WASHINGTON (REUTERS) - Defence Secretary Chuck Hagel told the US military on Wednesday to brace for a new round of belt-tightening as he carries out a sweeping review that could slash the number of generals, pare back civilian workers and stem spiraling costs of new weapons.
However, Mr Hagel, in his first major policy speech, also warned that the United States could not allow its current fiscal and budgetary crisis to force it to retreat from its role in the world.
"America does not have the luxury of retrenchment - we have too many global interests at stake, including our security, prosperity and future. If we refuse to lead... someone will fill the vacuum," he said in remarks prepared for delivery to students at the National Defence University in Washington.
But at the same time, he stressed the limits of military power, saying that most of the world's pressing security challenges have political, economic and cultural components and "do not necessarily lend themselves to being resolved by conventional military strength".
Mr Hagel took the helm at the Pentagon in February as it was struggling with US$487 billion (S$602 billion) in budget cuts over a decade beginning last year. An additional US$500 billion in cuts over a decade began March 1 under the across-the-board cuts known as sequestration.
Under those cuts, the Pentagon must slash US$41 billion by Sept 30, the end of the 2013 fiscal year. Next year, it is facing another US$50 billion in cuts unless Congress and the White House agree on alternatives to reduce federal budget shortfalls.
At the same time, Mr Hagel, a Vietnam veteran, is winding down the war in Afghanistan and grappling with a host of security challenges, from North Korea's threats to Iran's nuclear advances and the possibility of cyber attack from several countries.