We must prepare for defense budget crunch.

• Author: Farrell, Lawrence P., Jr.
• Position: PRESIDENT'S PERSPECTIVE

For years, dire warnings have sounded about an impending defense budget "train wreck" that would inevitably result from mounting Pentagon financial commitments against a backdrop of spending cuts.

The looming train wreck has not yet happened, but pundits, legislative leaders and analysts are beginning to talk about it.

Substantial growth in defense spending after 9/11 gave the Pentagon's budget a reprieve. The day of financial reckoning, however, may fast be approaching if the current state of the nation's balance sheet offers any clues.

Today, the United States is saddled by a large national debt and a rising deficit. Even if increases to military spending were to end immediately, an explosion in the growth of entitlement programs--especially Social Security and Medicare--will be very difficult to manage with 78 million baby boomers slated to retire in the coming decades.

Without fundamental reforms, the nation is headed for economic collapse, cautioned David Walker, the U.S. comptroller general. "We could be doing nothing more than paying interest on federal debt in 2040," he told lawmakers.

Just this month, outgoing Federal Reserve Chairman Alan Greenspan expressed concern that failure to deal with the exploding budget deficit would not only affect the United States but also the global economy.

As to what this means specifically for the Defense Department, the answer is that a funding derailment will occur sooner than later.

The much talked-about October memo from acting Deputy Defense Secretary Gordon England called for $32 billion in spending cuts ($7.5 billion in 2007) during the next six years.

But if we are to believe the dire predictions from Walker and Greenspan, it is clear that even a $32 billion cut hardly will make a dent.

Consequently, there could be more blood letting down the pike. Some defense industry experts have estimated the Defense Department could see a reduction of as much as $13 billion to $15 billion in 2007, alone. However, as long as we are engaged in Iraq, our troops will get the best our government and industry can provide. So while reductions might be on the horizon, the administration and Congress will be very careful with any reductions and how they are taken.

In their quest for cost savings, Pentagon planners will be looking at three broad spending areas: personnel, operations and maintenance, and procurement.

Personnel accounts--particularly in the Army and the Marine Corps--will be tough to cut, as long...