Sailors press Gates on how defense budget hits them

U.S. Marine Corps and Navy personnel salute at the rails of the USS Iwo Jima in New York Harbor for Fleet Week, May 26, 2010.

SAN DIEGO, California (Reuters) - For sailors aboard the USS Higgins docked in San Diego, a popular question for visiting Defense Secretary Robert Gates on Thursday was how the austerity drive he announced this week would affect them.

"We are fighting two wars and so the budget is a huge deal for us," said Naval Petty Officer Michael Allen after Gates gave him and the rest of the crew aboard the guided-missile destroyer a commemorative coin.

"On our level there are things we can do (to cut costs) but we don't make the decisions about it," Allen said.

Gates was peppered with questions about the finances of the U.S. military and whether he had plans, for example, to cut back on forces, or whether it would be harder to get supplies.

"If it works the way I want it to, you get the money," Gates told one sailor.

One target of Gates' cost-cutting is to slash spending on defense contractors by 10 percent for each of the next three years, reducing the reliance on outside workers and putting more pressure on the U.S. military.

"The whole idea is to reduce contracts, reduce staff, consolidate headquarters, cut the overhead so that we can invest properly in force structure and force modernization," said Gates, whose announcements have stirred up some anxiety among troops.

COST-CUTTING MEASURES

Facing a giant U.S. deficit, Gates this week unveiled a series of cost-cutting measures that will shed thousands of jobs and shut down an entire military command.

In a speech later in San Francisco at the Marines' Association memorial club, Gates said the pressure would be huge to slash defense spending because of the political and fiscal realities, but he cautioned against that, saying similar mistakes were made after previous wars.

"We must have modest and sustainable growth in defense spending to allow us to maintain our capabilities, reset our fighting forces and invest adequately in modernization and future capabilities," Gates said.

"To make the case for growth at a time of economic and fiscal duress requires the Defense Department to make every dollar count -- to fundamentally change the way we spend the taxpayer's dollars and the way we do business," he added.

The U.S. budget gap hit a record $1.41 trillion in fiscal 2009 and is poised to grow wider this year, unnerving many Americans grappling with unemployment at 9.5 percent.

Many of the proposed cuts have upset members of Congress who face the potential loss of jobs in their home districts, but Gates hopes his austerity plan will show lawmakers the Pentagon can spend tax dollars wisely in tough economic times.

Conceding to sailors that Defense Department bureaucracy had the "fine motor skills of a dinosaur," Gates promised he was doing his best to ensure the cuts did not inadvertently affect those lower in the ranks.

"I want to make sure that those involved in maintenance have the tools and those who are doing the welding have the steels they need," he said."

Pressed on whether some forces would be cut, he said, for example, the Marine Corps was currently at about 202,000 with the increase of current forces in Afghanistan, up from a previous number of 175,000.

"After the surge ends in Afghanistan, they will probably reduce some," he said.

(Editing by Peter Cooney)