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U.S. to Halt B-2 Program at 20 Planes : Defense: Bush decision could save $25 billion. Plan is a blow to Southern California, where Air Force had wanted 75 bombers built.

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TIMES STAFF WRITER

President Bush, facing pressure to make deeper defense cuts, has decided to terminate the B-2 bomber in a move that could provide long-term savings of as much as $25 billion to taxpayers, according to Administration officials.

The decision, expected to be formally announced in Bush’s State of the Union address Jan. 28, is a major concession to congressional opposition that had all but doomed the high-profile program.

It would also deliver a blow to Southern California, where the Air Force had wanted Northrop Corp. to build 75 of the bat-winged planes. The firm has 13,000 employees assigned to the B-2 program.

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The decision would not immediately kill the program, but would allow the completion of five more B-2 aircraft, bringing the total force of radar-eluding bombers to 20. The additional work means that there will only be modest short-term savings, since the Pentagon is expected to request funds in 1993 to bring the program to a close.

But officials expect the decision to help the Bush Administration demonstrate its recognition that with the demise of the Cold War, other domestic priorities have taken on greater importance.

“It’s a recognition of the different environment we’re in and the different requirements we have now,” an Administration official told The Times.

Ending production after only 20 planes would make the radar-eluding aircraft by far the most expensive ever built, driving the cost of each plane--including the program’s development--to more than $2 billion.

A Northrop spokesman declined to comment on the B-2 production cutbacks, saying: “We don’t know anything about it.”

The Los Angeles-based aerospace firm has 13,000 employees assigned to the B-2 program, and a recent UCLA study estimated that another 23,000 jobs in Southern California depend on the B-2. The loss of a project of that magnitude--whenever it occurred--would send shock waves through the Southland’s aerospace industry, deeply affecting suppliers and related businesses.

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A reduction of future production to just 20 aircraft would mean massive layoffs, but not necessarily immediately. The company has not substantially cut production even though the Air Force, which originally planned to build 132 of the aircraft, had scaled that number back to 75. Congress has approved funds for production of 15.

Northrop has braced itself, amid political uncertainty on the program. “Under the most pessimistic scenario currently contemplated--concluding the program at 16--we would have substantial revenues and operating profits from the B-2 program through 1994,” Northrop President Kent Kresa said last October in a report to shareholders.

For the Air Force, which had made the program one of its highest priorities, the early cancellation marks a bitter defeat. Knowledgeable government sources said that the service had proposed to scrap the bombers rather than accept the high cost of operating such a small number of the specialized planes.

But Bush directed officials instead to shift the focus of the program away from the plane’s original nuclear mission and to orient it more heavily toward conventional attack.

The President’s decision on the B-2 is only one of a number of key program cuts he is expected to make before the State of the Union address. Sources also said that further production of SSN-21 Seawolf attack submarines likely would be scuttled in the reductions, which are expected to reach as much as $70 billion over the next five years.

Defense Secretary Dick Cheney met Tuesday with Air Force Secretary Donald B. Rice and Air Force Chief of Staff Merrill A. McPeak to notify them of the President’s decision on the B-2.

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To date, Congress has approved $37 billion for the production of 15 production-models of the B-2 and a single version for testing purposes. Congress also has approved the purchase in advance of major components for another five B-2 aircraft. In Bush’s plan, production of the B-2 would cease after those aircraft have been completed.

The Air Force had estimated that it would cost another $28 billion to build 50 more aircraft. With the early shutdown of the B-2 production line, much of that projected expenditure would be saved.

Bush’s announcement would come just two months after Congress had denied the Pentagon the use of B-2 funds for the production of any additional bombers. A new congressional vote, set to be taken this spring, was to have determined whether the Air Force would be permitted to proceed with the program, using $1 billion to build a 16th bomber.

But with opponents vowing to deny the funds, the B-2’s political prospects have become bleaker than ever. Bush’s action thus would allow the President to salvage some political good will for the gesture before congressional opponents would be able to act to terminate the program.

The President’s decision also aims to win a final compromise from lawmakers, who would be asked to approve another several billion dollars to fill out the smaller force.

But while the Air Force proposed to scrap the smaller force, Bush--who has described himself as a fervent believer in Stealth technology--directed the Pentagon to explore expanded conventional roles for the B-2, including strategic reconnaissance.

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The B-2 was originally designed as a nuclear bomber that could sneak past elaborate Soviet air defenses and deliver nuclear warheads on highly defended Soviet missile fields. In more recent years, the Air Force has touted the aircraft’s ability to conduct conventional bombing missions as well. But with the collapse of the Soviet Union, and the resulting dismemberment of the Soviet Union’s vaunted air defense network, the rationale for the bomber program was dealt a serious blow.

Bush’s decision also is expected to plunge the U.S. arms control Establishment into confusion: Under the Strategic Arms Reduction Treaty--START--concluded last year with the Soviet Union, the B-2 bomber was to become what officials regularly described as the “centerpiece” of the U.S. nuclear arsenal.

On Capitol Hill, lawmakers have consistently complained of “sticker shock” at the program’s $65-billion price tag, and the plane’s disappointing performance in a recent test of its stealthiness have deepened the program’s political troubles.

In June, Rep. Les Aspin (D-Wis.), chairman of the House Armed Services Committee, declared that changes in the world have made 15 B-2 bombers a force adequate to the nation’s needs. A force of that size--armed day-to-day with conventional rather than nuclear weapons--would allow the Air Force to dispatch as many as 10 B-2 bombers to distant trouble spots at a moment’s notice, Aspin said.

Times staff writer Ralph Vartabedian in Los Angeles contributed to this story.

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