Panetta: Smaller military means more risk

President Barack Obama, accompanied by Defense Secretary Leon Panetta, second from left, and others, speaks on the Defense Strategic Review, Thursday, Jan. 5, 2012, at the Pentagon. AP Photo

WASHINGTON - The Pentagon chief says the U.S. will have to make some tradeoffs and take some extra risks under the new military strategy laid out to absorb federal budget cuts.

Defense Secretary Leon Panetta unveiled the strategy Thursday in a news conference with President Barack Obama and the top ranking U.S. military chief, Gen. Martin Dempsey.

Panetta said future budgets will mean smaller U.S. armed forces and some greater risk. But he said the country does not have to choose between national security and fiscal responsibility.

Panetta said at this point in history, in a changing world, the Pentagon would have been forced to make a strategy shift anyway. He says the money crisis merely forced the government to face the shift that is taking place now.

The new national defense strategy addresses two issues at once. It streamlines the military in an era of tighter budgets and reassesses defense priorities in light of China's rise and other global changes.

Overall, the new defense strategy hints at a reduced U.S. military presence in Europe and says Asia will be a bigger priority. It also emphasizes improving U.S. capabilities in the areas of cyberwarfare and missile defense.

China is a particular worry because of its economic dynamism and rapid defense buildup. A more immediate concern is Iran, not only for its threats to disrupt the flow of international oil but also for its nuclear ambitions.

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