By CNN's Larry Shaughnessy

Secretary of Defense Leon Panetta unveiled details of a budget plan that slices half a trillion dollars in spending increases over the next 10 years and serves as a blueprint for the administration's vision of how America's military needs to change.

The savings would begin in October, the start of fiscal year 2013.



Panetta, speaking Thursday at the Pentagon, said he will request a total budget that is $33 billion smaller than the current one. All told, his plan meets Congress's mandate to reduce Pentagon spending by $487 billion in the next 10 years.

To accomplish that, Panetta said, a new strategy was developed for the military force of the future: "The military will be smaller and leaner, but it will be agile, flexible, rapidly deployable and technologically advanced. It will be a cutting-edge force."

For example, he said, the Army will save money by pulling two of its four brigades out of permanent bases in Europe to bases in the United States. But at the same time, the Army will increase rotational deployments to bases so more units will have an opportunity to train with NATO allies.

The Navy will be getting rid of older ships that don't have the latest ballistic missile defense but it will be buying new ones that will have that capability.

And this new budget may be critical for what it doesn't cut, things like spending on Special Operations forces, like the Navy SEALs who killed Osama bin Laden, as well as overall numbers of unmanned aerial vehicles like the Predator, which have been so valuable in Iraq and Afghanistan. This plan calls for more total spending on those capabilities.

If approved by Congress, the savings next year and the following nine years would be achieved by moves including trimming the numbers of troops in the Army and Marine Corps and retiring nearly a dozen older Navy ships and six Air Force tactical squadrons, as well as smaller pay raises for troops beginning in 2015.

The Army's cost savings will come from reducing the "end strength," the total number of active-duty soldiers. There are currently 556,000 soldiers in the Army, but Panetta would reduce that number to 490,000.

A similar move is being planned for the Marines, which would drop to 182,000 from the current level of 200,000 active duty Marines. Both the Army and Marine end strengths would be slightly higher than they were just prior to 9/11.

"They will be fundamentally reshaped by a decade of war - far more lethal, battle-hardened and ready," Panetta said.

Because there will be fewer soldiers and Marines to support, the Air Force is being asked to reduce its airlift fleet. The budget also calls for a reduction of six tactical air squadrons as well as one training squadron. Panetta insists "none of that will impact our ability to dominate the skies."

The Navy has perhaps the most difficult duty. Panetta and President Obama have both repeatedly said the United States remains committed to the Asia/Pacific region, which the Pentagon now supports largely through the 7th Fleet.

But the budget calls for retiring seven old cruisers and two small amphibious ships. The Navy will also delay buying a dozen new ships by a year or more to save money in the short term.

Panetta just last week announced the department's commitment to the newest generation jet fighter, the F-35 Joint Strike Fighter, which is being built for the Air Force, Navy and Marines. But Thursday he said, "in this budget, what we've done is slowed the procurement to be able to complete more testing and allow for developmental changes before we buy in significant quantities. We want to make sure before we go into full production that we are ready."

The portion of the outline that may trigger the most opposition is a plan aimed at troops' salaries and retired troops' health benefits. Panetta promised full pay raises for fiscal 2013 and 2014, but he said, "in order to achieve cost savings we will provide more limited pay raises beginning in 2015."

As for health care, he plans no changes for active-duty troops and their families but, Panetta said, it was decided that "to help control the growth of health care costs, which is now almost $50 billion in this department, we are recommending increases in health care fees, copays and deductibles for retirees,"

"But let me be clear that even after these increases, the costs borne by military retirees will remain below levels in most comparable private sector plans, as they should be," he said.

Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, made clear Thursday that he supports the plan laid out by Panetta, but admitted it does contain risks. "The primary risks lie not in what we can do, but in how much we can do and how fast we can do it," Dempsey said. "I am convinced we can properly manage them."

Of course, this is all a proposal that must go through Congress. Panetta admitted that getting Capitol Hill to buy into the plan won't be easy. "This is gonna be tough. This is a tough challenge," Panetta said. "It's very easy to talk about deficit reduction. It's very tough to do something that in fact reduces the deficit."

He said he hopes Congress does agree to these changes. "It's also an opportunity for members to show the kind of leadership that the country expects of them when it comes to dealing with this challenge."