By Larry Shaughnessy
WASHINGTON (CNN) - Defense Secretary Chuck Hagel quoted President Dwight Eisenhower Wednesday, telling rising military officers "the wise and prudent administration of the vast resources required by defense calls for extraordinary skill."
In his first major policy speech since taking over the Pentagon, Hagel focused on the budget problems facing the Defense Department and the rest of the government.
"A combination of fiscal pressures and a gridlocked political process has led to far more abrupt and deeper reductions than were planned for or expected. Now DoD is grappling with the serious and immediate challenge of sequester - which is forcing us to take as much as a $41 billion cut in this current fiscal year," Hagel said at the National Defense University at Fort McNair.
He warned that much of the burden of that fiscal pressure will fall on DoD employees.
"Fiscal realities demand another hard look at personnel - how many people we have (military and civilian), how many we need; what these people do, and how we compensate them for their work, service, and loyalty with pay, benefits and health care," Hagel said.
The secretary warned that furloughs could have an impact in the Pentagon. "Across-the-board reductions of the size we are looking at will demand that we furlough civilian personnel, which could affect morale and may impact productivity."
But Hagel said the answer is not, as is often proposed, running the Defense Department like a business. "The military is not, and should never be, run like a corporation. But that does not mean we don't have a good deal to learn from what the private sector has achieved over the past 20 to 30 years."
But in spite of the concern about fiscal issues, Hagel reminded the officers in the audience that the DoD's main goal remains protecting the country.
"The goal of the senior leadership of this department today is to learn from the miscalculations and mistakes of the past drawdowns, and make the right decisions that will sustain our military strength, advance our strategic interests and protect our nation well into the future."