USA TODAY

For the dozen lawmakers tasked with producing a deficit-cutting plan, the threatened "doomsday" defense cuts hit close to home.

Defense Secretary Robert Gates released a $534 billion budget proposal Monday that would shift money from programs plagued by cost overruns to weapons and systems needed to fight wars in Afghanistan and Iraq.

One of the Air Force's top-of-the-line F-22 fighter jets crashed Wednesday in the high desert of Southern California, killing a test pilot for prime contractor Lockheed Martin Corp.

Government investigators concluded that the Pentagon did not properly safeguard classified aviation and weapons technology at facilities owned by BAE Systems for at least a two-year period.

President Bush, escalating his budget battle with Congress, on Tuesday vetoed a spending measure for health and education programs prized by congressional Democrats.

Legislators overwhelmingly approved $471 billion in military spending.

Lockheed Martin Corp., the world's largest defense contractor, said Tuesday that second-quarter earnings rose 34 percent on higher sales in most of its businesses, including fighter jets, missile defense and information technology.

House Democrats next week will introduce a $460 billion military spending bill they will use to challenge the war in Iraq, try to close Guantanamo Bay prison and increase oversight of defense contractors.

Because the U.S. Air Force is scaling back its orders of the stealthy F-22, selling the costly fighter to an ally could be the only way to keep producton from ending. Japan could be the only realistic buyer.

For thousands of workers in Georgia, Texas and California, the question of what aircraft Japan chooses to replace its aging fighter jet fleet could mean their jobs.

About $2 billion worth of Army and Marine Corps equipment from rifles to tanks is wearing out or being destroyed every month in Iraq and Afghanistan, military leaders and outside experts say.

Congress is poised to provide $70 billion more for military operations in Iraq and Afghanistan as it adopts a record $448 billion budget for the Pentagon.

The USA and Great Britain remain deadlocked over sharing stealth technology, more than a week after a top British official threatened to pull out of the multinational, $256 billion Joint Strike Fighter project.