UPDATE 2-Obama seeks $205 bln for Iraq, Afghan wars

(Writes through with Gates quotes, analyst reaction)

By Tabassum Zakaria and Andrea Shalal-Esa

WASHINGTON, Feb 26 (Reuters) - President Barack Obama requested about $205 billion in war funding through the end of fiscal 2010 on Thursday, as he sought to withdraw tens of thousands of troops from Iraq and boost forces fighting a resurgent Taliban in Afghanistan.

Obama's first budget proposal asked for $75.5 billion through September, which would bring total war spending to $141.4 billion for the current fiscal year. Obama also requested a slightly smaller $130 billion to fund the wars for fiscal year 2010, which starts on Oct. 1.

Obama asked Congress to increase the Pentagon's regular budget to $533.7 billion next year -- up 4 percent, or $20.4 billion, from its spending plan for the current year, drawn up under the Bush administration.

"In our country's current economic circumstances, I believe that represents a strong commitment to our security," Defense Secretary Robert Gates told reporters at the Pentagon.

U.S. military spending accounts for roughly half the global total, according to independent experts.

Obama, who took office on Jan. 20, made a campaign promise to bring U.S. troops home from the unpopular Iraq war and was expected to announce his withdrawal plans in a speech on Friday at Camp Lejeune, a Marine Corps base in North Carolina.

But Obama has also authorized the deployment of 17,000 more troops to Afghanistan, where insurgent violence is worsening. The costs of pulling out of Iraq and building up in Afghanistan mean the price of the wars will remain high.

Total spending on the Pentagon and the wars would reach nearly $664 billion in fiscal 2010, if the plan is approved by Congress, up slightly from $656.3 billion in 2009.

The United States currently has 142,000 troops in Iraq and 38,000 in Afghanistan, according to the Pentagon.

HARD CHOICES

The budget brings the curtain down on the big growth in defense spending under the Bush administration but still gives the Pentagon an increase at a time of economic crisis.

Gates said the Pentagon fared better than had been feared.

"We've been given a little more space than I expected. I'm grateful for that but I still think we're going to have to make some hard choices," he said.

The administration anticipates big savings over the next few years in a number of areas, including defense spending.

But Gates said decisions about specific program cuts would not be made until shortly before a detailed budget is released in April.

Analysts say the F-22 fighter jet built by Lockheed Martin Corp, U.S. missile defense programs, a big Army modernization program led by Boeing Co, and a new Navy destroyer built by Northrop Grumman Corp and General Dynamics Corp are among the most vulnerable to cuts.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

The Obama administration has vowed to make military spending more transparent by taking predictable items out of the "emergency" supplemental requests for war funding and adding them to the Pentagon's regular budget.

Members of Congress complained that they had less time to scrutinize the emergency funding requests and that those requests included items not directly related to the wars.

"It presents a clearer picture of total U.S. defense spending," said Travis Sharp, military analyst at the Center for Arms Control and Non-Proliferation, a private think tank.

The overall defense budget, including war funding, jumped 78 percent from $387 billion in fiscal 2000, set before the Sept. 11 attacks, to $687 billion in fiscal 2009, the center said.

The new budget includes "placeholder estimates" of $50 billion in future years to pay for military operations.

Starting in fiscal 2010, the administration says, the military operations budget will include only incremental costs truly associated with the wars and not modernization projects such as F-35 fighter jets still under development by Lockheed, which the Bush administration had added to its war budgets. (Additional reporting by Andrew Gray; Editing by Patricia Zengerle)