Secretary of Defense Robert Gates's push to change how the Defense Department sets its strategic and spending priorities faces its next major test in Congress Thursday, and Gates is heavily involved in seeing it through behind the scenes.

"The attacks of September 11th, 2001, opened a gusher of defense spending that nearly doubled the base budget over the last decade, not counting supplemental appropriations for the wars in Iraq and Afghanistan. Which brings us to the situation we face and the choices we have today -- as a defense department and as a country," Gates said in a May 8 speech at the Eisenhower Library in Abilene, Kansas. "Given America's difficult economic circumstances and parlous fiscal condition, military spending on things large and small can and should expect closer, harsher scrutiny. The gusher has been turned off, and will stay off for a good period of time."

There's a torrent of speculation that Gates will leave office early next year (he's only said he will reevaluate at years' end), and Gates has been giving a series of speeches leveling harsh criticisms of the way the United States goes about organizing and funding its national security infrastructure. Given the entrenched interests on Capitol Hill, within the military, and in the wider defense community, it's the kind of initiative only an official with unassailable credibility and the freedom of not worrying about his next job can pull off.

Gates successfully won his first battle with Congress, ending production of the F-22 fighter, through a mixture of public and private moves that showed his deft ability to play both an inside and an outside political game.

His next big battle kicks off tomorrow, when lawmakers will try to thwart Gates's effort to rein in the other major fighter program, the F-35, by finally canceling plans to build a second engine model for the plane.

Every year, successive administrations have submitted budgets without the engine funding, while lawmakers add about $500 million to build a second engine for the F-35. And every year, Congress has won, getting the funding approved and avoiding a veto. This year could be different.

Gates is serious about this year's veto threat. He deployed Ashton Carter, the under secretary of defense for acquisitions, to the Hill today to make the case privately behind the scenes. Carter is arguing for an amendment (pdf) put forth by House leadership member John Larson, D-CT, Chellie Pingree, D-ME, and  Rep. Tom Rooney, R-FL, that would strip the bill of the funds.

Gates is expected to send a letter in support of the amendment Thursday when the bill hits the House floor.

It's an oversimplification to say that Gates wants to cut the overall level of defense spending. His chief ambition is to cut waste and compel each service to find areas to bring down their costs. "This can only work if the services are incentivized to cut costs, they can keep what they catch," said Pentaon spokesman Geoff Morrell.

But this latest initiaive dovetails with Gates other main initiative, to rebalance military spending toward the current conflicts, which necessarily means more pressure on the budgets of the Air Force and the Navy.

The F-35 program, which has been years delayed and billions over budget, is at the top of his target list for cuts.

"Is it a dire threat that by 2020 the United States will have only 20 times more advanced stealth fighters than China?," Gates asked in the speech. "These are the kinds of questions Eisenhower asked as commander-in-chief. They are the kinds of questions I believe he would ask today."

It's very plausible that Congress will ignore Gates's plea and send the bill with the F-35 engine money in it to Obama, daring him to make himself a target by vetoing a national-security bill. But Gates is laying down political cover for the president on this one, making a public case for the cuts while simultaneously working behind the scenes.

"What is required going forward is not more study. Nor do we need more legislation. It is not a great mystery what needs to change. What it takes is the political will and willingness, as Eisenhower possessed, to make hard choices -- choices that will displease powerful people both inside the Pentagon and out."

When Barack Obama met briefly with Japanese Prime Minister Yukio Hatoyama on the sidelines of last month's nuclear summit, he asked the Japanese leader to follow through on his promise to resolve the U.S.-Japan dispute over relocating the Marine Corps base on Okinawa.

But as Hatoyama's self-imposed May deadline approaches, it doesn't look like the prime minister is going to be able to deliver, and some Japanese lawmakers are now going public with their criticism of the way the Obama administration has handled the issue.

One of them is Kuniko Tanioka, a member of Japan's upper house of parliament and the ruling Democratic Party of Japan, and a close advisor to Hatoyama. During a visit to Washington Tuesday, Tanioka leveled some of the harshest criticism from a Japanese official to date of the Obama team's handling of the Futenma issue, which is still unresolved despite months of discussions.

"We are worried because the government of the United States doesn't seem to be treating Prime Minister Hatoyama as an ally," she told an audience at the East-West Center. "The very stubborn attitude of no compromise of the U.S. government on Futenma is clearly pushing Japan away toward China and that is something I'm very worried about."

Some Japan hands in Washington see Tanioka as marginal, a left-wing backbencher who just recently entered Japanese politics in 2007. But she is close to Hatoyama and serves as the "vice manager" for North America inside the DPJ's internal policy structure.

At issue is a 2006 agreement between the Bush administration and the former Japanese government run by the Liberal Democratic Party. That agreement would have moved the Futenma Air Station, which sits in the middle of a populated area of Okinawa, to a less obtrusive part of the island.

