SecDef Gates Unveals FY 2010 DoD Budget Proposal

You can read his speech, but here is the nickel tour:
Additions:

• More UAVs
• More ISR Assets
• More Helos
• More Spec Ops
• More Littoral Combat Ships
• More Joint High Speed Vessel (JHSV)
• Accelerate production of F-35
• More money terminal High Altitude Area Defense (THAAD) System and Standard Missile 3 (SM-3)
• More Cyber warfare assets.
• Will go ahead with tanker purchase.
• Start replacement program for Ohio SSBN.

Reductions:

• Delay next generation CGN aircraft carrier (Ford class) by shifting to a 5 year schedule.
• Delay CGX BMD missile cruiser and reevaluate the requirements.
• Delay amphibious ship and sea-basing programs.
• Reduce the number of contractors in the Pentagon, and replace them with government employees.

Surprise, he's saying that Dick Cheney's brainchild when he was Bush I's Sec Def, using the Department of Defense as a way to reward political contributions privatizing functions and expanding the number of contractors, does not work.

Kills:

• Retire 250 of the oldest Air Force tactical fighter aircraft in FY10.
• End production of the F-22 fighter at 187 (current 183 +4)
• End acquisition of C-17s in FY 10.
• Terminate the VH-71 presidential helicopter.
• Terminate the Air Force Combat Search and Rescue X (CSAR-X) helicopter program.
• Terminate the $26 billion Transformational Satellite (TSAT) program, and instead will purchase two more Advanced Extremely High Frequency (AEHF) satellites as alternatives.
• Terminate he second airborne laser (ABL) prototype aircraft, and move program to technology demonstation.
• Terminate the Multiple Kill Vehicle (MKV) program.
• Terminate the DDG-1000 and restart the DDG-51 Aegis destroyers.
• Terminate the Army's Future Combat Systems (FCS) program's vehicle,^* and fold in the technology developed elsewhere.

I love his money quote:

Sixth, and finally, we will significantly restructure the Army’s Future Combat Systems (FCS) program. We will retain and accelerate the initial increment of the program to spin out technology enhancements to all combat brigades. However, I have concluded that there are significant unanswered questions concerning the FCS vehicle design strategy. I am also concerned that, despite some adjustments, the FCS vehicles – where lower weight, higher fuel efficiency, and greater informational awareness are expected to compensate for less armor – do not adequately reflect the lessons of counterinsurgency and close quarters combat in Iraq and Afghanistan. The current vehicle program, developed nine years ago, does not include a role for our recent $25 billion investment in the MRAP vehicles being used to good effect in today’s conflicts.

Further, I am troubled by the terms of the current contract, particularly its very unattractive fee structure that gives the government little leverage to promote cost efficiency. Because the vehicle part of the FCS program is currently estimated to cost over $87 billion, I believe we must have more confidence in the program strategy, requirements, and maturity of the technologies before proceeding further.

(emphasis mine)

This translates to, "They are not worth much in a counter-insurgency scenario, and once again the Lead System Integrator (LSI) model of procurement has given us an overpriced piece of crap."

^*Full disclosure, I worked on the Future Recovery and Maintenance Vehicle, FRMV, "wrecker" variant of the FCS-MGV^† from 2003-2006 at United Defense (later BAE Systems after the Carlyle Group sold me to buy Dunkin Donuts).
^†Future Combat Systems-Manned Ground Vehicle. These are the ones that are the tanks and APCs. As opposed to the various unnmanned vehicles, networking technologies, etc. that form the full FCS along with the MGVs.^‡
‡Yes, I have worked everywhere. Maybe I can't hold down a job, but more likely this has been my role as "technical hit man", where you are parachuted in to take care of a specific need.