Pentagon Shrinks 2013 Budget

    Defense Secretary Leon Panetta, accompanied by Joint Chiefs Chairman Gen. Martin E. Dempsey, outlines the main areas of proposed spending cuts during a news conference at the Pentagon, Thursday, Jan., 26, 2012. (AP Photo/Pablo Martinez Monsivais)

    Pablo Martinez Monsivais / AP Photo

    The Pentagon on Thursday announced a proposal to shrink its budget next year, for the first time since 1998. The plan will include cutting the size of the Army and the Marine Corps, closing bases in the U.S., and limiting pay raises in 2015. The 2013 budget is set to be $525 billion, down from $531 billion this fiscal year. The cuts are part of President Obama's deficit-reduction deal reached with Congress that will see defense spending reduced by $487 billion in 10 years, though the pay raise cuts will likely be fought by Congress.

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