* Obama seeks to security savings of $400 billion
* Gates predicts calls to shrink US global role
* Gates to step down at the end of June
By Phil Stewart
WASHINGTON, May 22 (Reuters) - Outgoing Defense Secretary Robert Gates warned on Sunday against sharply cutting the size and reach of the U.S. armed forces to trim the deficit, portraying America's military might as an essential safeguard of global stability.
The comments by Gates to graduating students at Notre Dame University came as some Republicans and Democrats look to defense as a way to address the U.S deficit, running about $1.4 trillion this fiscal year that ends Sept. 30.
Obama announced plans in April to hold national security spending below the rate of inflation for the next 12 years, a move that would save about $400 billion, mainly from Defense Department budgets.
Gates, a holdover from the Bush administration who is leaving the post at the end of June, predicted future calls for major Pentagon cuts could challenge U.S. global leadership.
"As we make the tough choices needed to put this country's finances in order ... there will undoubtedly be calls to shrink America's role in the world, for us to sharply reduce our international commitments and the size and capabilities of our military," he told the audience at the Indiana university.
But Gates said a properly funded U.S. military "cannot be taken for granted." He pointed to an unpredictable world grappling with nuclear proliferation, terrorism, revolution throughout the Middle East, as well as a nearly decade-old war in Afghanistan and U.S. efforts to end the war in Iraq.
"Our military credibility, commitment, and presence are required to sustain alliances, to protect trade routes and energy supplies, and to deter would-be adversaries," he said.
HOLLOWING-OUT THE MILITARY
Gates has repeatedly urged against across-the-board cuts such as those in the 1970s after the Vietnam War or in the 1990s after the Cold War, which he says hollow-out the military.
Instead a strategic review of U.S. military missions and capabilities were in order.
"The lessons of history tell us we must not diminish our ability or our determination to deal with the threats and challenges on the horizon," Gates said.
Gates has been a strong supporter of greater resources for U.S. diplomacy and economic development, tools commonly referred to as "soft-power," as a way to advance U.S. interests.
"But make no mistake, the ultimate guarantee against the success of aggressors, dictators, and terrorists in the 21st century, as in the 20th, is hard power -- the size, strength, and global reach of the United States military," he said.
Gates acknowledged that the size of the U.S. defense budget needed to be addressed, saying the country's fiscal imbalances and mounting debt could become a "deep crisis for our nation."
He pointed to a need to find ways to further reduce bureaucratic excess, overhead and examine personnel levels.
When it came to U.S. military missions and capabilities, Gates said it was important to "separate the desirable or optional from the essential."
But even as the Pentagon conducts that review, Gates urged the U.S. military should not shrink from the world. He quoted Winston Churchill saying: "The price of greatness is responsibility ... the people of the United States cannot escape world responsibility."
(Editing by Philip Barbara)