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American Forces Press Service

Panetta: Doubling Cuts Would Force Irresponsible Budgeting

By Karen Parrish
American Forces Press Service

WASHINGTON, Oct. 13, 2011 – The nation’s forces are near the goal of defeating al-Qaida, and must now prepare to counter new and emerging threats with steeply reduced funds, Defense Secretary Leon E. Panetta told Congress here today.

A decade of war has imposed “untold stresses and strains” on service members and their families, but also has made the force stronger and more capable, the secretary told the House Armed Services Committee.

Panetta and Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, both testified for the first time in their current positions on the future of national defense and the military 10 years after 9/11. Panetta said the current force is the finest and most battle-hardened in the nation's history, and has grown more lethal and more capable in counterterrorism and counterinsurgency operations.

Terrorism remains a threat in Pakistan, Somalia, Yemen, North Africa and other places, Panetta told the panel, but defense forces also face a range of other security concerns while Pentagon officials plan at least $450 billion in spending cuts over the next 10 years.

“As we confront the fiscal challenges that this nation faces, we're doing it at a time when we are continuing to confront a series of very real threats in the world to our national security,” he noted.

Those threats include nuclear proliferation, rising powers such as China, and an ever-growing number of cyber attacks, Panetta said.

“As we confront those threats, we have to meet our fiscal responsibilities,” he said. “That will require setting a very clear set of strategic priorities and making some very tough decisions.”

While no firm decisions have been made about specific cuts, Panetta said, defense and service leaders are conducting a strategic spending review based on four guidelines:

-- Maintain a force capable of deterring conflict, projecting power and winning wars.

-- Avoid a hollow force and maintain a military that, if smaller, will be ready, agile and deployable.

-- Look at all areas of the budget for potential savings: find efficiencies that trim duplication; improve competition and management in investment and procurement programs; tighten personnel costs, up by nearly 80 percent in recent years; and re-evaluate modernization efforts.

-- Do not “break faith” with service members on pay and benefits.

“We could not be the finest defense system in the world without the men and women who serve in uniform,” the secretary said. “They're the ones that have made us strong, and they're the ones that put their lives on the line every day in order to protect this country. We have got to maintain our faith with those that have deployed time and time and time again.”

The Defense Department also must work even harder to overhaul the way it does business, Panetta said.

The department has made significant progress toward meeting the congressional deadline for audit-ready financial statements by 2017, the secretary said. He announced that DOD will conduct a full-budget audit by 2014.

“This focused approach prioritizes the information we use in managing the department, and will give our financial managers the key tools they need to track spending, identify waste and improve the way the Pentagon does business as soon as possible,” he said.

A “sequestration” mechanism in the nation’s debt-reduction law automatically cuts federal spending further if a congressional “super-committee” fails to enact further measures to reduce the deficit by Nov. 24. Those additional cuts would risk hollowing out the force, Panetta emphasized.

“We're having to cut … almost a half trillion dollars out of the defense budget,” he said. “We can do this in a way that protects our force for the future. But it's going to take us to the edge, and if suddenly on top of that we face additional cuts, or if this sequester goes into effect and it doubles the number of cuts, then it'll truly devastate our national defense.”

In preparing for the current $450 billion-plus reduction, he said, defense officials have examined weapons systems, force structure reductions, personnel and compensation benefits, and procurement processes.

“We can do this the right way,” he said. “But … if suddenly we're facing a doubling of those cuts, a responsible approach to doing this right is going to be impossible.”

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