Gates to find $78 billion more in Pentagon cuts - source

House Armed Services Committee Chairman Howard McKeon, speaking to reporters after a briefing from Gates, said the new cuts were more dramatic than defence companies had previously been bracing for.

"I'm not happy," McKeon said.

Gates for months has been touting his search for $100 billion in internal savings. But Reuters reported earlier this week that Gates was under pressure from the White House to find additional savings.

The additional $78 billion in cuts means that more weapons programs could go on the chopping block, as Gates tries to cancel lower-priority contracts and trim overhead costs.

Gates is scheduled to brief reporters later on Thursday about the cuts.

Congress ultimately controls the Defence Department's budget, and lawmakers often block administration efforts to cancel pricey weapons programs since they provide high-paying jobs in their home districts.

For instance, the Pentagon has tried for five years to cancel an alternate engine for the Lockheed Martin Corp F-35 Joint Strike Fighter that is being developed by General Electric and Britain's Rolls-Royce, but lawmakers have refused to kill the program.

In the latest round of Pentagon cuts, Gates is expected to propose terminating the Expeditionary Fighting Vehicle, a 40-ton amphibious landing craft that General Dynamics Corp is developing for the Marine Corps, said two sources, who were not authorized to speak on the record.

The Pentagon also is likely to cancel a surface-launched missile system being developed by Raytheon Co, and further extend the development phase of the Pentagon's largest arms program, the F-35 fighter, according to defence company sources.

Gates is not expected to reveal any details of the fiscal 2012 budget request for the Pentagon, which will be submitted to Congress as part of the overall federal budget around February 14.

But industry sources and analysts say the administration will ask for $554 billion in military spending in fiscal 2012, not counting overseas fighting, $12 billion less than it initially intended. (Reporting by Kim Dixon; Editing by Tim Dobbyn)