The Department of Defense (DoD) FY2014 budget request balances the demands of supporting troops at war, protecting readiness, and modernizing an aging weapon systems inventory, Secretary of Defense Chuck Hagel told a congressional committee yesterday.

Testifying yesterday with General Martin Dempsey, Chairman of the Joint Chiefs of Staff, before the House Armed Services Committee, Hagel sad the budget request of $526.6 billion reflects the department's "best efforts to match ends, ways, and means."  However, DoD has had to prepare this budget and the long-term budget plan "during a period of intense fiscal uncertainty."

Hagel focused on the debilitating effect sequestration is having on defense capabilities.  The prospect of a $41 billion across-the-board cut in FY2013 followed by another $52 billion reduction in FY2014 and a potential total cut of $500 billion over the next 10 years is disrupting operations now and complicating future planing, he lamented.

Especially highlighting the difficulty of absorbing the sequestration cuts in FY2013, Hagel said these cuts would have to made at a time when when  the Services are "experiencing higher operating tempos and higher transportation costs."

Hagel emphasized that that the president's alternative to sequestration, including $150 billion in defense savings over the next 10 years, would give DoD "time to plan and implement the reductions wisely and responsibly."

In discussing the FY2104 budget, Hagel said it reflects a number of choices necessary to reach a series of complimentary goals:  making more disciplined use of defense resources; implementing the president's strategic guidance, sustaining the readiness and quality of the force; and supporting troops deployed to Afghanistan.

He identified initiatives DoD is undertaking to make more disciplined use of its resources.  To reduce support costs, the FY2014 budget proposes another Base Realignment and Closure (BRAC) round in FY2015, a study of Military Treatment facilities with a goal of reducing underutilization; additional changes to TRICARE; and continued progress to improving financial management and achieving auditable financial statements.

The FY2104 budget plan also shift priorities within modernization programs to achieve savings of $8. billion, he said.  The Army revised its acquisition strategy for the Ground Combat Vehicles (GCV) program, savings $2 billion.  Realigning funding and restructuring the SM-2 IIB Interceptor saves $2 billion.  Canceling the Precision Tracking Space Satellite system saves another $1.9 billion, Hagel said.

Implementing the president's defense strategic guidance also required hard choices.  The force will be smaller and leaner, Hagel said.  The long-term plan calls for a reduction of 100,000 in military end strength by 2017.  by the end of FY2014, Hagel said almost two-thirds of the planned reduction to ground frorces will be achieved.

The budget resubmits several force structure proposals Congress rejected last year.  These include retiring seven Aegis cruisers and two amphibious ships by the end of FY2014.  While the budget adds back aircraft to the Guard and Reserves Hagel reminded the committee this decision is primarily a political, not a strategic or analytical one. He said DoD's position continues to be that retaining unnecessary air capacity in the reserve component redirects funding from more pressing needs.

Even in the face of hard choices to achieve savings, the FY2014 budget includes investments in rapidly deployable, self-sustaining forces that are important to increased emphasis on the Asia-Pacific and Middle East regions, Hagel said.  The Navy will fund the construction of eight new ships, including to Virginia class submarines. Development of a new penetrating bomber will continue and funding will continue development of an unmanned carrier launched UAV, he underscored.

These savings enable investments in critical capabilities, Hagel emphasized.  Funding for cyberspace operations increases in FY2014 and key investments are made to space operations, airborne intelligence, Rapid Global Mobility, Missile Defense, and Special Operations forces.

These choices are necessary because "we are now in a different fiscal environment with new realities,"Hagel said.  He asked the committee members to support DoD's efforts to "sustain our military strength for the 21st century"

You can view the hearing on the HASC website.