Panetta, testifying Wednesday before the Senate Appropriations Committee's defense subcommittee, said some members of Congress have challenged proposals to eliminate older military equipment and reduce the number of troops.
"Some of the bills seek to reverse the decisions to eliminate aging and lower-priority ships and aircraft," Panetta said. "My concern is that if these decisions are totally reversed, then I've got to find money somewhere … to maintain this old stuff."
He said keeping outdated equipment in service would pull funds from other areas and lead to a military that is not trained, manned or equipped to meet current and future threats, the Defense Department said Wednesday.
"We've got to be able to retire what is aged and what we can achieve some savings on," Panetta said.
The defense secretary said some members of Congress have objected to plans to reduce the active Army from roughly 560,000 to 490,000. The Marine Corps will downsize from 202,000 to 182,000 over five years.
"Again, if I have a large force and I don't have the money to maintain that large force, I'm going to end up hollowing it out, because I can't provide the training [and] I can't provide the equipment," Panetta said.
The defense secretary also defended plans to increase fees for retiree healthcare and limit active-duty pay raises after 2013.
Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff testified Wednesday to the danger of massive cuts that would be triggered under sequestration if Congress fails to approve the needed cuts
"So before giving us weapons we don't need or giving up on reforms that we do need, I'd only ask you to make sure it's the right choice, not for our armed forces but for our nation," Dempsey said.
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