By Andy Sullivan Andy Sullivan – 1 hr 15 mins ago

WASHINGTON (Reuters) – The U.S. Senate voted on Tuesday to stop production of the F-22 fighter plane, handing President Barack Obama a victory as he tries to rein in defense spending.

The Senate voted 58 to 40 to strip $1.75 billion for the Lockheed Martin Corp-built planes from a $680 billion defense bill, overriding the objections of lawmakers seeking to protect manufacturing jobs in the midst of a deep recession.

The Senate's vote does not necessarily kill the program, as the House of Representatives included funding for the state-of-the-art fighter in its bill, which sets military spending priorities.

The two chambers must resolve their differences before sending a final bill to the president to sign into law.

Obama has threatened a veto if Congress continues to fund the F-22 beyond the 187 planes already built or in the production pipeline.

"At a time when we're fighting two wars and facing a serious deficit, this would have been an inexcusable waste of money," Obama said after the vote.

Defense Secretary Robert Gates has proposed capping production as part of an overhaul of the Pentagon's weapons programs as it tries to provide resources to fight insurgencies like those in Iraq and Afghanistan. The Pentagon applauded the vote.

Later on Tuesday the Senate voted 93-1 to extend the authorized end strength of the U.S. Army by 30,000 troops over the next three years starting October 1.

The amendment, by Sen. Joseph Lieberman, does not mandate the increase, but provides the authority for Defense Secretary Robert Gates to carry out his plan for a temporary increase of 22,000 in the Army's size and go further if he needs to, a Senate staffer said. The House has passed similar language.

In a separate voice vote, the Senate also adopted a measure that urges Obama to impose sanctions on Iran's central bank if that country continues to pursue its nuclear program and rejects an offer for diplomatic talks.

The radar-evading F-22 is designed for combat against other fighter jets but has not seen action in the Iraq or Afghanistan conflicts, where U.S. foes have not fielded an air force. Critics point out that each hour of flight time requires 30 hours of maintenance and say the plane is a relic of Cold War military strategy.

The Pentagon wants instead to ramp up production of the cheaper, more versatile F-35 Joint Strike Fighter, and Gates said last week that funding for that program could be jeopardized if Congress continues to fund the F-22.

Lockheed Martin is the primary contractor for both planes. The company's stock closed at $75.13, down 8.5 percent, on a day when it posted better-than-expected quarterly earnings but failed to raise its full-year forecast.

F-22 backers in the Senate said national security could be compromised if the plane was canceled. Up to 95,000 jobs across the country also could be at risk, said Democratic Senator Chris Dodd of Connecticut, a hub of defense manufacturing.

"To give up an aircraft of this sophistication and this capability, and simultaneously in an economic situation such as we're in .... I think is terribly shortsighted," Dodd said.

Republican Senator John McCain said it was more important to rein in unnecessary spending at a time when the country is amassing a record $1.8 trillion budget deficit.

McCain, Obama's rival in the 2008 presidential contest, said the president deserved credit for "being very firm on this issue" and described the vote as a "big victory for the American taxpayer."

The overall defense authorization bill includes $550.4 billion for military operations and $130 billion for the wars in Afghanistan and Iraq for the fiscal year starting October 1.

The bill has become a vehicle for several provisions unrelated to military spending, such as the Iran amendment.

Last week, the Senate approved a measure that would expand hate-crime protection to gays and lesbians, and on Monday also extended that protection to military members.

On Wednesday, the Senate is scheduled to consider a provision that would make it easier for gun owners to carry concealed weapons across state lines.

The House version includes $369 million in advanced procurement funds as a down payment on 12 more F-22 jets in fiscal 2011.

A final vote on the Senate bill could come later this week, but the two chambers might not begin to hammer out their differences until September.