Cuts to defence budget to come primarily from the end of the war in Iraq and withdrawal from troops in Afghanistan
The White House proposes only a small cut to the Pentagon's budget next year but says that tens of billions of dollars more will be saved by no longer having to fund major military operations in Iraq and with the beginning of the US withdrawal from Afghanistan.
The president's 2013 budget proposes to reduce core defence department spending by about $5bn to $525bn – still accounting for more than 40% of military spending in the world. There is increased spending on nuclear security, cyber warfare and drone aircraft which are increasingly used for surveillance and to kill and special operations forces. The Pentagon proposes to spend $9.7bn on missile defence.
Reductions in cost are being found by cuts to personnel costs by cutting the size of all branches of the forces, including 72,000 soldiers, the retirement of nine warships and the end of seven air force combat squadrons. The US has about 1.4 million active duty personnel.
The Pentagon says it plans to reduce its strength by 5.5% over the next five years in part to fund a shift in strategic emphasis to the Asia-Pacific with long term plans for a new US military base in Australia in part to counter China's growing influence.
No major weapons programmes are cut although some are delayed.
But the outline spending plan did not address how the Pentagon will deal with sweeping cuts to military spending that will automatically kick in if Congress fails to agree to cut the budget deficit by January 2013. Under a law passed last year, the defence department would see about $500bn shorn from its spending.
The Pentagon has declined to plan for such an eventuality on the grounds that it would make the cuts more likely.
"This budget plan represents a historic shift to the future, recognising that we are at a strategic point after a decade of war," said Leon Panetta, the US defence secretary. "The plan is aligned to strategic priorities we have identified to keep America safe and maintain the strongest military in the world."
Defence is one of the few areas where many Republicans do not want to see government budget cuts.
Buck McKeon, a Republican chairman of the House of Representatives armed services committee said the budget failed "to adequately address threats posed by our adversaries".
The biggest cuts come on spending on wars – referred to in the Pentagon as "overseas contingency operations" – with the end of major US combat operations in Iraq and the drawing down of American involvement in Afghanistan expected to begin next year. Spending on conflicts will fall by nearly one quarter to $88.5bn – the first drop since military budgets swelled after the 9/11 attacks.
The Pentagon plans to cut spending on training and equipping the Afghan military by about half to $5.7bn. The reduction was not unexpected in part because the US's Nato allies were looking for reductions because of the economic crisis.
But the US still plans to spend nearly $3bn in Iraq next year on the Office of Security Cooperation which employs forces to protect Americans at the vast, fortified US embassy in Baghdad.