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by Staff Writers Washington (AFP) Nov 24, 2011 Military leaders have adapted US strategy as the Pentagon faces major budget cuts, but experts fear the new plans could be shattered due to the threat of automatic financial reductions. The failure of Democrats and Republicans this week to agree a deal to cut the overall US fiscal deficit has triggered the prospect of the Pentagon automatically losing $600 billion from its coffers at the start of 2013. The Pentagon had already agreed to cut $450 billion in spending over the next decade prior to the failure of the congressional "supercommittee" to agree the deficit reduction deal. "A cloud of uncertainty will be hanging over the defense budget, potentially for the next 13 months," said Todd Harrison, senior fellow at the Center for Strategic and Budgetary Assessments think-tank in Washington. Defense officials say a "devastating" scenario can be avoided if lawmakers thrash out a deficit reduction deal before the 2013 deadline. But the Pentagon has already been conducting a strategic review due to be completed next month, amid fears a compromise will fail to materialize. The plan, which would take into account the cutbacks earmarked for the next 10 years, would involve "manageable" risks, according to Defense Secretary Leon Panetta. And President Barack Obama's administration has also indicated the strategy would place renewed focus on the Asia-Pacific region. Analysts expect the army to face the most severe cuts, after its budget swelled dramatically because of the wars in Iraq and Afghanistan. The overall 2013 military base budget is already being worked on and Harrison said the impact will see the Pentagon planning for about $525 billion in funding for the fiscal year that begins October 1, 2012 and ends September 30, 2013. If Democrats and Republicans remain at loggerheads and fail to reach a compromise, automatic cuts known as a sequester mechanism will come into force in January 2013, even though the budget for that fiscal year will have already been in effect for three months. The FY2013 budget would then drop automatically from $525 billion to $472 billion, according to Harrison's estimates. The Pentagon "has plans for all kind of contingencies" but "to date every indication is they're not planning for a sequester level of cuts," he said. "Any budget cut should be strategy-driven, you should adjust your strategy to the new budget environment, the new reality that we face." The automatic cuts, which would bring the military budget to its 2007 levels excluding combat operations, pose a grave threat to military effectiveness and the new strategy as they apply evenly across the board, leaving commanders limited room to choose where to save money. "It removes our ability to do any kind of thoughtful planning," said Captain John Kirby, a Pentagon spokesman. "There is still time for Congress to do that which the supercommittee failed to do and the Secretary (Panetta) strongly urges them to do that," Kirby added, noting the budget plan factored in the agreed $450 billion of cuts. In addition to damaging the new Pentagon strategy, budget cuts could also see Iran, China and North Korea try and take advantage of perceived US weakness, warned Michael O'Hanlon of The Brookings Institution. "It would be bad economics to jeopardize the stability of today's international system merely to induce the US federal deficit by an arbitrary percentage," he wrote in a USA Today opinion piece.
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