Obama signs bill to cut wasteful defense spending

President Barack Obama granted the Pentagon new power to rein in wasteful defense spending Friday, a change he said was long overdue.

Standing with leading congressional players on the South Lawn of the White House, Obama signed the weapons acquisition overhaul bill, which passed unanimously in both the House and Senate this week. The president said the bill will crack down on defense programs with huge cost overruns and increase competition for contracts.

"Every penny we waste on this effort because of no-bid contracts or cost overruns is not only an affront to American taxpayers, it's an affront to our military," Obama said.

The president said he would do whatever it takes to ensure the safety of the American people, but rejected the notion "that we need to waste billions of dollars to keep this nation secure."

Obama cited one government study which found that roughly $295 billion of taxpayers' money was wasted last year on cost overruns involving 95 defense programs.

"At a time when we're fighting two wars and facing a serious deficit, this is inexcusable and unconscionable," he said.

Lawmakers passed the legislation with unusual speed to meet Obama's request that they get it to his desk before the Memorial Day holiday.

The bill creates a new director of independent cost assessment, appointed by the president and subject to Senate confirmation. Early warning systems will also be put in place to address cost problems before they get out of hand.

There are no predictions for how much will be saved by increasing control over Pentagon procurement practices, but with multibillion-dollar cost overruns a common occurrence, lawmakers said there is potential for huge financial rewards.

Obama has emphasized the need to make Pentagon operations more cost-efficient. Defense Secretary Robert Gates has taken steps to cut the military budget by curtailing weapons - including the F-22 fighter - that cost more than originally expected or are behind in development.