The XM8 project was supposed to get $26 million to begin manufacturing, but that was left out of next years budget. The Pentagon hopes to get emergency funding to make that up. The money was setting up mass production of the rifle, and  building enough XM8s so two brigades would have them for use in Iraq during 2005. The XM-8 will cost about $700 each, versus about $500 for M-16. The Army believes that the more accurate and reliable (than the current M-16 and M-4) XM8 rifle will reduce friendly casualties, and the amount of ammunition troops have to carry in places like Iraq and Afghanistan. The XM-8 is currently headed for desert testing near Yuma, Arizona, jungle testing in Panama, and the arctic testing in Alaska. 

Meanwhile, the debate, within the army, over converting from 5.56mm to 6.8mm ammo continues. Most of the enthusiasm for the 6.8mm round comes from SOCOM (Special Operations Command.) Their argument is that the 6.8mm round is more accurate at longer ranges, and more likely to put out of action, with one shot, anyone it hits. SOCOM troops (Special Forces and commandoes) are more likely to use single shots to take down enemy troops. This, however, is also increasingly the case with U.S. Army infantry. While less capable (with a rifle) support troops are more prone to use automatic fire, the support troops usually travel in vehicles, with additional ammo supplies handy. However, the preponderance of army leaders are against the 6.8mm round. Converting would be expensive (costing billions of dollars), and the brass believe there are more important things to do with the money.

The U.S. Marine Corps is staying with the M-16 and M-4, at least for the moment. If they see notable success of the XM8 among army troops, that could change. 

Heckler & Koch, the German firm that designed the U.S. Armys new XM8 assault rifle, has also  received a $23.7 million contract to produce, over five years, as many as 65,000 pistols for the Department of Homeland Security. The pistols will be of 9mm, .40 (10mm) or .357 (also 9mm, but a different type round) caliber.