Bloomberg News

Panetta Says Weapons Buying, Operations Face ‘Targeted’ Changes

October 11, 2011

Oct. 11 (Bloomberg) -- The Pentagon is making “targeted changes” to weapons programs, upgrades and operations costs that constitute the largest part of a potential $450 billion in defense budget reductions through 2021, according to Defense Secretary Leon Panetta.

“Every program, contract and facility will be scrutinized for savings that won’t reduce readiness or our ability to perform essential missions,” Panetta said today in the prepared text of his first major policy address since becoming defense secretary, the first of three this week.

Panetta has released little detail to date about the Pentagon’s review of military roles and missions, which is intended to guide about $450 billion in budget reductions.

Speaking at the Woodrow Wilson Center in Washington, Panetta didn’t identify weapons systems for reductions. Cuts must be “carefully targeted to avoid a hollow force, to ensure we maintain a robust industrial base and to protect the new military capabilities we need,” he said.

Departing Deputy Defense Secretary William Lynn in an interview said the Pentagon’s largest weapons program, the Lockheed Martin F-35 program, was not “being singled out but everything is on the table.”

Panetta today said that Congress must be a “responsible” partner to support defense strategies “that may not always include their favorite bases or weapons systems.”

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

Weapons Growth

The U.S. Defense Department’s five-year weapons-buying budget, while lower than the military planned last year, still results in annual, inflation-adjusted growth of about 2.6 percent, according Pentagon projections.

Weapons procurement would increase to $137.2 billion in fiscal 2016, up from $113 billion in President Barack Obama’s fiscal 2012 budget.

The plan calls for $117.6 billion in fiscal 2013, $125.9 billion in 2014 and $129.5 billion in 2015, before reaching the $137.2 billion in 2016.

U.S. spending on weapons through 2016 grows faster than the overall defense budget, which will have annual increases of about 0.5 percent above inflation.

Force Structure

Panetta also said the Pentagon review is looking at a smaller force, including ground troops, as the U.S. presence is reduced in Iraq and Afghanistan. Still, “while some limited reductions can take place, I must be able to maintain a sufficient force to confront the potential of having to fight more than one war,” Panetta said.

“What would be helpful here is maintaining a strong National Guard and Reserve that can help respond to a crisis,” Panetta said.

Army Chief of Staff General Ray Odierno yesterday said “we will have to change the strategy and what we are able to do if we continue to fall below a certain level.”

U.S. Army Lieutenant General Robert Lennox said today the Army’s share of planned defense spending cuts may translate to between $12 billion and $14 billion a year.

The Army already plans to shrink the number of active-duty soldiers to about 520,000 from about 570,0000 today.

Because the size of the force can’t be reduced quickly enough to offset spending reductions, “the brunt of those cuts will come in modernization and training,” said Lennox, deputy chief of staff for weapons programs. “It’s just math.”

--With assistance from Brendan McGarry in Washington. Editors: Steven Komarow, Terry Atlas

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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