Pentagon To Cut $78 Billion From Budget Over 5 Years

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Defense Secretary Robert Gates announced Thursday he will cut $78 billion from the Pentagon's budget in the next five years -- money that will come from shrinking the military's ground force, increasing health care premiums for troops, and other politically unpopular cost-saving measures.

The move is part of a broader effort to trim fat from the military's mammoth half-trillion-dollar annual budget in light of the nation's ballooning deficit.

"We are not exempt from scrutiny and being asked to figure out what we are doing with less dollars,'' Gates told reporters.

Gates called his budget the minimum level of defense spending that's necessary, given what he called the "many security challenges around the world."

The plan also identifies a separate $100 billion in savings, including the cancellation of a $14 billion amphibious Marine vehicle. But here's the catch: The Marines, like the other military services, will be able to plow a lot of the savings into other programs; they'll upgrade their current amphibious vehicle.

"My sense is that he's actually pulled off one of the great Houdini acts of our time," said Kori Schake, who served on the National Security Council under President George W. Bush. "What Gates has actually done is move $100 billion from his existing budget to his existing budget."

Parts of the plan are likely to run into serious opposition from Congress. Lawmakers have fought past proposals to increase health care premiums and cut weapons programs that produce jobs in their states.

At the same time, many newly elected lawmakers are Tea Party activists, and anti-war Democrats say the Defense Department isn't doing enough to scale back.

What Gates has actually done is move $100 billion from his existing budget to his existing budget.

The Defense Department represents the largest portion of the federal government's discretionary budget.

The final plan calls for $553 billion spent in 2012 -- $13 billion less than the Pentagon wanted, but still representing 3 percent in real growth.

"There are those who feel we've gone too far and those who feel we've gone far enough,'' Gates said. "My view is we've got it about right.''

Retired Republican Sen. Alan Simpson of Wyoming wanted Gates to go further. Simpson was part of a presidential commission that proposed $100 billion cuts in one year alone, not just shifting that money within the Pentagon.

"He's a wonderful guy and I've known him a long time," Simpson said, "and to just reprogram and move stuff around inside as a saving -- it just won't get us anywhere."

Incoming House Majority Leader Eric Cantor says Republicans plan to look at the Pentagon for more cuts.

"The Republican majority, as you would expect, is going to be a majority focused on national security ... but everybody is going to have to do more with less," he said.

Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, said he and the service chiefs are fully supportive of the plan.

Under pressure to rein in deficit spending, the White House has told the Defense Department it must cut $78 billion from its budget plan covering 2012 through 2016. Gates agreed, but insisted that top-line reductions not happen until 2015 when presumably the war in Afghanistan will end.

Afghan President Hamid Karzai has said that Afghanistan plans to take control of security in its country by the end of 2014.

After that, the plan would be to let go 27,000 Army soldiers and up to 20,000 Marines to save as much as $6 billion.

Mullen called the reduction-in-force size modest and "well within the risk envelope.''

Gates said he expects to save some $7 billion by reforming the military's health care system known as Tricare, including an increase to premiums paid by military families.

NPR's Tom Bowman contributed to this report, which contains material from The Associated Press