President Joe Biden wants an 18% cut in the number of F-35 jets the Pentagon buys next year after Congress' cap on the size of the upcoming defense budget compelled the administration to find new reductions, two sources familiar with the situation said.
The Pentagon order for Lockheed Martin's stealthy fighter will drop to below 70, down from an expected order of 83, for an estimated $1.6 billion drop in spending on jets.
Biden's overall defense and national security budget request is expected to be $895 billion, the sources said, compelling deep cuts in a wide range of programs, delays to existing programs and slowing efforts to build weapons stocks depleted by wars in Ukraine and Israel.
Budget negotiations between Defense Secretary Lloyd Austin and the White House's Office of Management and Budget have largely concluded, but the final amount could change before the budget request is expected to be unveiled on March 11, the sources added.
The drop in F-35 orders could impact Lockheed Martin, which earns about a quarter of its revenue from the jet program. International demand for the jets, which cost somewhere between $80 million to about $120 million each depending on the type, remains strong.
Lockheed said in a statement they "look forward to working with the Biden administration and Congress" on the 2025 fiscal year budget in the months ahead.
Lockheed shares fell 2.6% after the news.
The Pentagon's comptroller declined to comment, the Joint Program office, which runs the F-35 program, also declined to comment.
Last year, the Pentagon projected it would buy 83 of the stealthy F-35 fighter jets from Lockheed Martin for $9.8 billion.
Last spring, the Pentagon estimated it would need about $880 billion in 2025 and a total national defense budget of $929 billion. But the two-year budget deal struck in mid-2023 capped the 2025 defense budget at 1% above the $886 billion 2024 budget. As a result, Biden's total 2025 national security budget will be $895 billion.
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