Hatoyama and the DPJ campaigned on the promise to alter the plan but ran into a wall when U.S. officials initially insisted the old agreement be honored, even though the old government had been thrown out.

Since then, Pentagon and State Department officials have been conducting quiet negotiations, but the administration is still waiting for the Japanese side to propose a detailed alternative to the current plan.

Meanwhile, huge protests in Okinawa have constrained Hatoyama's room for maneuver -- and Tanioka said the United States was partly to blame.

"It seems to us Japanese that Obama is saying ‘You do it, you solve, it's your problem,'" she said, noting that public opinion polls in Japan show increasing dissatisfaction with the presence of U.S. military forces there.

Obama should have granted Hatoyama a bilateral meeting during the recent nuclear summit if he is really concerned about Futenma, she said, not just a passing conversation at dinner.

"If it is such a serious problem, then he should have sat down. If it's not so serious of a problem, he should say so."

Administration officials have also said repeatedly that they are willing to consider adjustments to the current Futenma relocation plan, but it has to be "operationally feasible," meaning it meets Marine Corps needs, and "politically feasible," meaning that the Japanese host communities can go along.

Therein lies the problem, according to Tanioka, because, she says, "There is no politically feasible plan."

"Washington works under the assumption the original plan was feasible. It was not," she said.

While Tanioka acknowledges that Hatoyama and the DPJ have made some mistakes, especially in dealing with the media, she suggested that now the security relationship itself could be in danger.

"It's getting much worse than I expected," she said. "They are going to start saying ‘all bases out,' not only the Marines."

As if the endorsement of Defense Secretary Robert Gates weren't enough, the development community has rounded up 50 senior retired military officers to support its drive to shift money and authorities from the Pentagon to Foggy Bottom.

"While our military power can provide the logistics and organizational support to help those in need in times of humanitarian crisis, as demonstrated by our current efforts in Haiti, it can only help create the conditions necessary to allow the other tools of statecraft - our diplomatic, development and humanitarian programs - to effectively address these issues," reads a letter to Congress organized by the U.S. Global Leadership Coalition, a network of more than 400 businesses and non-governmental organizations.

The group is trying to protect the president's $58.5 billion fiscal 2011 budget request as it winds its way through the legislative process. That's the biggest request ever for foreign operations and international assistance, but in this time of fiscal peril, lawmakers are expected to try to use that part of the budget request to fund other priorities.

Among the letter's signatories is retired Gen. Michael Hagee, who was commandant of the U.S. Marine Corps from 2003 to 2006, and retired Adm. James Loy, commandant of the U.S. Coast Guard from 1998 to 2002. Hagee and Loy sat down Tuesday morning to explain their activism on behalf of the diplomatic and development community to The Cable.

Hagee said the letter is remarkable because it represents the opinions of "50 retired three-and-four-star good-old boys," who have seen first-hand the military's encroachment upon traditional development issues, which was unavoidable but now needs to be addressed.

Many have expressed doubt that the State Department has the capacity to take on these missions, such as managing foreign military training or supervising crisis money disbursement.

"But you can't get the capability and the capacity unless you get the resources," Hagee explained.

Loy said the military officials represent a broader swath of senior officers that agree with Gates's pledge to rebalance the tools of American statecraft because using the military to do development is just not the right way to do business.

"Our collective experience from lots of time in uniform and in very significant positions around the world in military jobs have convinced us that the notion of American influence has to be dealt with in multiple ways," he said.

We're hearing that Congress is planning to take up the fiscal 2011 State Department and foreign operations budget bill in May.

When top Obama administration officials went to Beijing last week, they had a broad agenda for discussion, including Iran, climate change, and North Korea. What did the Chinese want to talk about? Taiwan, Taiwan, and Taiwan.

Several China experts close to both sets of officials said that Deputy Secretary of State James Steinberg and National Security Council Senior Director Jeffrey Bader went to China with the understanding that they would have substantive discussions on some key issues of U.S. interest, but the Chinese side used the opportunity to try to bargain for an end to U.S. arms sales to Taiwan, something Beijing has wanted for decades and now feels bold enough to demand.

"It was all about Taiwan," said Bonnie Glaser, senior fellow at the Center for Strategic and International Studies (CSIS), "The message that the Chinese are giving us is ‘We've had enough; we're fed up. We've been living with this issue of U.S. arms sales for too long and it's time to solve it.'"

The Obama team has been noticing increased confidence on the Chinese side when dealing with the United States, and some officials see that as partly a result of the rise of hard-liners within the Chinese system who advocate a tougher stance toward Washington.

But asking the Obama administration to end Taiwan arms sales shows a profound misunderstanding of U.S. foreign-policy decision making, several experts said.

