By Karen Jacobs

PARIS (Reuters) - While the United States will need to curb defense spending in the face of fiscal crisis, it must avoid cutting too much to sustain its military effectiveness, a top Pentagon official said on Sunday.

U.S. Deputy Defense Secretary William Lynn said that as defense spending slows, the nation must protect core capabilities and key technologies that will be needed in the future such as unmanned vehicles, cybersecurity and long-range strike systems.

"Our challenge is to accommodate our changing fiscal circumstances without undercutting our military effectiveness," Lynn told a meeting of the Aerospace Industries Association a day before the start of the Paris airshow.

Lynn said the U.S. Defense Department had launched a defense industrial base review to understand how budget and arms acquisition decisions affect the industry. He said the review, which is being done sector-by-sector and tier-by-tier, would influence budget decisions and industrial policy.

During previous times when defense spending slowed, U.S. military capability was reduced in critical areas, and it had to be rebuilt at great cost and under urgent circumstances, he added.

For example, he said a drawdown in defense spending in the 1950s following World War Two left U.S. troops lesser-equipped in the beginning stages of the Korean conflict.

"With troops deployed in active conflicts, we must do better this time around," Lynn added.

Speaking to reporters at the U.S. Embassy in Paris ahead of his speech to the industry association, Lynn said bringing the U.S. deficit under control was a national security issue, and areas such as defense would not be immune from cuts.

"No country with a weak economy is going to be strong militarily," he said.

He said the need to reduce deficits meant "hard choices" would have to be made on systems and programs and added that "nice to haves" would likely face elimination in the current budget environment.

(Reporting by Karen Jacobs; Editing by Diane Craft)




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