Panetta Announces Fiscal 2013 Budget Priorities

WASHINGTON, Jan. 26, 2012 — Spend­ing pri­or­i­ties in the forth­com­ing fis­cal 2013 defense bud­get request call for reduc­tions in the end strength of the Army and Marine Corps, an increase in spe­cial oper­a­tions forces and main­tain­ing the num­ber of big-deck car­ri­ers, Defense Sec­re­tary Leon E. Panet­ta said here today.

The Pentagon’s bud­get topline request is set at $525 bil­lion for fis­cal 2013 with an addi­tion­al $88.4 bil­lion for over­seas con­tin­gency oper­a­tions — most­ly in Afghanistan. This is down from $531 bil­lion and $115 bil­lion, respec­tive­ly, in this fis­cal year.

Defense Depart­ment offi­cials used the new defense strat­e­gy guid­ance that Pres­i­dent Barack Oba­ma announced ear­li­er this month to shape the bud­get request, the sec­re­tary said.

The bud­get seeks to min­i­mize the impact of cuts on per­son­nel accounts. Ser­vice mem­bers will receive their full pay rais­es in fis­cal 2013 and 2014, Panet­ta said. “We will achieve some cost sav­ings by pro­vid­ing more lim­it­ed pay rais­es begin­ning in 2015,” he added.

Health care is anoth­er impor­tant ben­e­fit, and one that has far out­paced infla­tion. Changes to health care will not affect active duty per­son­nel or their fam­i­lies, Panet­ta said.

“We decid­ed that to help con­trol growth of health care costs, we are rec­om­mend­ing increas­es in health care fees, co-pays and deductibles for retirees,” he said. “But let me be clear that even after these increas­es, the cost borne by mil­i­tary retirees will remain below the lev­els in com­pa­ra­ble pri­vate-sec­tor plans.”

Over­all, the request puts DOD on the path to save $259 bil­lion over the next five years and $487 bil­lion over the next 10. Panet­ta called the bud­get “a bal­anced, com­plete pack­age” that keeps the Amer­i­can mil­i­tary the pre-emi­nent force in the world.

It is a bal­anced pack­age, the sec­re­tary said, because while some pro­grams are elim­i­nat­ed or delayed, oth­ers are increased. The bud­get looks to re-shape the mil­i­tary to be more agile, quick and flex­i­ble that incor­po­rates the lessons learned in 10 years of war, he added.

Increas­ing the num­ber of spe­cial oper­a­tions forces is key to the plan, Panet­ta said, and spe­cial oper­a­tors will begin to shift back to their tra­di­tion­al pre‑9/11 mis­sion of instruct­ing local forces.

The request puts the Army on a path to drop to 490,000 sol­diers and the Marine Corps to 182,000 Marines over five years. Cur­rent­ly, the two ser­vices have 562,000 and 202,000 active-duty mem­bers, respec­tive­ly. The sec­re­tary not­ed this is still high­er than the num­bers on 9/11.

The bud­get treats the reserve com­po­nents very care­ful­ly, Panet­ta said. After a decade of being an inte­gral part of America’s wars, the reserve com­po­nents will not go back to being a strate­gic Cold War-era reserve. The reserves will be the nation’s hedge against the unex­pect­ed, the sec­re­tary said.

“We are mak­ing only mar­gin­al reduc­tions in the Army Reserve and Army Nation­al Guard, and no reduc­tions in the Marine Corps Reserve,” the sec­re­tary said. “The Air Force will make bal­anced reduc­tions in the Air Guard that are con­sis­tent with reduc­tions in the active com­po­nent and Air Force Reserve.”

The request also calls for more base realign­ments and clo­sures, and a “BRAC-like” author­i­ty to rec­om­mend changes to mil­i­tary retire­ment. “But the pres­i­dent and depart­ment have made clear that the retire­ment ben­e­fits of those who cur­rent­ly serve will be pro­tect­ed by grand­fa­ther­ing their ben­e­fits,” Panet­ta said.

The bud­get main­tains the cur­rent U.S. focus in the Cen­tral Com­mand region and increas­es Amer­i­can com­mit­ment to the Pacif­ic Com­mand area of oper­a­tions. The request looks to main­tain the Navy’s cur­rent 11 air­craft car­ri­ers and 10 car­ri­er air wings, Panet­ta said. It will also main­tain the cur­rent Marine and Army pos­ture in the Asia-Pacif­ic region, and will base lit­toral com­bat ships in Sin­ga­pore and Bahrain.

The bud­get will elim­i­nate two for­ward-based Army heavy brigades in Europe. Instead, brigades will rotate in and out of the area. The Unit­ed States and Euro­pean allies also will look to share costs for new capa­bil­i­ties such as the alliance ground sur­veil­lance pro­gram.

The Navy will retire sev­en old­er cruis­ers and two amphibi­ous ships ear­ly, and the Air Force will elim­i­nate six tac­ti­cal air squadrons.

The bud­get sinks more mon­ey into tech­nolo­gies to pre­vail in an anti-access, aer­i­al-denial sce­nario and will fund the next-gen­er­a­tion bomber and mod­ern­iza­tion of the sub­ma­rine fleet.

The F‑35 joint strike fight­er is key to main­tain­ing domain supe­ri­or­i­ty, and the mil­i­tary remains com­mit­ted to the pro­gram, Panet­ta said. “But in this bud­get, we have slowed pro­cure­ment to com­plete more test­ing and allow for devel­op­men­tal changes before buy­ing in sig­nif­i­cant quan­ti­ties,” he added.

The bud­get will main­tain all legs of the nuclear tri­ad — bombers, ICBMs and sub­marines — and will invest in sig­nif­i­cant­ly more capa­bil­i­ty in the cyber world, Panet­ta said.

Panet­ta stressed the bud­get is based on strat­e­gy and will shape the force for the future. While the pain of cuts will be felt across the coun­try, he said, it will also ensure a strong, agile mil­i­tary for the future.

The bud­get must pass Con­gress, and the sec­re­tary said he hopes mem­bers of Con­gress under­stand the strat­e­gy and nuances of the bud­get.

“My hope is that when mem­bers under­stand the sac­ri­fice involved in reduc­ing the defense bud­get by half a tril­lion dol­lars, it will con­vince Con­gress to avoid seques­tra­tion, a fur­ther round of cuts that would inflict severe dam­age to our nation­al defense for gen­er­a­tions,” Panet­ta said.

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs)