Panetta begins to prepare Pentagon for budget cuts

Reuters News

10/11/2011 2:53:49 PM - Reuters News

By David Alexander

WASHINGTON (Reuters) - Defense Secretary Leon Panetta said on Tuesday the U.S. military should expect cuts to personnel, benefits and equipment as the Pentagon makes the "difficult choices" to reduce security spending by $450 billion.

Panetta, in what the Pentagon billed as his first policy address, also called on Congress to be a "responsible partner" by supporting a defense strategy that might not always include their favorite base or weapons system.

"We need to build the military force that the country needs but also help ensure that the country maintains its economic strength," Panetta said in a speech to the Woodrow Wilson International Center think tank.

Panetta's remarks were the most detailed yet elaborating on his views about what the Pentagon will have to do to meet the spending reductions called for in the debt reduction agreement approved by Congress and President Barack Obama in August.

That deal calls for $350 billion in cuts over 10 years in comparison to a Congressional Budget Office baseline of projected national security spending. The cuts represent more than $450 billion when measured against the Pentagon's own baseline projections.

The cutbacks come as the United States is slowly winding down its involvement in Afghanistan and Iraq after a decade of war while seeing growing challenges abroad from rival powers like China and countries with growing nuclear programs like North Korea and Iran.

Panetta said the Pentagon would attempt to find $60 billion reductions by streamlining, cutting overhead and eliminating waste and duplication. That figure comes on top of the $150 billion in efficiency savings announced previously by former Secretary of Defense Robert Gates.

Panetta said the Defense Department also would have to deal with rising military personnel costs, which have grown more than 80 percent in the past decade while the level of military employment has grown only 5 percent.

He did not say what action would be taken, calling it "an area of extreme challenge, because my highest priority is maintaining the vitality of our all-volunteer force -- and keeping faith with the men and women who have put their lives on the line to defend the country."

Panetta said the overall size of the ground forces would have to be reduced and some procurement would have to be set aside or delayed.

"We will need to consider accepting reduced levels of modernization in some areas, carefully informed by strategy and rigorous analysis," he said.

(Editing by Bill Trott)