"Do they really think they have a chance in hell of ending our arms sales to Taiwan? I find that shocking, but that's what they're telling us," Glaser said of the Chinese. "I can't imagine why they think that U.S. interests have somehow changed on this issue. Ultimately that's why we sell them, because it's in our interest, not to piss off China."

Charles Freeman, who holds the Freeman Chair (no relation) in China Studies at CSIS, said the Chinese are trying to raise the price of their cooperation on Iran and other issues by bringing up their long displeasure over the Taiwan arms-sales issue.

"There is a strong push from Beijing to get that core issue as their big ask and there's a desire to reopen discussions about what a plan to eliminate arms sales to Taiwan would look like," he explained. "There is some sense that we can trade Iran for Taiwan, but that's a non-starter for the Obama administration. The Chinese don't seem to understand that."

Meanwhile, although the Obama administration moved forward, eventually, with the Bush administration's left over deal to sell Taiwan some arms, the White House declined to see Taiwan any F-16 aircraft as part of the recent $6.2 billion arms sales package.

Some China watchers fear that the Obama administration is cementing a custom by which the U.S. continues to sell some arms to Taiwan while simultaneously ignoring the ongoing decline of the island's actual defense capabilities in the face of massive and increasing Chinese deployments across the Taiwan Strait.

That's the implication of this recent unclassified report by the Defense Intelligence Agency to the Office of Secretary of Defense Robert Gates, which outlines how Taiwan's air defenses, which are dependent on U.S. equipment, are old and eroding quickly.

Of course, it was the Bush administration that first decided to remove the F-16s from the package of arms being sold to Taiwan and actually refused to accept a letter requesting the planes, experts note. But Obama's decision to continue the practice is seen by many as directed more at maintaining a delicate relationship with mainland China than it is on any analysis of Taiwan's security posture.

"Decisions are being made solely on the basis of what would least provoke China, not on the basis of what Taiwan would actually need to defend itself," said former Pentagon China official Dan Blumenthal, now with the American Enterprise Institute. "In deciding in effect that Taiwan does not need the aircraft, they are deciding Taiwan doesn't need an air force, which puts both U.S. and Taiwan air defenses at greater risk."

Taiwan is nowhere close to ending its lobbying effort to buy the newer F-16 planes. Defense News¸ which first highlighted the DIA document, reported today that Taiwan's defense ministry is releasing a new study claiming Chinese fighter superiority. Several Taiwanese lawmakers wrote to House and Senate foreign relations leaders to ask for a follow-on sale of F-16 fighters.

"If America softens its support for our country at this critical time we believe it will have an adverse effect on cross-Strait relations as Taiwan's negotiating position is weakened and the PRC may then seek to capitalize on our situation," the letter stated.

The sale of newer F-16s to Taiwan, the "C" and "D" versions, is also part of a larger drive to keep the production lines open for the plane. The major advocates are from the Texas and Georgia delegations, whose states stand to benefit most. Since the F-16 is also in the hunt for new sales to India, those with an interest there would also be inclined to make sure the line doesn't close.

"At some point this year, the F-16 supply chain will begin to shut down as there are no new orders and the U.S. and its allies switch to the F-35," said one Washington Asia hand. "Once this happens it is cost-prohibitive to restart the line. This industrial time constraint will force the political decision either to sell the aircraft to Taiwan or not. If no, for all intents and purposes the island will have no real means of defending its airspace."

It's somewhat conventional wisdom in Washington to assume that if Taiwan moves closer to China, that might not be in the interests of the United States. Not so, argues a new report coming out Tuesday from the Center for Strategic and International Studies.

What's more, the U.S. should encourage such movement, argues the report, a result of a cross-strait project led by CSIS's Bonnie Glaser that she and others will discuss at an event at the think tank Tuesday. Now is the right time for confidence building measures between China and Taiwan, despite the several internal and international obstacles that remain, the report explains.

"U.S. support for cross-strait military CBMs is consistent with the long-standing U.S. position that differences between the two sides of the strait should be settled peacefully through negotiations," the report states. The authors also talk about the belief in Taiwan "that talks with Beijing on military CBMs cannot begin without visible support from the United States, which many in Taiwan see as necessary to reduce Taiwan's sense of vulnerability and counter the impression domestically that [Taiwanese President] Ma [Ying Jeou] is tilting toward mainland China."

In an interview, Glaser said that privately, the Taiwanese are calling for more public support from the Obama administration across the board, in order strengthen their hand vis-à-vis Beijing. President Ma has made some significant movements toward rapprochement, but now faces pressure to reassert Taiwanese autonomy, according to Glaser.

"Taiwan is saying to the Obama administration, we need more visible signs of support," she said, "Although the U.S.-Taiwan relationship is strong in the military arena, it's not visible."

