Obama Gets Defense Plan to Cut $450 Billion From Budgets

The Pentagon has given President Barack Obama a draft of its strategic budget review, one of the final steps before the Defense Department releases the results, according to an administration official who was not authorized to speak on the record.

The Pentagon is seeking to trim about $450 billion in spending over 10 years to meet deficit reduction targets as a result of the Budget Control Act, which Obama signed Aug. 2.

When asked about the timetable, Defense Secretary Leon Panetta’s spokesman said the Pentagon chief “directed a methodical, strategy-driven review of the defense budget to determine where we can find savings of more than $450 billion over ten years.”

“The Pentagon’s top civilian and military leadership have been part of the process, and we have consulted along the way with the White House and the Office and Management and Budget,” spokesman George Little wrote in an e-mailed statement.

The Pentagon is “nearing completion” of the strategic review, which will guide the budget request for fiscal year 2013, according to Little. That request, which will go to Congress early next year, will be accompanied by a funding plan through fiscal 2017.

Panetta said the fiscal 2013-2017 budgets will be reduced about $260 billion as part of the $450 billion in cuts.

Weapons Cuts

The Defense Department won’t rely on weapons program cuts as the main way to meet its spending reduction goals, Deputy Comptroller Mike McCord said. “We are not going to look only at modernization,” McCord said today at a defense industry conference in New York.

The number of uniformed personnel, compensation, retirement health-care benefits and continued savings from efficiencies are getting more attention than major cuts in acquisition, according to McCord. The review is taking a “balanced” approach, he said.

Asked if Obama has seen a draft of the strategic review, McCord said “the secretary’s had a couple of interactions with the president on strategy and budget both.”

McCord said the distribution of the $260 billion through 2017 was about $25 billion in fiscal 2012, “in the 40s in 2013” and roughly $40 billion to $50 billion a year through 2017.

“The cuts will grow from ‘12 to ‘13 but they are not going to grow at some sort of enormous” rate thereafter, McCord said. “We expect them to be somewhat stable year to year.”

Supercommittee Not Reflected

The Pentagon’s fiscal 2013 budget request is not expected to reflect additional cuts up to $600 billion over 10 years, mandated after a special congressional supercommittee last week failed to reach an agreement on ways to reduce the federal deficit by at least $1.2 trillion.

Under the budget control law, the Pentagon would be hit with half of those automatic cuts starting in 2013. The remainder would come from other agencies.

Several U.S. lawmakers, including Republican Senators Lindsey Graham of South Carolina and John McCain of Arizona, say they will prepare legislation early next year to reverse the automatic defense cuts.

Representative Howard P. “Buck” McKeon, the California Republican who leads the U.S. House Armed Services Committee, said he will also introduce legislation to reverse the cuts.

“I will not be the armed services chairman who presides over crippling our military,” McKeon said in a statement Nov. 21.

To contact the reporter on this story: Roxana Tiron in Washington at rtiron@bloomberg.net

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

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