Pentagon eyes $189 billion for procurement, R&D

Defense News ~ WASHINGTON, Jan 29 (Reuters) - The Pentagon's base budget request for fiscal 2011 includes $112.9 billion for weapons procurement, 7.7 percent more than in fiscal 2010, a source familiar with the budget told Reuters.
The Pentagon's 2011 budget request also includes $76.1 billion for research and development, a decrease of 5 percent from the sum enacted in fiscal 2010, said the source, who was not authorized to speak publicly.
The Obama administration is due to release its fiscal 2011 budget request, including the Pentagon budget, to Congress on Monday.
The total sum requested by the Pentagon for procurement and research, $189 billion, a number closely watched by defense companies, marks an increase of 2.2 percent from $184.9 billion, the total enacted for fiscal 2010 that ends Sept. 30.
The increase is modest, but still good news for the defense industry overall, said analyst Loren Thompson with the Virginia-based Lexington Institute.
"For years now, analysts have been predicting a decline in weapons outlays, but somehow they never go down," said Thompson, noting the forecast shift of funding out of technology into personnel accounts was happening more slowly than generally expected.
"I spent the last year telling the industry that the sky was falling and guess what? It's still there," he added.

(Reporting by Andrea Shalal-Esa; editing by Tim Dobbyn and Andre Grenon)