Similarly, President Obama had focused on the Chinese side of the equation, delaying a pending sales package to Taiwan until after his administration's relationship with Beijing could be set on a secure footing. Now, following his trip there, the White House is expected to go ahead with the sale as well as other actions that are likely to rile the Chinese Communist Party, such as meeting with the Dalai Lama.

"The Obama administration has got the message that Taiwan wants more. The administration's plan is to do more."

Were you keeping a list of senior GOP lawmakers who are weighing in to oppose the potential French sale of the Mistral-class amphibious assault ship to Russia? If so, add Indiana Senator Richard Lugar to that list.

Lugar, the top Republican on the Senate Foreign Relations committee, released a report Tuesday that calls on NATO to take a lead role in coordinating security assistance to Georgia, the culmination of a staff project that included a trip to Tbilisi in late October. The report's conclusions are stark in terms of Lugar's view on how Georgia is faring one year after the Russian invasion.

"As a result of Russian diplomatic pressure and threats to restrict commercial ties with entities selling defense articles to Georgia, the Georgian military has been unable to replenish much of its military capacity that was eviscerated in the war," the report reads.

The last tranche of U.S. post-war assistance to Georgia, $242 million to round out the $1 billion commitment, was notified to Congress in December and went through without objection. The report highlights that the Obama administration decided not to use any of that money to shore up Georgia's lethal capabilities.

"The United States, under substantial Russian diplomatic pressure, has paused the transfer of lethal military articles to Georgia, and no U.S. assistance since the war has been directly provided to the Georgian Ministry of Defense. Consequently, Georgia lacks basic capacity for territorial defense."

Lugar argues that Georgian military weakness increases the risk of armed conflict by pinning the Georgians into a desperate position and raising the possibility of conflict-starting miscalculations.

Despite the unfortunate headline in this otherwise strong Associated Press article, Lugar is not calling on NATO to arm Georgia, exactly. His more nuanced view is that NATO must establish a leadership role in maintaining the security balance in the Caucasus, which is tipping more every day toward the Russian advantage.

That's where the French sale of the Mistral comes in. Several senior GOP lawmakers have come out strongly against the potential sale of the ship, introducing bills and writing letter focused on strategic or tactical concerns.

Lugar's concern is more of a diplomatic one, and it relates to the integrity of NATO as much as the security of Georgia. He references the possible sale of the Mistral specifically.

"Failing a coordinated, NATO-led strategy for security assistance in the region, allies run the risk of disturbing an already fragile political balance and engendering an excessive nationalization of Georgian defense policy."

It remains to be seen if NATO will embrace the role of coordinator for security for Georgia, especially since Georgia seems as far away from NATO membership as ever. But regardless of whether Georgia get in or stays out, NATO is going have stake in Georgian security issues from now on and Lugar's point is that should include ensuring NATO allies don't take unilateral measures to upset the military balance.

U.S. Centcom commander Gen. David Petraeus said last week that the United Arab Emirates, a key U.S. ally in the Persian Gulf, has the capability to overpower Iran's Air Force.

"The Emirati Air Force itself could take out the entire Iranian Air Force, I believe, given that it's got ... somewhere around 70 Block 60 F-16 fighters, which are better than the U.S. F-16 fighters," Petraeus said during remarks at a recent conference put on in Bahrain by the International Institute for Strategic Studies. 

In a related development, the new nuclear agreement between the U.S. and the UAE entered into force today, with the signing ceremony presided over by Under Secretary of State for Arms Control Ellen Tauscher and UAE Ambassador Yousef Al Otaiba.

"In today's world, we must find ways to meet the demand for clean energy and to recognize the right that all nations have to pursue the peaceful use of nuclear power. But we need to achieve this balance without increasing the risk of the proliferation of nuclear weapons and material," Tauscher said.

She praised the UAE for agreeing to import nuclear fuel, rather than producing it through reprocessing or enrichment. Tauscher also praised the UAE as a partner in the drive to prevent Iran from acquiring a nuclear weapon.

The agreement, often referred to as the 123 agreement, provides for transfers of nuclear technology and knowhow to the UAE in exchange for its commitment to nonproliferation standards. (Meanwhile there are still concerns that members of the ruling family of Ras Al Khaimah in the UAE are actually facilitating illicit weapons transfers to Iran.)

President Obama sent the agreement to Congress in May. It was negotiated and signed by the previous administration.

When President Obama spoke to troops at Alaska's Elmendorf Air Force Base last month, the unit there parked a shiny new F-22 fighter plane in the hangar. But according to multiple sources, White House aides demanded the plane be changed to an older F-15 fighter because they didn't want Obama speaking in front of the F-22, a controversial program he fought hard to end.

"White House aides actually made them remove the F-22-said they would not allow POTUS to be pictured with the F-22 in any way, shape, or form," one source close to the unit relayed.

