* Carter says budget caps will force bad management decisions
* Hearing follows Hagel's review of budget cut options
* Analysts welcome findings but say Pentagon can go further
By David Alexander
WASHINGTON, Aug 1 (Reuters) - A day after the Pentagon outlined the stark choices it confronts due to looming budget cuts in coming years, top defense officials pressed Congress to give them the time and flexibility to make the reductions without undermining security.
Deputy Defense Secretary Ashton Carter warned lawmakers on Thursday that the Pentagon could not hit its budget targets under the law in the next few years without "drastic measures that are not strategically or managerially sound," like grounding aircraft or putting employees on unpaid leave as was done this year.
"It takes time to downsize forces, to cut employees, to close bases, to reap savings from reforms. These strategic adjustments take time," Carter told a committee in the House of Representatives. "Flexibility and time is essential."
Carter's remarks came at a hearing of the Armed Services Committee as the Pentagon struggles to implement $500 billion in across-the-board budget cuts under a mechanism known as sequestration, on top of $487 billion in spending reductions already under way.
Carter briefed the panel on the results of Defense Secretary Chuck Hagel's four-month Strategic Choices and Management Review, which laid out options for addressing the various levels of budget cuts over the next decade in the face of uncertainty about how much the department will be forced to trim.
The cuts are required by the Budget Control Act of 2011, which ordered the initial cut in defense spending over a decade and added the sequestration cuts unless Congress and the White House could reach a deal on an alternative. Despite initial expectations of an accord, no agreement has been reached.
Defense analysts have welcomed the findings of the review, which were released on Wednesday, saying they showed the Pentagon had finally recognized the need to adapt to the new budget climate and begun plan for a drawdown after years of denial. But they also said the department needed to go further.
"For the first time DoD (Department of Defense) seems to be kind of ponying up to the fact that sequestration is now the base plan," said Jim Thomas, a vice president at the Center for Strategic and Budgetary Assessments think tank. "You'd better be planning for sequestration."
"The (review) was a start and it's taking some steps I think in the right direction, but it still has a long way to go," he told a briefing for reporters.
Hagel's review called for $40 billion in cuts over the next decade to be taken from the overhead for defense agencies and military headquarters. It also called for further cuts to the Army and Air Force.
The review warned that full implementation of the $500 billion in sequestration cuts over a decade would force the Pentagon to choose between force size and high-end weapons systems - capacity versus capability.
That could result in a much smaller military with advanced weapons systems and capabilities like the radar-evading Joint Strike Fighter, or a larger force with fewer advanced weapons and little devoted to developing new capabilities, it found.
But analysts said the Pentagon had failed to fully examine the need to take cuts in other areas, like military readiness and the department's growing civilian work force.
Mackenzie Eaglen, a defense analyst at the American Enterprise Institute think tank, said the Army, Navy, Air Force and Marine Corps had cut uniformed personnel over the past decade or were in the process of doing so, while the Pentagon's civilian work force had grown over the past four years.
"I was obviously very disappointed in the lack of any serious detail or substantive thinking or rational plan for drawing down the civilian work force," she told a briefing.
"It's just a remarkable disparity," Eaglen said. "DoD is targeting one work force over another. There's a real problem with that."
Analysts said the department also had pledged to protect military training and readiness, but would ultimately have to accept cuts there as well.
"You're going to end up making a readiness cut no matter what," said Todd Harrison, a defense analyst at CSBA. "Your choice is how intelligently do you do that."