According to today's New York Times, a report from Defense Secretary Leon Panetta will be revealed this week on how the Pentagon will meet its required spending reductions. The discretionary cuts agreed to by Congress and the White House this summer called for about $450 billion in defense reductions over ten years. However, the Pentagon could face an additional $500 billion in cuts from the automatic sequester if lawmakers allow it to go off.
The article discusses various possibilities for meeting the reductions. With the need to fight two wars at the same time now gone, reducing the size of the Army and the Marines is a definite possibility. Procurement will also likely be a target, as the Pentagon re-evaluates whether it needs things like the 2,500 F-35s that it has been planned on ordering. Reducing the nuclear arsenal and the cost of its related forces will also certainly be under consideration. In addition, military benefits may be targeted, although this is somewhat more controversial. Specifically, the article mentions increasing fees for TRICARE beneficiaries (healthy working-age retirees), capping pay increases, or making changes to the military pension system.
Conveniently, the Times also has a simulator that gives participants a number of options for reaching a target of $450 billion in defense savings over ten years. These cuts cover the options mentioned above, with particular emphasis seemingly on weapons/procurement reductions and personnel costs. The simulator highlights the difficulty of reaching the nearly $1 trillion of cuts that will be required if the sequester goes off while allowing users to see potential reductions that could meet the savings target.
Although achieving $1 trillion in defense cuts over the next decade may be difficult, Stimson Center fellow Gordon Adams notes in the article that this reduction would not be as deep as the previous three major drawdowns that occurred after Korea, Vietnam, and the end of the Cold War. Soon we will see the kinds of policies that Secretary Panetta endorses, and how far Congress and the Administration are willing to go on defense cuts.