Stephen Lee, a public affairs officer at Elmendorf, confirmed to The Cable that the F-22 was parked in the hangar and then was replaced by an F-15 at the White House's behest.

The airmen there took offense to the Obama aides' demand, sources told The Cable, seeing it as a slight to the folks who are operating the F-22 proudly every day. They also expressed bewilderment that the White House staff would even care so much as to make an issue out of the fact that the F-22 was placed in the hangar with the president.

A White House official, commenting on background basis, told The Cable that yes, there were discussions about which plane or planes would be in the hangar, but that they were not meant as an insult to the pilots and other personnel who work on the F-22. The official couldn't elaborate on why the White House aides felt it necessary to get involved in the matter in the first place.

The official pointed to Obama's speech to the troops that day, where he praised both the 90th Fighter Squadron, known as the "Dicemen," and the 525th Fighter Squadron, the "Bulldogs," both of which operate the F-22.

Even so, the Air Force personnel thought it odd the White House wanted to display the older plane rather than the more advanced plane that, in the eyes of its supporters, represents the latest and greatest in American aviation.

The Obama administration fought hard and successfully to cut off production of the F-22 at 187 planes, a number Defense Secretary Robert Gates endorsed but that was hundreds less than originally planned and about half of the 381 planes Air Force leadership lobbied hard for in the years preceding Obama's inauguration.

"It's one thing to be against further production; quite another to slight the folks who are flying them in the operational world," one source said, adding that "the F-15 pictured was put into service roughly around the same period when Obama graduated from college. It's vintage."

As President Obama gets ready to roll out his new Afghanistan-Pakistan strategy, some leading Democrats are focusing on the cost of the pending troop escalation. But they are unlikely to apply actual legislative pressure on the White House to find the money.

The debate was heightened by the introduction of a bill by House Appropriations Chairman David Obey, D-WI, and John Larson, D-CT, a member of the House leadership, that would impose a 1 percent surtax on most Americans to pay for the wars.

But as with most bill introductions in Congress, House leadership has no plans to actually move the bill and most insiders recognize it as a way for those Democrats who oppose escalation to stake out a semi-critical posture while also seeming to be fiscally responsible.

"That's a message bill, not one we will pass," one very well placed Democratic source told The Cable.

Congressional Quarterly has also reported that defense appropriations subcommittee Chairman John Murtha, D-PA, acknowledged that "he knew the bill would not be enacted and that advocates of a surtax were simply trying to send a message about the moral obligation to pay for the wars."

Rough estimates put the cost of any escalation at about $1 million per added troop, per year. Obama is expected to announce Tuesday the deployment of 30,000 new soldiers and Marines, which would make the price tag at least $30 billion in 2010, in addition to the ongoing costs of fighting the wars with currently deployed resources. 

The Obama administration pledged upon taking office to move to "honest budgeting" for the wars in Iraq and Afghanistan and did include war costs as part of its formal fiscal 2010 budget request. But that request, around $130 billion, will be insufficient to pay for war operations this fiscal year and a supplemental spending bill is expected in early Spring.

The White House also placed a $50 billion "placeholder" in its budget projections for fiscal 2011 and beyond, a figure nobody believes is enough to keep the war machine humming, no matter what new strategies are announced. So the Obama administration's promise to pay for the wars was doomed to be broken even before a troop escalation was contemplated.

White House spokesman Robert Gibbs told reporters Monday that there would not be a "lengthy discourse" on how Obama intends to pay for his new strategy in his speech Tuesday at West Point.

"I think the president will... elude to the cost. I don't know if it gets down to the granularity of the exact dollar amount for each and every thing," Gibbs said, "Some of that's going to depend on logistical decisions that are ultimately made."

More broadly, Obey has not been shy about his skepticism about a continued U.S. commitment to Afghanistan. When giving the money for fiscal 2010, he went out on a limb and warned that he might not be willing to support funding for the wars if progress wasn't shown in one years' time. Those comments were widely criticized.

Undersecretary of State for Arms Control and International Security Ellen Tauscher is in India today, meeting with counterparts before heading to the Czech Republic and Turkey.

She will talk missile defense in the Czech Republic and non-proliferation in Turkey, her spokesman said. The Czechs could have a new role in the administration's reformed scheme for missile defense, in light of the changes announced to the previous plan to deploy interceptors in Poland and advanced radar in the Czech Republic, what was termed the "third site." In India, Tauscher will lead a dialogue on non-proliferation.

Tauscher previewed her trip and talked about the status of missile defense plans and other strategic initiatives at the George Washington University on Tuesday. Primarily, she rejected the contention that the administration had abandoned Polish and Czech missile defense plans. Both countries have been offered alternative ways to participate in missile defense going forward, she said.

