The Four Panetta Priorities

At yesterday's DoD press conference, Secretary Panetta had the following comments on the budget.

Let me also, if I can, give you a quick update on the defense budget and where that stands at this point. As you know, the department has been undergoing a strategy-driven process to prepare to implement the more than 450 billion (dollars) in savings that it will be required to do over the next 10 years as a result of the debt limit agreement.

This review is still ongoing. No decisions have been made. But, I am committed to making these decisions based on the best advice that I receive from the service secretaries and from the service chiefs as well as the combatant commanders.

And I’ve made clear that I will be guided by the following principles: number one, that we must maintain the very best military in the world, a force capable of deterring conflict, projecting power and winning wars. We have been through a decade of war. And the result of that has been almost a doubling of the defense budget during that period.

Now I have to take on the responsibility of exercising fiscal responsibility based on doing our part to confront the deficit.

And I think this can be done by shaping -- using this as an opportunity to shape the very best defense we can for this country as we approach the next 10 years so that it -- we can effectively take on the challenges and threats in the world that we face.

Secondly, we must avoid a hollow force, and maintain a military that will always be ready, agile, deployable and capable.

Thirdly, we must take a balanced approach, and look at all areas of the budget for potential savings -- efficiencies that trim duplication and bureaucratic overhead, to improving competition, contracting procedures, management and the operations in investment programs, to tightening and reforming personnel costs and areas, to developing what will be a smaller, more agile and more flexible force for the future.

Finally, we cannot break faith with our men and women in uniform. A volunteer force is central to a strong military and is central to our future.

Achieving these savings will be very hard. This is not going to be an easy process. These involve tough decisions and tough trade- offs. While we will continue to focus on reducing overhead and duplication, make no mistake: These reductions will force us to take on greater risk in our mission to protect the country in time of war and in the face of growing security challenges.

My goal is to try to make sure that these risks are acceptable by making sure that we maintain a strong defense and preserve our ability to protect our core national security interests

Even as we take on our share of the country’s efforts to achieve fiscal discipline, we still face the potentially devastating mechanism known as sequester. So I’ve tried to make clear over the past month the roughly $1 trillion in cuts that would be forced by sequester would seriously weaken our military, and it would really make us unable to protect this nation from a range of security threats that we face. Since the cuts would have to be applied in equal percentages to every project area, we just simply could not avoid hollowing out the force. That will be the ultimate result if sequester goes into effect.

And the sequester will not only impact our military strength, I think it will impact our economic strength as well. Cancellation of weapon systems, construction projects, research activity would seriously cripple our industrial base, which would be unacceptable not only to me as Secretary of Defense but to our ability to be able to maintain the best defense system for the world.

While this budget environment presents some difficult choices for our armed forces, I believe that if we can avoid further cuts, we have a real opportunity here to set some priorities and make some hard choices needed to build a stronger force for the future and to keep faith with our men and women in uniform.