As the U.S. Defense Department marches toward a 2008 decision on whether to drop one of its two main boost-phase missile interceptor programs , the Senate has indicated its clear preference.

The Senate on Oct. 7 passed a 2006 defense spending bill that cuts funding for the Kinetic Energy Interceptor (KEI) and adds money to the Airborne Laser (ABL) program. The bill was drafted by the Senate Appropriations Committee, and some defense experts interpreted the panel’s KEI recommendation as an effort to protect the Ground Based Midcourse Defense System — the U.S. territorial missile shield now being deployed — from a potential competitor .

The Senate bill cuts $111 million from the Missile Defense Agency’s $218 million request for the high-speed KEI interceptor , which is being developed by an industry team led by Los Angeles-based Northrop Grumman Corp. Meanwhile, the Senate added $10 million to the agency’s $465 million request for the ABL program, a modified 747 aircraft equipped with an anti-missile laser. Boeing Co. of Chicago is prime contractor on that effort.

In a report accompanying its proposed legislation, the Senate Appropriations Committee said the KEI program is consuming funds that could be better spent on systems that will offer protection in the near term, such as the Aegis sea-based missile defense system and the Ground Based Midcourse Defense System.

On ABL, the committee said it was “encouraged” by the “steady progress” on the program over the past year and a half.

The House of Representatives fully funded both the ABL and KEI programs in its version of the 2006 Defense Appropriations Act, so the Senate’s actions will be subject to negotiation when lawmakers from both chambers meet in conference in the coming weeks to hash out a final bill.

The report accompanying the House bill does not state a preference between ABL and KEI, but directs the secretary of defense to conduct a study with the Government Accountability Office that examines the military’s ability to shoot down missiles launched from North Korea and the Middle East in their boost and ascent phases, and the cost of doing so.

The Missile Defense Agency plans to examine the results of KEI and ABL tests scheduled for 2008 before it makes its decision on whether to drop one of them. The ABL test involves shooting down a target missile, whereas the KEI demonstration entails a flight of the high-speed booster rocket but no intercept.

Officials from the Missile Defense Agency and Northrop Grumman have suggested the possibility of modifying the flight path of the KEI’s test to one that mocks a higher-altitude, midcourse intercept. The Ground Based Midcourse Defense System is the primary midcourse interceptor in the agency’s layered missile defense architecture.

The KEI’s flexibility is both a blessing and a curse, said Loren Thompson, chief operating officer for the Lexington Institute, a think tank here. The KEI could back up or augment the Ground Based Midcourse Defense System, he said. But that capability also makes KEI a potential competitor, and thus a political target, he said.

Thompson said the cut to KEI likely was motivated by a desire among key senators to protect the Ground Based Midcourse Defense System, whose interceptors are being deployed in Alaska and California. He noted that the chairman of the Senate Appropriations Committee, Republican Sen. Ted Stevens, hails from Alaska.

Courtney Boone, a spokeswoman for Stevens, rejected the notion that the senator would advocate a funding reduction on a Pentagon program out of parochial concerns. “Sen. Stevens does not make cuts to our nation’s defense to benefit Alaska,” she said.

Darryl Fraser, senior vice president of Northrop Grumman’s Washington operations, declined to discuss the potential impact of the Senate’s KEI reduction during an Oct. 6 briefing for reporters. However, he said Northrop Grumman views the KEI as a complement, rather than an alternative , to the Ground Based Midcourse Defense System.

Both the House and Senate bills also direct the Missile Defense Agency to provide more programmatic detail in its annual budget requests . The agency currently divides its request into 12 categories, rather than by specific program, which complicates Congress’ oversight of the agency, according to the reports from both House and Senate appropriators.

The Senate appropriators said a more detailed accounting of spending plans will help prevent “large sums of money” from being realigned internally and spent on programs outside of their advertised purpose.

Victoria Samson, a research analyst at the Center for Defense Information, a think tank here, said asking the Missile Defense Agency for the type of information traditionally submitted in defense budget requests may be a concession to critics who have accused Congress of lax oversight of missile defense spending.

Other key recommendations of the Senate bill include:

– Adding $75 million to the Pentagon’s $836 million request for the Aegis sea-based missile defense program, which is led by Lockheed Martin of Bethesda, Md. The additional money, which is not included in the House bill, would fund improvements and increased production of the Standard Missile-3 interceptor, the report said.

– Requiring the Missile Defense Agency to conduct a study of the threat posed to U.S. territory by missiles fired from offshore.

The House made a similar request, and its version of the bill contains $20 million for that purpose The Senate bill includes no additional funds for the study. The Senate also indicated that it still has questions about the threat: it asked for a report by the Defense Intelligence Agency on the threat’s “validity.”

– Transferring an experimental missile defense sensor platform from the Missile Defense Agency to the U.S. Army. The High Altitude Airship, under development by Lockheed Martin , is intended to linger over areas of interest for months at a time to watch for missile launches. The Senate report said the airship , which has fallen behind schedule, might better serve the Army as a communications and intelligence-gathering platform and that the Missile Defense Agency should focus on its immediate priority of fielding a national missile shield.