"We didn't abandon the third site," Tauscher said. "We already have two sites that protect the United States from the emerging Iranian long-range threat," she added, referring to existing sites in California and Alaska.

Aegis ships with SM-3 missiles will be deployed in the Mediterranean Sea and will be able to protect southern Europe by 2011, with land based SM-3 missiles "in a NATO-ized system" by 2015.

"The idea of putting a third site with a redundant capability in Poland to protect us against a threat that wasn't emerging as we expected, and have us naked now [to shorter range threats]... I thought it was crazy."

Back at home, Tauscher is preparing for two major efforts, to get the Senate to ratify follow on the Strategic Arms Reduction Treaty (START) treaty and to seek ratification of the Comprehensive Test Ban Treaty. Both pushes are slated for early next year.

She expressed confidence that the administration would be able to secure a START follow on by the time the current treaty expires on December 5. Negotiations with the Russians in Geneva are being led by Assistant Secretary of State Rose Gottemoeller and are ongoing.

Senate Republicans have been somewhat open to supporting a START follow on, if certain concessions are met, but on CTBT leading GOP lawmakers such as Jon Kyl, R-AZ, are promising a fight.

"The CTBT will be very difficult to ratify. The opposition still remembers why they opposed it back in 1999, some of them are still in the Senate," she said, "And we still have a lot of people that don't know why they would be for it because there are 40 senators that have never voted on a treaty."

She said there is a "grand bargain" to be struck with regard to CTBT, which will include reassuring people that the nuclear arsenal is safe and secure even without testing. The Nuclear Posture Review will come out in January or February, she said, and the fiscal 2011 budget will come out around the same time.

Tauscher reiterated that the Reliable Replacement Warhead, a Bush administration program to build a new class of nuclear weapons, would not be in the 2011 budget. She said the Bush administration did a poor job explaining the program, giving the wrong impression to other countries.

"We had to kill it to save it," she said, explaining that it will be replaced with a nuclear stockpile modernization program, which will increase reliability and confidence in the current stock of warheads.

President Obama has nominated Erin Conaton, the staff director of the House Armed Services Committee, to be the number two official at the Air Force.

If confirmed, Conaton would have a premier role in shepherding the Air Force through an extremely tumultuous time. As undersecretary, she would have a leading role in guiding the Air Force's interactions with Congress and would be involved in several of the major acquisitions issues the service is currently embroiled in.

"Erin is a good person who will be assuming a very tough position," said one Air Force insider, "Her connections to [Chairman Ike] Skelton will really help the Air Force, but she is taking on a heck of a challenge considering all the problems facing the service."

The Air Force has been on the losing side of some high profile inter-government battles as of late. They lost their bid to continue production of the F-22 fighter jet (although their official position was that they agreed with Obama's decision to end production of the plane).

The Air Force is also currently involved in budget negotiations with the Office of the Secretary of Defense over the fiscal 2011 program. Their F-35 fighter program, the largest system in their portfolio, could face cuts in light of over overall pressures and Defense Secretary Robert Gates' push to rebalance priorities toward more irregular and non-conventional capabilities.

The $100 billion Air Force program to replace its fleet of aerial refueling tankers is also in a state of somewhat limbo after two failed attempts to award the contract. The Air Force is also still pushing to get a new bomber and several other items that will be tough sells in this constrained budget environment.

No confirmation hearing has yet been scheduled.

For the protocol-obsessed Japanese, scheduling a cabinet-level meeting and then canceling it is a rare occurrence. But that's exactly what happened today when the State Department had to withdraw its announcement that Secretary of State Hillary Clinton would meet Friday with Japanese Foreign Minister Katusya Okada.

The diplomatic SNAFU is emblematic of the shifting ground underneath the U.S.-Japan alliance. The Democratic Party of Japan (DPJ), which took over the government in September, campaigned on a pledge to reform relations with the U.S., but now in power, they are battling internally to determine how far and wide those changes should go. The latest twist certainly won't dampen the view of those who've proclaimed a "crisis" in the U.S. relationship with Japan since the elections; a State Department official told The Cable that Clinton was still holding time in her Friday schedule, just in case Okada is able to make the trip.

Reports out of Japan suggest that Okada wanted to secure a deal on his pet issue, the Futenma air base in Okinawa, ahead of President Obama's trip to Tokyo next week. But Okada is being reined in by Japanese Prime Minister Yukio Hatoyama, who doesn't want Okada gallivanting around making policy while the issue is still a matter of intense internal discussion within the Japanese government.

And both sides are trying to recover from a tumultuous couple of weeks in the relationship following the Tokyo visit of Defense Secretary Robert Gates, who was seen as focusing too much on Futenma, a minor issue for the U.S. but a major emotional hot button for the Japanese.

