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Pentagon war budget request to follow Afghan policy decisions

By Andrea Shalal

WASHINGTON (Reuters) - The U.S. Department of Defense will submit a supplemental war funding request to Congress after its next steps in Afghanistan become clearer, Acting Deputy Defense Secretary Christine Fox said on Tuesday.

Fox said the Pentagon would include a "placeholder" request for war funding or "overseas contingency operations" (OCO) as part of the larger White House budget request that is to be sent to Congress on March 4.

The actual request would come later, given that U.S. policy on Afghanistan was "a little bit on hold," she said, speaking at a conference sponsored by investment bank Credit Suisse and consulting firm McAleese and Associates.

"We're waiting for President (Hamid) Karzai and we've got some work to do there," Fox said. "We can't do an OCO budget until we know what our posture's going to be in Afghanistan. And we won't know that until we work through those political negotiations and make some hard decisions."

The White House announced on Tuesday that President Barack Obama had ordered the Pentagon to prepare for a possible complete withdrawal of troops following Karzai's refusal to sign a bilateral security pact.

Fox said she did not expect the supplemental war budget request for fiscal 2015 to be the last one, given the need to repair a large amount of equipment used in Afghanistan and bring it back to the United States.

But she said the war funding budgets had already declined significantly after peaking at around $200 billion, and would continue to come down in coming years.

Fox said the war funding budgets were not intended to pay for new equipment, although she conceded that the Pentagon had been "on both sides of that argument" in recent years. She said there was an argument to be made that if equipment was destroyed, it could be replaced by new equipment.

U.S. lawmakers, she said, had fewer constraints and could add funding for new equipment once the budget request was being negotiated in Congress.

Sources familiar with Pentagon budget plans said the department could add funding for several Lockheed Martin Corp F-35 fighter jets to the supplemental war funding request to pay for some older Marine Corp Harrier jets destroyed in combat.

Lockheed, Boeing Co and other big weapons makers are waiting for details about the budget request for fiscal 2015, which begins October 1.

(Reporting by Andrea Shalal; Editing by Jonathan Oatis)

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