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Before budget rollout, Pentagon official says military must shrink

By David Alexander

WASHINGTON (Reuters) - The U.S. military must shrink in coming years as it tries to balance less spending with investments to stay ahead of potential Asian rivals, a leading Pentagon official said just weeks before a new defense budget is rolled out.

Acting Deputy Defense Secretary Christine Fox, speaking to a naval conference in San Diego, said the U.S. military could not risk falling behind in a race for technological superiority as China and other countries increase defense spending at a time of declining Pentagon budgets.

"The military must get smaller over the next five years," she said. "It is not an ideal course of action. It contains real risks. ... But given current realities, it is the only plausible way to generate the savings necessary to adequately fund training, maintenance, and sustain the military's technological superiority for the next generation."

Fox's remarks come just weeks before the Pentagon is to unveil its budget for the 2015 fiscal year, which begins on October 1, as well as the 2014 Quadrennial Defense Review, a long-term planning document that maps the connection between strategy and spending.

Fox is serving as acting deputy defense secretary until Congress confirms the nomination of Robert Work, the former Navy undersecretary chosen by President Barack Obama last week to replace former Deputy Secretary Ashton Carter.

Fox told the conference in San Diego that the United States had made progress in its strategic shift to the Asia-Pacific region but that the effort was marked by uncertainty due to declining U.S. budgets and the direction of China's military modernization.

"It is no secret that China is developing its military capabilities designed to thwart the freedom of movement of others in the region and to expand their influence," she said.

Fox said the focus of Beijing's military modernization, which is seen as undermining U.S. strengths, was particularly worrying because even if its systems are never directly used against U.S. forces, they may be sold to other countries more likely to be in conflict with the United States.

"Those of us entrusted with leadership positions ... do not wish to see the U.S. lose its decisive advantage or end up in a situation of parity against any military power," she said. She added that that would reduce U.S. influence, heighten rivalries and raise the chances of conflict.

Fox said that while the United States had a margin of military superiority in the Pacific today, American dominance "can no longer be taken for granted going forward."

The potential threat to Navy ships from precision anti-ship missiles like those being developed by China puts "a premium on undersea capabilities - submarines - that can deploy and strike with relative freedom of movement," Fox said.

The threat from longer-range missiles also means that U.S. aircraft, be they bombers, fighters, drones or missiles, would need to be able to strike from secure locations farther away or from ships that can protect themselves from aerial assault.

"Given more advanced anti-ship munitions being developed by potential adversaries, I believe it is an imperative to devote increasing focus and resources to the survivability of our battle fleet," she said.

In an apparent reference to vessels like the Navy's new Littoral Combat Ship, Fox said "niche platforms" capable of operating in "permissive environments" had a valuable place in the Navy but said greater attention needed to be placed on firepower.

Some critics have charged that the Littoral Combat Ship, which has just begun to be built and deployed, is unlikely to be able to survive a confrontation with a vessel bigger than a pirate speedboat. Recent reports have suggested the Pentagon may reduce its purchase of the ships by 20, to a total of 32.

"We need more ships with the protection and firepower to survive against a more advanced military adversary," Fox said. "Presence is important, presence with a purpose and with capability."

(Reporting by David Alexander; Editing by Jonathan Oatis)

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