WASHINGTON -- The Pentagon faces the choice between a decade-long "modernization holiday" and a "much smaller" force if the military is forced to absorb continued cuts of at least $50 billion annually through 2023, Defense Secretary Chuck Hagel said Wednesday.
Even if the Pentagon takes the most draconian steps to cut forces, delay weapons modernization and wring out additional efficiencies, that won't be enough to curtail the severe impacts of the budget process called sequestration, the defense chief said Wednesday in prepared remarks.
Hagel outlined the broad dimensions of two approaches. One is deeply reducing forces, especially in the Army, while retaining a greater technological capability. The other is delaying weapons advances to maintain the force at levels currently planned.
Hagel briefed congressional committee leaders Wednesday on the "Strategic Choices and Management Review," effectively warning lawmakers they must alleviate cuts or take responsibility for the alternatives.
Rep. Howard "Buck" McKeon, R-Calif., chairman of the House Armed Services Committee, criticized the review in an e-mailed statement as being "entirely budget-driven, deferring any further consideration of strategy."
If the Pentagon cuts deeply into forces, Hagel said, the military will be able to protect certain programs such as Lockheed Martin Corp.'s F-35 fighter, a program to build a new long-range bomber and upgrades in submarine cruise missiles.
That approach calls for reducing the Army from a planned 490,000 active-duty personnel to as few as 380,000. The Marines would be reduced from a planned 182,000 to as few as 150,000.
The second option would retain the planned force, cancel or curtail "many modernization programs, slow the growth of cyber enhancements and reduce special operations forces," Hagel said.
"One of the most striking conclusions" of the review he ordered is that even if the Pentagon combines the savings from all potential options -- "including significant cuts to the military's size and capability -- the savings fall well short of meeting sequester-level cuts, particularly during the first five years of these steep, decade-long reductions," Hagel said.
Hagel said the summary provided Wednesday isn't a menu of immediate cuts or policy changes. It is intended to help shape preparation of a budget plan for fiscal years 2015 to 2019 and a Quadrennial Defense Review under scenarios that include a continuation of sequestration.
Hagel said that the sequestration levels envisioned over the decade also "would break some parts" of the current strategy that envisions a rebalance to Asia "no matter how the cuts are made."
Hagel also took aim at pay and benefits for troops, directing Army Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, to lead a study aimed at saving $50 billion over the next decade in personnel costs. He acknowledged Congress has opposed such cuts in the past.
Savings options include making military retirees use more private-sector health insurance, requiring troops to pay more toward their housing costs, reducing cost-of-living adjustments for troops stationed overseas, and continuing to limit military and civilian pay raises, Hagel said.
"Overall personnel costs have risen dramatically, some 40 percent above inflation since 2001," Hagel said. "The department cannot afford to sustain this growth."
If automatic budget cuts continue through the decade, the Pentagon will need to consider "more sweeping changes," such as restricting the availability of unemployment benefits and ending subsidies for defense commissaries, Hagel said.
While such a package would save almost $100 billion over the next decade, it would have a "significant impact on our service members and our workforce."