Military Budget Cuts Force Redefinition of Defense

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Feb. 25 (Bloomberg) -- Bloomberg Government senior defense analyst Robert Levinson and Tobias Levkovich, chief U.S. equity strategist at Citigroup, examine the potential impact of deep cuts to the U.S. military budget on Bloomberg Television’s “Bloomberg Surveillance.”

Fact that we can have these cuts.

Talk us what this means for the defense sector as a whole.

I do not think it is quite as earth shattering as you may make it out.

The numbers were agreed to, modified a little bit, so it is not quite as much of a surprise.

But if -- defense budget is coming down.

The industry is having to adapt to this.

So far the big primes, they maintain the revenue.

It is an adjustment, but not something people did not see coming.

If you look at how the cuts percolate through, active-duty military personnel will be traced by 13%. reserve force will decrease by five percent.

What is curious is the special forces, the group that captured mr.

Bin laden up six percent.

Is this about the u.s. becoming more targeted military?

Us about bruce for -- proved force?

I think that is right.

Back in 2012 they said we will not size the army anymore for the long-term stability operations.

We just do not want to do these anymore.

The army and marine corps can come down in size, but at the same time i'm a the targeted operations will be increasingly used to deal with the kinds of enemies we think we will have to fight.

The large land army is generally going to be a thing of the past.

Tobias lesko whichvich.

I'm in shock for someone like lockheed martin.

I do not hear as much about defense contractors or is people that make ensco fast anymore.

I saw the note that are area -- aerospace analyst put out last night.

He called the cuts more rains, less bronze.

What did they say about the politics?

Can we get this done?

This is pretty much agreed upon.

Do you agree with that?

Yes.

I think both sides, at least from 2015, they came to a number and can do it.

You used to have, particularly on the republican side, a firewall protecting the pentagon and intelligence community.

That has collapsed.

The tea party has figured out the pentagon as part of big government that they do not like so much anymore.

I want to get your take from neil ferguson writing over the weekend.

Mr.

obama supporters like nothing better than to portray him as the peacemaker to the warmonger.

The more -- more people have died violent deaths in the middle east during his presidency.

Is this the legacy?

Depends on how you look at it.

Yes, people are dying of violent deaths in the middle east.

The question, are americans involved in all of that?

There is turmoil in the region.

That is killing people.

Some of it is because bitcoin has been overthrown.

Certainly a more volatile region than when the president took office in some respect.

Less americans getting shot at at the same time.

When was the last time we saw a defense secretary have to effectively remake and redefine the role of the u.s. military to the extent that the secretary is having to do right now?

I think you have to go back to the last drawdown, which started in the late 1980's and through the end of the first bush administration.

The cold war ended.

That went away.

The u.s. military had to figure out what it is going to do now.

How did the veterans administration respond to that?

Many lobbyist group about people.

Not digital this or that, just manpower, the billion -- divisions.

How will they respond to what we have heard in the last 48 hours?

You are re: hearing about benefits cuts.

Veterans groups will scream about that.

They will fight that and push back.

The reality is personnel costs are getting very high.

If you are bringing the topline down and do not curb the personnel cost somehow, you start to squeeze out equipment and training.

Rex a lot more from this.

Look for it from bloomberg government.

Synthesis in washington.

I want to get your opinion on

This text has been automatically generated. It may not be 100% accurate.

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