More broadly, the center of gravity in the U.S.-Japan relationship may be shifting from the Defense Department to the State Department. While Okada might have wanted to focus on Futenma, administration sources said that Clinton's goal was much broader. She wanted to start engaging the new Japanese leadership on a larger set of strategic issues, from Afghanistan to China and everything in between.

The agenda shows the Obama administration's desire to focus less on incremental military issues such as military basing and start bringing the discussion with the new Japanese government around to larger strategic issues. But the Obama administration is unable to advance the conversation due to the ongoing foreign policy fight within the Japanese cabinet.

Hatoyama is refereeing a complex battle between various elements of his party and his cabinet over the direction of Japanese foreign policy, especially with regard to the U.S.-Japan alliance. Okada's interests may lie in making things for Hatoyama as difficult as possible, hence the (maybe) cancelled trip.

Inside the Japan policy infrastructure in Washington, the officials in charge of managing the relationship are taking a two pronged-approach. The first element of their strategy is "wait and see," letting the new DPJ government settle internal disputes and then come to the U.S. side with policy positions, negotiating stances, and the like.

The second part of the approach is "Don't blink," meaning that the U.S. interlocutors are trying to avoid overreacting to what some see as antagonistic or contradictory statements on the alliance coming out of different DPJ leaders. Also, the U.S. managers are determined not to negotiate away any of their positions while the new Japanese government is going through its growing pains.

"We're waiting for them to give us some indication of where they see the path as leading from here," said one senior U.S. official dealing with the U.S.-Japan alliance.

There is also a feeling among Obama administration Japan managers that the reports about the "crisis" in U.S.-Japan relations have been way overblown and that while a number of issues in the alliance are now up for discussion, which is new, that is not necessarily a bad thing.

"You can take any of this stuff and make a story out of it, but none of these issues are unmanageable," the official said, "The U.S. and Japan still rely on each other in a lot of fundamental ways."

The official said that there is a pretty clear path out of the current tense situation, whenever the Japanese are ready to take it. For example, on the issue of the plan for the relocation of the Futenma air base, U.S. officials believe that ultimately there is no real alternative to the current plan. Okada's idea, to combine Futenma with the Kadena air base, is seen as a non-starter inside the Obama administration.

However, there are "sweeteners" that could alleviate some concerns of Okinawa residents and allow Hatoyama and Okada to save face by claiming they got concessions before ultimately accepting the bulk of the current plan as is.

But the talks between the United States and Japan haven't gotten to that stage and probably won't by the time Obama visits Tokyo next week. Obama himself is said to be too far above the issue to negotiate such details and is likely to simply affirm the strength of the alliance, mark its 50^th anniversary, and leave the negotiations for lower officials to resume after the trip.

Traditionally, the Japan relationship inside Washington more heavily managed by the Defense Department as compared to relations with other countries. There are historical and logistical explanations for this phenomenon, but with new administrations on both sides, a change might be in store.

At the National Security Council, the Japan policy is managed by Jeffrey Bader, a former Ambassador and senior State Department official and Daniel Russel, former State Department Japan office director.

At the State Department, Assistant Secretary Kurt Campbell is in charge of all things Japan, aided by Japan desk chief Kevin Maher. Campbell has been back and forth to Tokyo several times since assuming his post and is scheduled to stop in Tokyo on Thursday on his way home from Burma.

The Japan team at the Pentagon is centered around Assistant Secretary Gen. Chip Gregson, Principal Deputy Derek Mitchell, Deputy Michael Schiffer, and Japan desk officer Suzanne Bassala.

Photo: Pool/Getty Images

Much ado was made last month about the reported rift between U.S. Ambassador to Iraq Chris Hill and the top U.S. military commander in Baghdad Gen. Ray Odierno, a rift that Hill strenuously denied.

But a real policy dispute lies at the heart of the story, senior diplomatic and military sources in Baghdad tell The Cable. Increasingly, the two men are said to differ over the proper American role in Baghdad, specifically with regard to how heavy a hand the U.S. should apply in trying to influence the decisions of the Iraqi government led by Prime Minister Nuri al-Maliki.

The clashing approaches speak to both the institutional culture of the two organizations and their different view of U.S. priorities and interests during this critical time of pullback in the U.S. presence in Iraq, the sources said. "State has a respect for sovereignty and institutional relations," one official explained. "DOD is much more activist and hands on in pretty much every area. Their attitude is if there's a problem you get in there and do what you can to fix it."

The current dispute between the two camps centers around how involved the U.S. should be in the Maliki government's coalition politics ahead of Iraq's January 2010 elections, an event that has Middle East hands worried after the Iraqi parliament again failed Monday to pass a crucial law that would govern the polls. The U.S. government has hinged the entire redeployment strategy around the elections law, one government official working on Iraq in Washington said, warning that if it the process drags on, the withdrawal of U.S. troops will have to be correspondingly delayed.

