Hagel to preview Pentagon's budget for 2015 on February 24: sources

WASHINGTON (Reuters) - Defense Secretary Chuck Hagel is expected to preview the Pentagon's fiscal 2015 budget request on February 24, a week before the White House sends its formal budget plan to Congress, according to sources familiar with the matter. Hagel is expected to use the announcement to outline the U.S. Defense Department's priorities and challenges in budgeting for the fiscal year that begins on October 1, said the sources, who were not authorized to speak publicly. Hagel last week said the military faces big spending cuts despite a two-year budget deal by Congress that reduced the size of mandatory reductions. The Pentagon must reduce its projected spending for fiscal 2015 by about $40 billion more than planned. He said the department would try to preserve military readiness and capability while establishing a sustainable path for modernizing major weapons systems. Pentagon acquisition chief Frank Kendall told reporters at a Singapore air show this week that tighter budgets would force tough decisions about research and procurement, but said the F-35 fighter jet built by Lockheed Martin Corp and other key arms programs remained a priority. The United States is counting on orders from Britain and other countries that helped pay for development of the new F-35 Joint Strike Fighter to offset delays in U.S. orders caused by mounting pressure on military spending. The U.S. Air Force, Navy and Marine Corps had been slated to order a total of 42 F-35 jets in fiscal 2015, up from 29 in fiscal 2014. Sources familiar with the program said on Monday they expected that number to be reduced by three to six aircraft. The Navy had sought to eliminate refueling the nuclear-power aircraft carrier USS George Washington, but the White House asked for it to be added back into the budget after the plans kicked up resistance on Capitol Hill. One source familiar with the plans said the Navy will express continued commitment to the carrier, but that its funding operations, estimated at $400 million, would not be guaranteed unless more money is added to the budget. Over many years, the operations budget for one carrier alone would rise to billions of dollars, the source said. "It's not a done deal. You don't have a solution to fund that carrier to operate for 25 more years," said the source. The source said the Navy's budget is not expected to include any additional funding for Boeing Co's F/A-18 Super Hornet or EA-18G Growler electronic attack planes, although Boeing is expected to seek congressional funding for at least 21 of the planes. Without an additional U.S. Navy order, the F/A-18 production line in St. Louis will shut down at the end of 2016. (Reporting by Andrea Shalal-Esa and David Alexander; Editing by Amanda Kwan)