Obama unveils defence cuts
US PRESIDENT Barack Obama unveiled a 2013 defence budget yesterday that proposes cuts in Pentagon spending for the first time since 1998, slashing military personnel costs and weapons purchases as it trims $487bn (£308.7bn) in projected outlays over the next decade.
The President’s spending plan calls for a Pentagon base budget of $525.4bn, about $5.1bn less than approved in 2012.
The cost of US wars abroad would fall 23 per cent, to $88.5bn, primarily due to the US withdrawal from Iraq and a drawdown in Afghanistan.
Shares in UK-listed defence giants such as BAE Systems and Qinetiq were left unchanged by the news, however, as the firms have already looked to other markets to offset spending cuts in the UK and US.
The defence budget slashes personnel costs by $6.7bn as the military begins to cut its overall force size by about 100,000 troops over five years. The Army is to take the bulk of the reductions – about 72,000 soldiers.
The budget also would delay development of the Army’s ground combat vehicle, saving $1.3bn over five years, and reduce the Navy’s shipbuilding program, for savings of $13.1bn.
The spending plan terminates one version of the Global Hawk unmanned surveillance drone, a defence weather satellite system and the C-27A transport plane, for total savings of $9.6bn over five years.
FAST FACTS | DEFENCE SPENDING
● The United States has pledged to cut $487bn from its defence budget over ten years
● This comes after the UK said in October 2010 that it would trim eight per cent from its £33bn annual defence budget over five years