Maliki has assembled a wide coalition for the upcoming poll. But according to reports, Iraq's lower house of parliament, the Council of Representatives (COR), might remove members of the Independent High Election Commission or withdraw its vote of confidence in the body at the prime minister's behest -- a move that military officials want to try to forestall.

But because the State Department places a high priority on holding the January elections on time as a precursor to fulfilling President Obama's withdrawal timeline, the embassy favors a more hands-off approach, and the White House is said to agree.

"State believes it would be fraught with danger to intervene on these COR decisions, and yet at the same time, it is equally dangerous if the COR decides to remove IHEC officials so close to the election," one senior military source in the region said, arguing that State's concerns about the Jan. 10 election date slipping are overblown.

A senior diplomatic source in Iraq responded by presenting the issue of U.S. involvement in Maliki's dealings as a balance between risk and reward.

"To what extent do we try to pick winners? What are the risks of that? How have we fared in the past with such an approach? This is not so much a civil-military problem, but it does go to the heart of how to disengage," the source explained. "Subtly versus with a heavy hand, could well determine what kind of partner we might have in Iraq."

The source also said State is very involved in the COR processes, including having embassy officers in every meeting and exerting influence when appropriate, such as in prodding individual members and suggesting solutions to get around impasses. "We are on it like the proverbial Iraqi carpet," the source said.

Clash of civilizations

Maliki alluded to the controversy in his remarks Monday after meeting with President Obama, saying that the two had "discussed the issue of the elections and the importance that these elections be held on time based on the national principles."

But the elections aren't the only issue in dispute, some Iraq experts say, pointing to the several outstanding issues between the Maliki government and both the Sunni and Kurdish communities as additional examples of how the State Department wants to disengage from Iraq at a faster pace than the military there.

"The question is, in this period of transition: What are the few things we really need to get traction on, and how much leverage do we have to do that?" said Sam Parker, an Iraq expert at the U.S. Institute of Peace. "It's about how much you should get involved."

Major disputes still exist between the Maliki government and the Iraqi minority communities over such things as the status of the city of Kirkuk, the distribution of oil profits, and payments to former Sunni insurgents who have been persuaded to lay down their arms.

"Odierno continues to believe that the Sunni community depends on the U.S. to defend them against the Maliki government," said one Washington Iraq expert. "State doesn't believe that the U.S. military should play a significant role in any of that."

Stephen Biddle, a senior fellow at the Center on Foreign Relations, said that part of the dispute was a lack of agreement on the trustworthiness of Maliki.

"The key question is, What model of Maliki's motivations do we use as we make policy?" said Biddle. "As long as it's at least an open possibility that he's opportunistic or trying to consolidate power in his office in an unnatural way, either one of those implies increased U.S. engagement."

Some Iraq experts defend State's approach as the most pragmatic and realistic way to acknowledge the fact that the Americans are leaving Iraq.

"The Defense Department has to come to terms with the fact that its influence is waning there," said Marc Lynch, director of the Institute for Middle East Studies at George Washington University.

"Sure, Chris Hill isn't doing as much on a personal level as [previous U.S. ambassador] Ryan Crocker did, but it's not clear that he should be," said Lynch. "The surge improved things militarily, but the political problems remain and those will have to be solved by the Iraqis. There is little we can do about it at this point."

The Senate Intelligence Committee's ranking Republican, Kit Bond, R-MO, calls into The Cable to give some insider details on the Afghanistan strategy briefing he attended at the White House just now.

The meeting was heavy on strategy, light on specifics, and generally had a positive and bipartisan tone, Bond reports. His main takeaway was that Obama pledged not to return to a counterterrorism approach, where troops "shoot and then fall back to the base," Bond said.

Obama told the lawmakers that "nobody on his team was proposing that," Bond reported, which lawmakers took to mean that the president was leaning toward a strategy heavily focused on counterinsurgency, which is of course more manpower intensive.

And though Obama didn't reveal whether or not he will approve Gen. Stanley McChrystal's request for up to 40,000 more troops, the president did talk about the need for Congress to quickly approve additional funding quickly if and when more troops are sent over there.

"If he provides more troops, we are going to need more resources," was the message the White House was sending, according to Bond, who interpreted that to mean another supplemental funding bill could be in the offing.

Bond's message to the president was similar to that of Sen. John McCain, namely that time is of the essence and the new strategy needs to be announced now and explained to the public.

"Obama said he understands the urgency but still wants to consider all options," Bond said.

Every lawmaker who wanted to had the opportunity to say his or her piece, but only for one to two minutes, so everybody had to make it short and sweet. So many congressmen took that opportunity that the meeting lasted much longer than had been planned.

There was no discussion in the meeting of the demand by Republicans that McChrystal be allowed to testify in open hearing, Bond said.