Pentagon to unveil revised defense strategy

WASHINGTON Tue Jan 3, 2012 7:31pm EST

A U.S. Air Force version of the F-35 Lightning II flies at Naval Air Station Fort Worth Joint Reserve Base, Texas, in this April 20, 2010 file photo.  REUTERS/US Air Force/Lockheed Martin/Handout/Files

A U.S. Air Force version of the F-35 Lightning II flies at Naval Air Station Fort Worth Joint Reserve Base, Texas, in this April 20, 2010 file photo.

Credit: Reuters/US Air Force/Lockheed Martin/Handout/Files

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WASHINGTON (Reuters) - A review of U.S. strategic interests that will guide Pentagon budget cuts in coming years is expected to propose keeping fewer troops in Europe and abandoning the goal of maintaining a force that can fight and win two wars simultaneously, administration officials say.

Defense Secretary Leon Panetta will unveil the results of the eight-month strategic review on Thursday at a joint news conference with Army General Martin Dempsey, chairman of the Joint Chiefs of Staff, the Pentagon said on Tuesday.

The review is expected to propose the removal of another brigade of Army combat troops from Europe, leaving two brigades still on the continent, one administration official said. A brigade consists of some 3,000 to 4,000 troops depending on its configuration.

"That's a very real possibility, but not a new one," said another administration official, who spoke on condition of anonymity. "It's an idea - and even a plan - that's been kicked around for years."

The review is also expected to include a recommendation that the United States abandon its long-held goal of being able to fight and win two wars simultaneously, the first administration official said.

Instead, the United States should aim to fight and win one major war while being able to meet and "spoil" any aggressive designs by a second adversary, said the official, who also spoke on condition of anonymity ahead of Thursday's news conference.

The review was initiated by former Defense Secretary Robert Gates after President Barack Obama asked defense officials to cut some $400 billion in planned spending over 12 years without jeopardizing the country's strategic interests.

The spending reductions, while not yet set in stone, are expected to trim the number of military and civilian defense personnel, delay or cut back on some high-profile weapons systems like the radar-evading F-35 Joint Strike Fighter and take steps to control spiraling health-care costs.

The Pentagon and White House declined to discuss the contents of the review, but White House spokesman Jay Carney said Obama had been "deeply involved" in the process, meeting Panetta, Dempsey and others, including top combat commanders.

Carney said the strategy recognized "that we are at a turning point after a decade of war, with new challenges and opportunities that call for a reshaping of our defense priorities."

The results of the review come as the Pentagon begins a broad discussion of spending issues ahead of the official February 6 release of President Barack Obama's budget for the 2013 fiscal year, which begins in October.

Panetta decided to preview the strategic review early in the year to give lawmakers ample time to absorb and digest it ahead of the formal budget announcement, one defense official said.

NO 'BLOODBATH'

Former Defense Secretary Robert Gates made a similar move last January and Pentagon leaders felt it was "a good way of doing it," the defense official said.

A second senior defense official said Panetta would unveil some details affecting major weapons programs but added that he did not expect a big number of program cancellations or the kind of "bloodbath" Gates announced in April 2009, when he killed or cut back on many weapons systems.

Major U.S. defense contractors like Lockheed Martin, Boeing and Northrop Grumman have been anxiously awaiting news about any major program cuts in the new budget.

The senior defense official, who spoke on condition of anonymity, said the cuts were "not going to be without pain for industry."

One source briefed on the Pentagon's budget plans said Panetta would announce delays in several new weapons programs, including a two-year delay in work on a replacement for the Ohio-class submarine and a two-year delay in work on a second new Ford-class aircraft carrier.

Panetta was also expected to announce slower production rates for the radar-evading F-35 Joint Strike Fighter, the Pentagon's largest procurement plan.

Rather than major program cuts, the source said the bulk of the cuts for the 2013 fiscal year were expected to come from the production delays as well as troop reductions and changes in healthcare and retirement benefits.

Obama and Congress, in an effort to get control of the government's huge deficits, agreed last year on a budget deal that could cut projected defense spending by more than $1 trillion over the next decade.

The first round of cuts will reduce spending by $350 billion to nearly $500 billion, depending on whether it is compared to Congressional Budget Office projections or the Pentagon's own projections of defense spending.

The Defense Department is facing a second round of across-the-board cuts that could reduce spending by another $600 billion after a so-called congressional "super committee" failed to agree on alternative ways to reduce the budget.

It was unclear whether senior congressional leaders had been briefed yet on the final details of the strategic review, but one committee staffer said Panetta had met with eight top lawmakers late last year.

"We would be surprised if any announcement he made this week strayed too far from that conversation," the staffer said on condition of anonymity.

(Additional reporting by Caren Bohan and Laura MacInnis; editing by Todd Eastham)

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