Defense Secretary Leon E. Panetta is set this week to reveal his strategy that will guide the Pentagon in cutting hundreds of billions of dollars from its budget, and with it the Obama administration’s vision of the military that the United States needs to meet 21st-century threats, according to senior officials.
In a shift of doctrine driven by fiscal reality and a deal last summer that kept the United States from defaulting on its debts, Mr. Panetta is expected to outline plans for carefully shrinking the military — and in so doing make it clear that the Pentagon will not maintain the ability to fight two sustained ground wars at once.
Instead, he will say that the military will be large enough to fight and win one major conflict, while also being able to “spoil” a second adversary’s ambitions in another part of the world while conducting a number of other smaller operations, like providing disaster relief or enforcing a no-flight zone.
Pentagon officials, in the meantime, are in final deliberations about potential cuts to virtually every important area of military spending: the nuclear arsenal, warships, combat aircraft, salaries, and retirement and health benefits. With the war in Iraq over and the one in Afghanistan winding down, Mr. Panetta is weighing how significantly to shrink America’s ground forces.
There is broad agreement on the left, right and center that $450 billion in cuts over a decade — the amount that the White House and Pentagon agreed to last summer — is acceptable. That is about 8 percent of the Pentagon’s base budget. But there is intense debate about an additional $500 billion in cuts that may have to be made if Congress follows through with deeper reductions.
Mr. Panetta and defense hawks say a reduction of $1 trillion, about 17 percent of the Pentagon’s base budget, would be ruinous to national security. Democrats and a few Republicans say that it would be painful but manageable; they add that there were steeper military cuts after the Cold War and the wars in Korea and Vietnam.
“Even at a trillion dollars, this is a shallower build-down than any of the last three we’ve done,” said Gordon Adams, who oversaw military budgets in the Clinton White House and is now a fellow at the Stimson Center, a nonprofit research group in Washington. “It would still be the world’s most dominant military. We would be in an arms race with ourselves.”
Many who are more worried about cuts, including Mr. Panetta, acknowledge that Pentagon personnel costs are unsustainable and that generous retirement benefits may have to be scaled back to save crucial weapons programs.
“If we allow the current trend to continue,” said Arnold L. Punaro, a consultant on a Pentagon advisory group, the Defense Business Board, who has pushed for changes in the military retirement system, “we’re going to turn the Department of Defense into a benefits company that occasionally kills a terrorist.”
Mr. Panetta will outline the strategy guiding his spending plans at a news conference this week, and the specific cuts — for now, the Pentagon has prepared about $260 billion in cuts for the next five years — will be detailed in the president’s annual budget submission to Congress, where they will be debated and almost certainly amended before approval. Although the proposals look to budget cuts over a decade, any future president can decide to propose an alternative spending plan to Congress.
The looming cuts inevitably force decisions on the scope and future of the American military. If, say, the Pentagon saves $7 billion over a decade by reducing the number of aircraft carriers to 10 from 11, would there be sufficient forces in the Pacific to counter an increasingly bold China? If the Pentagon saves nearly $150 billion in the next 10 years by shrinking the Army to, say, 483,000 troops from 570,000, would America be prepared for a grinding, lengthy ground war in Asia?
What about saving more than $100 billion in health care cutbacks for working-age military retirees? Would that break a promise to those who risked their lives for the country?
The calculations exclude the costs of the wars in Iraq and Afghanistan, which will go down over the next decade. Even after the winding down of the wars and the potential $1 trillion in cuts over the next decade, the Pentagon’s annual budget, now $530 billion, would shrink to $472 billion in 2013, or about the size of the budget in 2007.
By ELISABETH BUMILLER and THOM SHANKER
January 2, 2012