Gates Says U.S. Defense Cuts Mean 'Hard Decisions'

Defense Secretary Robert Gates said Tuesday that fiscal pressures on the U.S. military's budget will require sacrificing some missions abroad and scaling back pay and benefits.

Gates, who is due to step down at the end of June, urged military and civilian leaders to face up to harsh realities about the future size and role of the armed forces amid a push to contain the country's huge deficit.

"To shirk this discussion of risks and consequences -- and the hard decisions that must follow -- I would regard as managerial cowardice," Gates said.

Speaking to an audience of defense hawks at the right-leaning American Enterprise Institute, Gates argued that reducing Pentagon waste and overhead costs would not be enough to reach President Barack Obama's goal of $400 billion in security budget cuts over the next 12 years.

Instead, meeting Obama's objective likely will require reducing the size of the military, eliminating some "lower priority missions" overseas and reforming military pay, pensions and health care, he said.

The Pentagon needed to be "honest" about the consequences of downsizing the force of 1.4 million: "That a smaller military, no matter how superb, will be able to go fewer places and be able to do fewer things," Gates said.

The White House, meanwhile, warned the House of Representatives controlled by Obama's Republican foes that the president would veto the budget bill if it stays true to the text approved by the House Armed Services Committee, citing "serious concerns" with some of the provisions.

Among its objections, the White House pointed to a requirement limiting funding for a new generation of fighter jets -- the F-35 -- unless an alternate engine is developed, which the Obama administration has labeled an unnecessary cost.

The White House also threatened a veto on the fiscal 2012 National Defense Authorization Act expected to be debated this week due to provisions it said would place "onerous conditions" on implementing the new START nuclear arms reduction treaty with Russia.

And it "strongly objects" to limits on using funds to transfer detainees from Guantanamo, the U.S. naval base in southern Cuba where 171 "war on terror" prisoners remain, to third countries or for trial.

With troop pay and benefits eating up an ever-larger share of the defense budget, Gates also said the Pentagon needed to find savings in an area that has remained politically off-limits.

"It will require doing something about spiraling health care costs -- and in particular the health insurance benefit for working age retirees whose fees are one-tenth those of federal civil servants, and have not been raised since 1995," he said.

While the size of the force might have to be reduced and pensions reformed, Gates said certain core weapons programs had to be funded and could not be cut without undermining U.S. power and the military's reach.

Gates cited five programs that were "absolutely critical," saying "we must" invest in new aerial refueling tankers, the F-35, new warships, new vehicles for ground forces and new ballistic missile submarines.

He stressed that the F-35s are needed to replace the current fleet of warplanes and to "maintain a healthy margin of superiority over the Russians and Chinese."

The Pentagon chief described a "bleak fiscal outlook" for the country that meant an end to a decade of "no questions asked" defense spending in the aftermath of the attacks of September 11, 2001.

But he said the defense budget, which came to $663 billion for fiscal year 2010, was not the cause of the country's "fiscal woes" though cutting military spending had to be "part of the solution."

The defense secretary, a Republican holdover from the previous Bush administration appointed in 2006, expressed frustration at the Pentagon's vast bureaucracy and acknowledged that his attempts at cutting back administrative costs had produced mixed results.

"There are still too many headquarters, offices and agencies employing too many high ranking personnel and contractors consuming too many resources relative to real military missions and measurable results," he said.

Efforts to streamline the Pentagon had shown the department operates "as a semi-feudal system -- an amalgam of fiefdoms without centralized mechanisms to allocate resources, track expenditures, and measure results relative to the department's overall priorities."