Panetta fires first shot in defense budget showdown

Editor's note: This article was updated Jan. 30 to correct Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey's title.

In a Jan. 26 Pentagon press conference, Defense Secretary Leon Panetta offered a first glimpse into the cuts coming to defense spending in fiscal 2013, outlining measures that “will impact all 50 states and many districts, congressional districts across America” and likely spur heavy debate on Capitol Hill.

Detailed budget plans won’t be unveiled until February, but Panetta said he would be requesting $525 billion for the fiscal 2013 base budget, which is the first budget to be implemented since last year’s Budget Control Act mandated nearly $500 billion be cut from defense spending over the next 10 years. It’s $6 billion less than 2012’s requested base budget, and part of $259 billion in cuts to take place in the next five years.

Technology gains while numbers decline in Panetta's vision for the future. “We knew that coming out of the wars and dealing with budget reductions of this magnitude that the budget would be smaller – but the key is to fashion the agile and flexible military force that we need in the future,” Panetta said.

That force will be smaller now that troops have withdrawn from Iraq and are in the process of drawing down in Afghanistan. Nearly 100,000 ground troops will be eliminated – 80,000 from the Army, 20,000 from the Marine Corps – and older cargo aircraft and cruisers will be retired from the Air Force and Navy fleets. Purchases of new F-35 stealth fighter jets and Virginia class submarines will be delayed.

Panetta also said President Barack Obama will be asking Congress for another round of Base Realignment and Closure processes to reflect the shifting military levels – a plan that will likely come in for significant criticism.

Some areas received special safeguarding in the budget-cutting process, particularly in technology.

“We’re not just facing conventional threats, we’re also facing technological threats, and we have to be prepared to be able to leap ahead technologically in order to be able to confront those kinds of adversaries,” Panetta said. “We have to retain a decisive technological edge. That meant protecting and increasing investments in cyber capabilities. In order to protect vital investments for the future, we’ve protected science and technology programs as well.”

Flanked by Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey, Panetta also outlined plans to target DOD business systems and personnel – some of which are already being enacted under ongoing efficiency measures, but may be accelerated.

“We frankly need to also look at a department that is leaner and more agile as well. For that reason this budget seeks to reduce excess overhead, eliminate waste in the department and improve business practices across the department,” Panetta said, adding that current measures have identified $60 billion in savings so far. “This will involve areas such as aggressive and competitive contracting practices, better use of information technology, streamlining the staff, reductions in contract services and better inventory management.”

Dempsey agreed that the Pentagon can expect to see more of this type of streamlining.

“This is a very big bureaucracy and it could use a lot of efficiency,” he said. “There will be civilian pay savings as well…that’s going to be built in to the President’s budget.”

For more information, see a related white paper and budget fact sheet.