The top U.S. military official suggested Wednesday that scheduled Pentagon budget cuts could lead to war.

Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, testified before a Senate committee Wednesday alongside Defense Secretary Leon Panetta. Both offered dire warnings about the potential impact of the automatic budget cuts, known as sequestration, which will go into effect starting next January unless Congress intervenes.

Dempsey said the cutbacks could lead to the cancellation of weapons systems and disrupt "global operations." In turn, he warned, the U.S. could lose global standing -- opening the door for enemies to test American military might.

"We can't yet say precisely how bad the damage would be, but it is clear that sequestration would risk hollowing out our force and reducing its military options available to the nation," Dempsey told the senators. "We would go from being unquestionably powerful everywhere to being less visibly globally and presenting less of an overmatch to our adversaries, and that would translate into a different deterrent calculus and potentially, therefore, increase the likelihood of conflict."

Panetta made a similar argument last year when he said the sweeping cuts could weaken the military substantially, and invite "aggression" abroad.

Yet so far, Congress has not averted the planned cuts, which were set in place after lawmakers failed to reach a broader deficit-reduction deal.

The Pentagon would face cuts of about $500 billion in projected spending over 10 years on top of the $492 billion that President Obama and congressional Republicans already agreed to in last summer's deficit-cutting budget.

Dempsey said the cuts would mean fewer troops, the possible cancellation of major weapons and the disruption of operations around the world.

Sen. Daniel Inouye, D-Hawaii, chairman of the Appropriations Committee, called the description "candid but frightening."

Panetta said layoffs of civilian employees were possible and the cuts were certain to hit military contractors, with a possible 1 percent spike in the nation's unemployment rate. The rate ticked up to 8.2 percent in May with the the economic recovery still sluggish.

Dempsey said the billions for warfighters in Afghanistan would be subject to the cuts. To avoid that drastic step, the Pentagon would look to offset the reductions with cuts in other accounts, he said. Defense comptroller Robert Hale said the president could exempt military personnel, but the reductions would affect the department's ability to pay for health care.

The Pentagon would be facing a 20 percent cut in weapons systems, training, equipment -- all elements of the budget.

"It was designed as a meat ax. It was designed to be a disaster. Because the hope was, because it's such a disaster, that Congress would respond and do what was right. And so I'm just here to tell you, yes, it would be a disaster," Panetta said.

Last year's failure of a congressional bipartisan supercommittee to come up with $1.2 trillion in spending cuts set in motion the automatic cuts that would slash domestic and defense programs by $1.2 trillion over a decade. Republicans and Democrats have struggled to come up with a budget to avert the cuts, and an answer may not emerge until after the November election, in a lame-duck session.

That could prove too late, as the fiscal year begins Oct. 1 and companies that might lay off hundreds or thousands need to notify employees 60 days in advance.

In a message to Republicans and Democrats, Panetta, the former House Budget Committee chairman and director of the Office of Management and Budget, said all elements of the budget must be part of any solution, from entitlement programs such as Medicare and Social Security that Democrats look to protect to revenue from tax increases that Republicans tend to oppose.

While Panetta appealed to lawmakers for help, he also took a swipe at members of Congress who have changed Obama's defense budget request for the next fiscal year. In the initial rounds, the House added billions to the budget, preserved weapons, ships and aircraft that the Pentagon wanted to cut and balked at the reductions in the Army and Marine Corps. The Senate Armed Services Committee, in its version of the budget, rejected the Pentagon's proposed cuts in personnel and equipment for the Air National Guard.

"In reversing difficult decisions and restoring funds to those areas that achieve necessary savings, Congress risks upending the careful balance we sought to achieve in our strategy," Panetta said in his prepared testimony. He added in the open session: "There's no free lunch here. Every low-priority program or overhead cost that is retained will have to be offset in cuts in higher-priority investments in order to comply" with last year's budget agreement.

He implored members of the Senate Appropriations Committee to follow the Defense Department's budget recommendations as it crafts a spending plan for the fiscal year beginning Oct. 1.

The Associated Press contributed to this report.