Pentagon Ready To Ask Congress For Sequestration Break

* Officials have been citing Syria, Korea

* Request would follow exceptions for airlines

By David Lawder and David Alexander

WASHINGTON, May 1 (Reuters) - The Pentagon is preparing to ask Congress soon for more authority to shift funds to cope with automatic spending cuts, confronting lawmakers with another exception to the "sequester" just days after they gave a break to the flying public and the airline industry.

The request may be sent to the House of Representatives' Appropriations Committee as early as next week, a House Republican aide said on Wednesday.

The Pentagon won increased budget flexibility in March, but officials have told members of Congress they believe it was insufficient to cover shortfalls in training and operations.

The Defense Department move would follow closely the fix last week to ease airline flight delays caused by the temporary furloughs of air-traffic controllers by the Federal Aviation Administration.

The cuts, known as "sequestration," were originally hatched by Washington in 2011 as a way to force the White House and Congress to find an alternative budget deal rather than have spending cuts kick in automatically.

But policymakers failed to reach such a deal earlier this year and the cuts - totaling $109 billion for the current fiscal year - took effect on March 1.

Defense spending has taken the single biggest hit from the automatic cuts, with a $46 billion reduction through the Sept. 30 end of the fiscal year.

One House aide said the request would cite a shortfall in war-fighting because of higher than expected costs of withdrawing from Afghanistan.

Pentagon officials paved the way for the move in testimony to congressional committees over the past few weeks in which they expressed worries about the sequester's impact on military readiness, particularly with tensions rising in Syria and Korea.

"With the events in the world today, with Korea, Syria, Iran, the continued fight in Afghanistan ... the discussion on readiness could not come at a more critical time," General John Campbell, Army vice chief of staff, told a U.S. Senate panel on April 17.

"The reality is that if sequestration continues as it is ... we risk becoming a hollow force," he added.

Members of Congress from states with a heavy military presence have been urging a shift of funds since the sequester took effect and might be hard-pressed to vote against it.

An April 18 bipartisan letter from Virginia senators and representatives urged Defense Secretary Chuck Hagel to move quickly to prevent furloughs and loss of pay for "thousands of Virginians."

'REPROGRAMMING'

The Defense Department is preparing the request to shift funds, said Lieutenant Colonel Elizabeth Robbins, a Pentagon spokeswoman, but has not "yet specified the timing or the amount" it wants to transfer, or "reprogram" in budget jargon.

Congress last week approved a similar request from the Justice Department to shift $313 million within its budget to avoid furloughing some 60,000 employees.

Robbins said it was not yet clear whether the Pentagon would submit several different reprogramming requests or one large omnibus-style request, but the budget shifts would be sought "soon."

The Pentagon was one of several government agencies that won some budget flexibility in a stop-gap government funding measure passed in late March.

That allowed more than $10 billion that was locked up in other accounts to be shifted to the Pentagon's operations and maintenance account, which funds training exercises and military readiness.

While that has helped, it did not make up for the deep budget cuts brought on by the sequester. The Army alone is facing about a $13 billion shortfall in training, operations and Afghanistan war costs, Army Secretary John McHugh and Army Chief of Staff General Ray Odierno told lawmakers last week.