Sure, the Bush Administration's missile defense system has flopped just about every test it's faced. But that's not the only reason the program is being cut by more than a billion dollars a year, says BusinessWeek.

"The war on terror and Iraq may have taken their toll on missile defense and changed the way Defense Secretary Donald Rumsfeld assesses potential threats," the magazine notes. Worries about incoming missiles have given way to 9/11-style terrorism fears, and the war in Iraq.

"The Rumsfeld vision of future warfare has had a severe collision with reality," says Loren Thompson, chief operating officer of the Lexington Institute, a conservative think tank in Arlington, Va. The problems facing missile defense, he says, are "the relatively weak case for the overall mission and the need to spend money in other ways.

Consider as well the difference between the 2000 election and last year's. Five years ago, missile defense was one of Bush's key issues... "America must build effective missile defenses based on the best available options at the earliest possible date," he declared during his first run for the White House.

Since then, despite the roughly $10 billion a year that has poured into the program, Rumsfeld has conceded the system doesn't have to be 100% effective. It just has to work well enough to change the calculation of an enemy thinking about lofting a missile at Los Angeles or New York. Problem is, it doesn't even seem capable of doing that, as [a botched] December test showed...

And as the American program struggles, other countries are making headway in pursuing new technologies. Scott Ritter, the former arms inspector in Iraq who correctly concluded Baghdad had no weapons of mass destruction, now says Russia has tested an SS-27 Topol-M mobile ballistic missile that would render the current Star Wars scheme useless. It is too fast to hit right after takeoff unless the interceptor is lucky enough to be really close to the launch pad.

Also, the SS-27 is hardened against lasers, so the Airborne Laser -- a program already way behind schedule -- wouldn't work. And because it's maneuverable and capable of releasing three warheads and four decoys, it would be much harder to defeat as it falls in the terminal stage of flight.

[Missile Defense Agency] spokesman Lehner says Ritter's objection misses the point of his agency's goal, which is to address "the more rudimentary missiles North Korea and Iran are developing." But what if Pyongyang or Tehran buys an SS-27? "I don't know about that," he told BusinessWeek Online.

THERE'S MORE: Despite a litany of broken budgets and shattered deadlines, it looks like the Airborne Laser (ABL) is returning to the forefront of missile defenders' minds.

The laser-firing 747 last year achieved "first light" -- successfully testing its ray gun. And now, "agency officials consider the program 'quite healthy,' and they are planning to attempt a target shoot-down in 2008," Inside Defense says. Just last month, an MDA official refused to give a date for when that test might go down.

"It is revolutionary, it is disruptive, meaning this required inventions and doing things that have never been done before," a Pentagon official told the AFP, likening the potential impact on warfare of the airborne laser to the advent of nuclear power. "And it has done so well, certainly in the last ten months that we really need to pursue this to a conclusion. We’re encouraged by everything we’ve seen."

The MDA has long been concerned about knocking a missile down right when it takes off, in its so-called "boost phase." But the task has been deemed all-but-impossible by a collection of leading physicists. And, one by one, the technologies the MDA to pursue this task have failed to deliver. Now, there's only a single "boost phase" option left for the MDA. And that's the laser jet.