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Hagel sees eye-to-eye with Panetta on Pentagon budget, source says

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Defense Secretary-designate Chuck Hagel's views on the military budget correspond with those of Pentagon chief Leon E. Panetta, who opposes automatic spending cuts that are set to begin March 1, according to a source close to the Senate confirmation process.

In a September 2011 interview in the Financial Times, Mr. Hagel said: "The Defense Department, I think in many ways has been bloated … I think the Pentagon needs to be pared down." His comments sparked concern among those who fear he would gut the defense budget.

However, Mr. Hagel supports a military budget based on strategic needs and backs the national defense strategy introduced last January, the source said.

Mr. Panetta has said the Pentagon's ability to implement that strategy would be threatened if automatic budget cuts, known as sequestration, occur.

Mr. Hagel also opposes sequestration, which would cut $500 billion from the military budget over the next decade, the source said. In particular, the former Nebraska Republican senator is worried about how troops and their families could be affected.

"He'll carry on the legacy of [Robert M.] Gates and Leon Panetta, who understands that we've been in a tough period of national security tough challenges and that we need to think very strategically about how we move forward as a department and as a nation," the source said, referring to Mr. Panetta's predecessor in the Pentagon.

Mr. Hagel received his first briefing on the defense budget last week, the source said. The nominee's confirmation hearing before the Senate Armed Services Committee is expected to be held as early as this month.

Mr. Panetta said Thursday that the Defense Department already is working to reduce the $1.2 trillion deficit the U.S. is seeking to close over the next decade.

"Let me be clear: This department is doing its part to help confront the nation's deficit problem. We have implemented in our budget plan the $487 billion in spending reductions that we were asked to do by Congress over the next decade," Mr. Panetta said.

Sequestration will take effect March 1 unless Congress agrees on how to shrink the deficit. If it occurs, about $42 billion would have to be cut from the Pentagon's budget over the last seven months of the fiscal year, which ends Sept. 30.

Congress also needs to pass the fiscal 2013 defense appropriations bill by March 27. The Pentagon is operating on a continuing resolution that is based on the fiscal 2012 defense budget; if it is merely extended, would force the Defense Department to spend based on 2012 levels.

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