WASHINGTON — For months, Defense Secretary Robert M. Gates has criticized the Pentagon's spending priorities but has done little to change them, choosing instead to leave the most difficult decisions to the next administration.
With the announcement by President-elect Barack Obama last week that Gates will remain in his job in the new administration, the Defense chief has been given broad new power to reshape how the Pentagon selects, designs and builds new weapons systems.
The decision to keep Gates could spell the end of the Army's $160-billion Future Combat Systems program and dim Air Force hopes for large numbers of new high-tech F-22 fighter jets. At the same time, smaller projects -- perhaps blimps or light planes useful for ongoing conflicts -- are likely to find new support.
"It is going to be more of a Wal-Mart approach than a Gucci approach," a senior Pentagon official said.
Gates explained his decision to remain at the Pentagon last week by citing acquisition reform and military modernization as crucial challenges.
Pentagon officials, meanwhile, are bracing to see how Gates translates his words into action. Many officials believe that, under President Bush, Gates "punted" on key decisions such as the competition to build a new refueling tanker and whether to halt production of the F-22.
"Now he is going to be the recipient of those punts, and he won't be calling a fair catch," said Geoff Morrell, Pentagon press secretary. "He is prepared to deal with them head-on."
The Pentagon's proposed budget for 2010 will be sent to lawmakers in February, but it is unlikely to reflect dramatic shifts in priorities because it is being prepared under Bush. But in coming months, officials will begin making the more difficult spending choices, in part because of the new administration and in part because of a shrinking pool of money.
"A combination of budget shortfalls and the demands of fighting two wars will force very hard choices on the services and the Pentagon," a senior Defense official said. "Choices that might have been finessed in the past can no longer be avoided."
The official, like several others interviewed for this article, spoke on the condition of anonymity because decisions on spending and weapons programs have not yet been made.
In Obama's administration, Gates will face two primary issues: how the Pentagon buys weapons and which weapons it chooses to buy. Gates has been a critic of both.
The acquisition system at the Pentagon, particularly within the Air Force and Navy, has been mired in controversy. Ships have been delayed because of construction defects and other problems.
The Air Force has been embroiled in controversy and delays over several weapons competitions, including over its aerial tanker.
Morrell said Gates was not trying to remake the entire purchasing system.
"He wants to get acquisition and procurement back on track," Morrell said. "He is not looking to build a new railway, but he is determined to put them back on the rails."
In past months, Gates has been harshly critical of the Air Force's expensive F-22 fighter plane, favoring the less costly F-35.
But in recent interviews, Gates has softened his tone on the F-22, appearing open to a compromise that would allow Air Force officials to buy some additional planes, though not as many as they wanted.
Some senior officials believe it is unlikely that the Obama administration will shut down F-22 production, a move that could eliminate thousands of manufacturing jobs during a time of economic crisis.
"My assumption is he isn't going to do anything too radical because the fiscal environment will be very sensitive to radical things," said a senior Pentagon official. "If he were to say, 'I am going to cancel the F-22 program,' adding 10,000 people to the unemployment line is not going to be well-received."
But the senior official and others said they believed that systems not yet in production could be in greater jeopardy.
Gates acknowledges the need for strategic bombers and billion-dollar ships. But he has questioned whether the most sophisticated weapons can best counter low-intensity threats.
During his first two years at the Pentagon, Gates pushed the bureaucracy to field specialized equipment in Iraq, such as mine-resistant, ambush-protected vehicles, or MRAPs, that have helped reduce the number of casualties from roadside bombs.
Gates believes that the Pentagon must improve its ability to develop cheaper and low-tech weaponry for counterinsurgency missions, such as those in Iraq and Afghanistan.
But the military services remain focused on big weapons programs -- ships, planes and new generations of tanks and troop transports, officials argue.
"There are still a lot of programs out there that are more focused on the Cold War mentality, as opposed to what the secretary has described over the last year," the senior Pentagon official said.
There are dozens of ideas that can be developed, if Gates and his new team decide to support them.