, from radar-evading aircraft and anti-ship missiles that fly many times the speed of sound, to integrated air defenses. "The development and proliferation of more advanced military technologies by other nations means that we are entering an era where American dominance on the seas, in the skies, and in space can no longer be taken for granted," Defense Secretary Chuck Hagel said last week. Hagel will unveil a 2015 budget on Tuesday that includes cutting the Army by 40,000 to 50,000 troops to levels last seen before the United States entered World War Two and killing off the fleet of tank-killing A-10 "Warthog" aircraft. The venerable U-2 spy plane from the Cold War era will be retired to allow the Pentagon to focus on developing the unmanned Global Hawk reconnaissance drone. While the Defense Department's spending of around $500 billion is still more than the next six or seven countries combined, research and development spending has fallen more than 20 percent since President Barack Obama took office. It is expected to continue dropping as congressionally mandated budget caps force further belt-tightening in the coming years. "Everything, including R&D (research and development) and S&T (science and technology), takes a big hit in this defense budget," said Mackenzie Eaglen, a defense analyst at the conservative American Enterprise Institute think tank. In contrast, China and Russia have been rapidly increasing their security spending and have passed new technological milestones in recent years. The role of Russia's emboldened military in the current Ukraine crisis is another reminder to the United States that Moscow remains a formidable adversary. IHS Jane's Annual Defense Budgets Review estimated in February that China's defense spending would grow by 14 percent this year to nearly $160 billion in another double-digit percentage jump, while Russia's would rise more than 40 percent to nearly $98 billion by 2016. China has tested two radar-evading aircraft since 2011. It launched its first aircraft carrier, the Liaoning, in 2011 based on a Soviet-era hull purchased from Ukraine, and has begun building what Chinese media said earlier this year would be the first of four indigenous aircraft carriers. It demonstrated an anti-satellite weapon in 2007, showing it could even put U.S. reconnaissance and communications systems in space at risk. In a breakthrough, Beijing conducted a hypersonic glider flight in January, testing a system capable of delivering a missile to its target flying several times the speed of sound to elude anti-missile defenses. The United States, Russia and India are all said to be working on the hypersonic technology, but only Washington and Beijing have conducted test flights. China, Iran and Russia are also developing precision anti-ship missiles, so-called anti-access, area denial weapons, that can threaten potential adversaries that try to operate near its coastlines. "MONOPOLY ERODING" Those advances and the export of precision-guided weapons and integrated air defenses to other nations is forcing the U.S. Navy to adapt by developing the ability to operate further from shore with longer-range weapons. "The United States has enjoyed a monopoly in guided weapons for about 20 years," said Robert Work, the former Navy undersecretary nominated to be the deputy defense secretary. "That monopoly is eroding," Work told Congress in his nomination hearing last week. But some Pentagon-watchers see no need for panic. Lawrence Korb, a defense analyst with the liberal Center for American Progress think tank, said the rhetoric about losing the technological edge was part of selling the Pentagon's proposed changes to Congress. "It's not a serious threat," Korb said. "The point they're trying to make is that if you don't do something about ... the spiraling personnel costs, then you could (face a serious threat)." To keep the technology gap in America's favor, the Pentagon will push ahead with a new long-range bomber that to a certain extent counters rivals' anti-access, area denial systems by enabling U.S. forces to operate from greater range. The Pentagon is looking to buy up to 100 of the new planes for no more than $550 million apiece and is expected to seek proposals for the aircraft this autumn. Retiring the A-10 plane would free up $3.5 billion over five years that could be used to ensure continued funding for the radar-evading F-35 Joint Strike Fighter, a multi-role aircraft being developed to replace a wide range of other warplanes. The F-35 is currently being produced in small lots, but the military expects over time to buy 2,443 of the aircraft at a cost of some $392 billion. Defense officials say the 2015 budget, which comes into force in October, includes funds to expand the military's defensive and offensive cyber capabilities, which are seen as critical to protecting the military's computer networks and engaging opposing forces in future war. Navy officials say they also expect funds for continuing research on laser weapons, like one that is to be deployed on the USS Ponce this year, and a project to build a gun that uses electromagnetic energy to fire projectiles. The Navy has spent about $40 million so far developing the laser weapon, which can be used against drones or missiles or a swarm of small boats. It emits a pulse of energy and is cheap to use, giving the military "a technological edge that has a huge affordability piece to it," said Rear Admiral Matthew Klunder, chief of naval research. "That resonates in the building," he said. "This is one of those priorities that we are going to still fund." (Additional reporting by Andrea Shalal and Doina Chiacu; Editing by Alistair Bell and Lisa Shumaker)