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Panetta Paints Budget Picture in NY Times Interview

Defense Secretary Leon Panetta

Once considered not on the table, cuts to health and retirement benefits are being considered by Defense Secretary Leon Panetta, according to a report by the New York Times.

The Pentagon is facing budget cuts of $450 billion, between 7 and 8 percent of its budget, over the next decade. During an interview with the Times, Panetta said he is also considering base closings and cuts to the U.S. nuclear arsenal.

It is also possible that the Pentagon could reduce the number of U.S. troops based in Europe, allowing the U.S. to maintain or increase its presence in Asia, particularly in the Persian Gulf region.

Panetta said spending on cyber capabilities, drones and special forces would either be maintained or increased.

“We’re going from three cops to two cops in a pretty rough neighborhood,” Panetta said in the interview. “We’re going to be developing a smaller, lighter, more agile, flexible joint force that has to conduct a full range of military activities that are necessary to defend our national interests. So even though they’re going to be smaller and lighter, we’ve got to make sure they always maintain a technological edge.”

But the most sensitive area of cuts being considered will be to Tricare, the military’s health insurance program. Military retirees and families enrolled in Tricare currently pay $460 a year in co-pay. Last month, the Pentagon began phasing in higher annual fees, with new military retirees with families enrolling in Tricare paying $520 per year.

Panetta previously said any changes to military retirement would not affect those currently serving and added he might support a change which would allow troops who served less than 20 years to receive some retirement pay. Currently, only soldiers who have served at least 20 years receive retirement pay, half of their final annual base pay, for life.

“Are there ways, looking at the retirement piece, where those who serve 10 or 12 years might be able to take that retirement with them?” Panetta said.

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