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Defense cuts may hurt contractors

Friday, January 06, 2012 - 03:00

Jan. 6 - President Obama makes cuts to defense that may hurt contractors. Karen Hendren reports.

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TV AND WEB RESTRICTIONS~*USA/CNN/AOL/YAHOO/INTERNET/WIRELESS* **~ President Obama put his stamp on a new defense strategy that calls for both a greater U.S. military presence in Asia and cuts in troop levels in Europe… as the Pentagon slices spending by nearly half a trillion dollars after a decade of war. Appearing at a Pentagon news conference President Obama released a strategy document that calls for the U.S. to maintain a force that can win one war while deterring the objectives of an adversary in a second conflict. SOUNDBITE: PRESIDENT OBAMA (ENGLISH) SAYING: "Yes our military is going to be leaner but the world must know that the United States is going to maintain our military superiority with armed forces that are agile, flexible and ready for the full range of contingencies and threats." During his presidency, Obama has moved to cut U.S. ground commitments overseas, ending the war in Iraq and drawing down troops in Afghanistan. But the new strategy calls for a shift in focus to Asia… amid increasing concern at the Pentagon over new weapons being developed by China and Iran that could make it difficult for the U.S. Navy and Air Force to project power into the Far East. U.S. Defense Secretary Leon Panetta: SOUNDBITE: U.S. DEFENSE SECRETARY LEON PANETTA (ENGLISH) SAYING: "Even as our large-scale military campaigns recede, the United States still faces complex and growing array of security challenges across the globe." The President and Congress agreed in August to reduce projected defense spending by more than $450 billion in the next decade. They also agreed on automatic spending cuts that could slash another $600 billion from the Pentagon budget unless Congress agrees to an alternative. Todd Harrison, Sr. Fellow of Defense Budget Studies says contractors building things for ground fighters may feel a big impact by the cuts. SOUNDBITE: TODD HARRISON, SR. FELLOW OF DEFENSE BUDGET STUDIES (ENGLISH) SAYING: "Specifically they said they're looking for systems not only for cyber but for space and systems that have longer reach and legs. It creates an interesting situation for the Joint Strike Fighter, the bioggest program in the DOD portfolio because it does not have the reach some of its critics would like." But Chairman of the Joint Chiefs Gen. Martin Dempsey insists that the military of the future will be smaller, leaner and agile. SOUNDBITE: GENERAL MARTIN DEMPSEY, CHAIRMAN, JOINT CHIEFS (ENGLISH) SAYING: "This is not the strategy of a military in decline. This is a strategy and a joint force in which the nation can depend." Administration officials said the U.S. is likely to cut ground forces in Europe by about 3 - 4,000. They also said Army and Marine Corps personnel numbers would likely be cut by 10 to 15 percent in the next decade, a figure that translates into tens of thousands of troops. Karen Hendren, Reuters

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Defense cuts may hurt contractors

Friday, January 06, 2012 - 03:00