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K Street Scrambles After Gates’ Budget Proposal

The potentially lucrative aftershocks of Defense Secretary Robert Gates’ call for a broad overhaul in military spending quickly spilled onto K Street on Tuesday, where lobbyists mobilized to respond to the slew of cuts made to some of Congress’ most favored programs.

“There will be many people on K Street making lots of money,” said Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information and a former aide on national security issues to both Republican and Democratic Senators. “There will lots of attempts to reverse what Gates is recommending.”

The nation’s biggest defense contractors, including Lockheed Martin, Northrop Grumman, General Dynamics and Boeing, all appeared to take a hit in the proposed $534 billion budget for fiscal 2010, described by Gates as a profound reform in how the Pentagon does business.

The prize targets for lobbyists and Congress appeared to be reversing cuts to the Air Force’s $140 billion F-22 Raptor fighter jet program run by Bethesda, Md.-based Lockheed Martin, and the Army’s $160 billion Future Combat Systems program led by Chicago-based Boeing. Both are large, marquee programs that require sophisticated technology and create high-paying jobs.

“People in the defense space have had an eye on the Department of Defense for months, anticipating big changes,” said Andrew Howell, a partner at defense-focused lobbying shop Monument Policy Group, and who is not a registered lobbyist for either Boeing or Lockheed.

Lockheed has emphasized that curtailing production of the F-22 jets would jeopardize 95,000 workers across 44 states, while Boeing contends that cuts to the Future Combat Systems program would threaten 91,000 jobs in 43 states.

“The defense contractors are making the jobs argument the tip of their lobbying spear,” said Travis Sharp, a defense analyst with the Washington-based Center for Arms Control and Non-Proliferation. “I can’t think of one Member of Congress who won’t be affected by the recommendations Secretary Gates offered.”

Lockheed and Boeing, who appear to be most affected by the proposed changes, are also two of the biggest players on K Street, employing a roster of in-house lobbyists as well as a bunch of outside consultants and lobbying shops.

Lockheed spent $15.4 million on lobbying in 2008, while Boeing spent $16.6 million that same year, according to lobbying disclosure records.

Both companies had been applying pressure for weeks before the announcement, highlighting the impact any cuts to their military spending programs would have on the nation’s economy and jobs back home in the districts of Members of Congress.

“It’s a matter of explaining the economic importance of these particular programs and the jobs they create,” Howell added.

Both Lockheed and Boeing kept their next moves close to the chest immediately following Monday’s announcement from Gates. Spokesmen from each company declined to comment on lobbying activities or the budget’s prospects in Congress, stating only that they were assessing the impact of the secretary’s proposal.

If adopted by Congress and the White House, the budget for fiscal 2010 would, among other things, end the $6.5 billion presidential helicopter program run by Lockheed, restructure the $160 billion Army’s Future Combat Systems run by Boeing and end a $10 billion program that pitted Lockheed and Boeing against Northrop in competition to build a new, long-range bomber.

“All this is a bit of the traditional game,” Howell said. “The Pentagon proposes cuts, and inevitably Congress restores them.”

In a sign of the give-and-take to come between Congress and the executive branch, the response from key Members of Congress with sway over the budget process was swift and deliberate following Gates’ announcement.

“The buck stops with Congress, which has the critical constitutional responsibility to decide whether to support these proposals,” said Rep. Ike Skelton (D-Mo.), chairman of the Armed Services Committee, a key stopping point for the budget in Congress.

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