Oct. 28 (Bloomberg) -- President Barack Obama plans to sign legislation today adding gays to the list of groups covered by the federal hate-crime law, the biggest expansion of such protections in decades.

Obama will sign a defense policy and funding measure that includes the provision and, according to a White House statement, will save taxpayers tens of billions of dollars by reducing waste and fraud.

The bill authorizes $680 billion in defense spending for fiscal 2010, which began Oct. 1. In an advanced text of his remarks released by the White House, Obama said the legislation shows that “change is possible” in “eliminating business as usual” in the annual military funding process.

Democrats in Congress who long have been pushing for expansion of the hate-crime law added it to the bill. The 1968 statute, passed in the aftermath of the assassination of civil rights leader Martin Luther King Jr., applies to people attacked because of their race, religion or national origin.

Under the new provision, the law will cover those attacked because of their sexual orientation, gender or gender identity. The U.S. Justice Department will have expanded authority to prosecute such crimes when local authorities don’t.

The provision is named after Matthew Shepard, a Wyoming college student killed in 1998 because he was gay, and James Byrd Jr., a black man dragged to his death that year behind a pickup truck in Texas.

There were 7,624 hate-crime incidents in 2007, almost 17 percent of which were based on sexual orientation, according to the Federal Bureau of Investigation.

War Funding

The legislation Obama is to sign authorizes $130 billion more for the wars in Iraq and Afghanistan, with about $7.5 billion designated to train Afghan security forces.

The new funding would bring to more than $1 trillion the money spent since the Sept. 11 terrorist attacks for the wars, veterans’ care, embassy protection and enhanced domestic security, according to the Congressional Research Service.

The bill puts an end to “unnecessary no-bid contracts” and will “reform defense procurement so weapons systems don’t spin out of control,” Obama said in his prepared remarks.

Left out of the bill was approval for almost $2 billion to pay for more F-22 fighter planes that “the Pentagon says they don’t need,” Obama said. F-22 planes already ordered are being built by Bethesda, Maryland-based Lockheed Martin Corp.

Obama in his remarks also praises decisions to end funding for Chicago-based Boeing Co.’s Army Future Combat Systems project and a new presidential helicopter that Lockheed-Martin was building.

Not Perfect

“This bill isn’t perfect,” Obama said in the advance text. “There is still more waste we need to cut. There are still more fights we need to win.”

Obama’s statement makes no mention of the $560 million authorized for continued development of a second engine for the Pentagon’s F-35 Joint Strike Fighter program.

White House officials had threatened a presidential veto of any measure that included money for a back-up engine to the one developed by United Technologies Corp.’s Pratt & Whitney unit if that spending would cause a “serious disruption” to the program.

The alternative engine would be made by Fairfield, Connecticut-based General Electric Co. and London-based Rolls- Royce Group Plc.

The money called for in the authorization bill must also be approved as part of separate legislation that provides the funding for specific projects.

To contact the reporters on this story Kate Andersen Brower in Washington at Kandersen7@bloomberg.net; Tony Capaccio in Washington at acapaccio@bloomberg.net

Last Updated: October 28, 2009 06:01 EDT