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Controversial Marine Vehicle Axed in Defense Budget Cuts

The nation's budget crisis just hit the Pentagon.

U.S. Sailor standing on deck of a ship
Source: U.S. Navy
U.S. Sailor standing on deck of a ship

Defense Secretary Robert Gates told members of Congress Thursday that he will trim spending by more than $150 billion over five years, although some of those spending cuts will be reinvested in other areas.

Gates proposed reducing the Pentagon's overall budget by $78 billion.

Many of the cuts come from programs deemed unaffordable in the new fiscal reality of Washington, where lawmakers and the Obama administration are struggling to tame a federal deficit estimated to hit $1.5 trillion in 2011.

"We must come to realize that not every defense program is necessary, not every defense dollar is sacred and well-spent, and that more of nearly everything is simply not sustainable," Gates said.

Topping the list of cuts was a more than $10 billion Marine Corps amphibious project known as the Expeditionary Fighting Vehicle, manufactured by General Dynamics .

A landing craft designed to storm enemy beaches, the EFV can be launched by a Navy ship 25 miles over the horizon and ride ashore with its 30 millimeter m-k-44 chain gun blazing.

Shifting into land mode, it can drive like a tank 100 miles inland to deploy as many as 18 combat ready Marines. The Corps had said it wanted to buy more than 500 of the ship-to-shore assault vehicles, and they had hoped to deploy the first vehicles in 2016.

But the EFV had spent nearly 20 years in development, and critics said it was a waste of money because Marines haven’t stormed a hostile beach since the historic landing at Inchon during the Korean War. CNBC featured the EFV in our "Fleecing of America" report in November.

Also included in the Gates cuts, according to a Capitol Hill aide briefed on the details, will be Raytheon's SLAM-RAAM missile project, formally known as the Army’s Surface-Launched Advanced Medium Range Air-to-Air Missile.

And Lockheed Martin's F-35B fighter jet will be placed on a two-year probationary period, meaning the contractor has two years to justify the airplane's reliability, otherwise it will be killed, the aide said.

Finally, Gates told lawmakers he wanted to raise fees in the military health insurance program, known as Tricare. Gates plans to increase fees for working retirees as a cost savings measure.

Watch Eamon Javers' original video report about the EFV here and look for more stories on-air and online from Javers and other CNBC correspondents in our continuing "The Fleecing of America" series.

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