The panel endorsed a cut made last week by a subcommittee that is chaired by Rep. Neil Abercrombie, D-Hawaii.

Abercrombie, who proposed the cut, said the money was transferred to more pressing needs such as providing armor for vehicles in Iraq and improving the National Guard.

"It's not like we took the money away and hid it or put it against the national debt," he said in an interview. "We reallocated it to the immediate needs of the fighting men and women, particularly the Army.

"We are not against the system and we made sure there was sufficient funding to spin out the first practical production" — small unmanned drones and sensors for on-ground reconnaissance — that could be fielded to U.S. troops in Iraq next year, Abercrombie said.

Pentagon's 2nd-most costly program

The Future Combat Systems program is jointly managed by Chicago-based Boeing Co. and San Diego-based Science Applications International Corp.

The $867 million cut is the largest since the program was proposed in 2003. Cuts in the last two years have averaged about 10 percent. This latest cut could be ignored by the Senate Armed Services Committee when it completes its version of the fiscal 2008 spending measure later this month. If so, the House and Senate would eventually have to resolve differences over the budget.

At $161 billion, the Future Combat Systems is the Pentagon's second-most costly program, behind the $276 billion Joint Strike Fighter.

Congress has been skeptical that the complex program can be achieved without major cost growth and schedule delays. Since fiscal 2003, the program's research and development phase has slipped five years and the final fielding date by seven years.