A plan to expand a controversial U.S. ballistic-missile shield into Eastern Europe is being scrutinized as part of a 2010 budget request to be sent to Congress next month, the Pentagon's chief financial officer told Congress on Wednesday.

I can tell you that issue is under intense review, Robert Hale, the Defense Department's comptroller, told the House of Representatives' Budget Committee.

In addition, he said, nothing is off the table as a candidate for cuts or cancellation among major arms programs in the spending plan for fiscal 2010, which starts Oct. 1. But no final decisions have been made.

President Barack Obama has suggested the United States would have no need to deploy proposed missile defenses in Eastern Europe if Moscow could help stop Iran from developing long-range weapons.

Obama outlined his position in a confidential letter last month to Russian President Dmitry Medvedev. Russia has strongly opposed the plan, pushed by former President George W. Bush, to put 10 two-stage interceptor missiles in Poland, backed by an advanced radar in the Czech Republic, to help defend against Iran.

Obama sent Congress a budget overview on Feb. 26 calling for a total of $663.7 billion for the Defense Department in 2010. This includes $533.7 billon in the core budget that funds ongoing military programs, plus $130 billion for the wars in Iraq and Afghanistan.

Our goal is not to seek additional supplemental funding for FY 2010 to fund the wars, Hale testified.

Declining to answer questions about the outlook for specific arms programs, he said the 2010 spending plan would reflect hard choices the Pentagon faced to stay within its budget while maximizing U.S. defense capability.

The detailed spending plan would be sent to Congress sometime next month, he said, without specifying the date.

Working with the White House budget office, the Defense Department plans to send Congress next week a second installment of its FY 2009 war-spending request, he said.

To avoid funding problems and interfering with military operations, Hale urged lawmakers to enact the remaining war spending before the end of May.

Obama has vowed to reverse a practice of using supplemental requests to fund defense operations.

We inside the (Defense) Department are experiencing that difficulty as we build these two budget requests using more stringent rules, he added.

In follow-on testimony to the budget panel, the Government Accountability Office faulted the way the Pentagon buys weapons from such top suppliers as Lockheed Martin Corp, Boeing Co and Northrop Grumman Corp.

The department largely makes investment decisions on a service-by-service and individual platform basis, using fragmented decision-making processes, GAO said in a statement for the hearing.

This make it hard to get a balanced mix of systems that are affordable and feasible and that provide the best military value, said Michael Sullivan, GAO's director for acquisition and sourcing management.

(Editing by Andre Grenon)

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