The Defense Department's core fiscal 2013 budget at $525.4 billion reflects the already announced one percent reduction from the current year, which comes from reducing Army and Marine personnel and ending or limiting purchases of expensive new equipment. It spells out in more detail the how the administration plans to cut future expenses related to the personnel reductions, by establishing commissions to take on the controversial tasks of reducing or closing military bases and updating military retirement programs.

The Pentagon's proposed overseas contingency operations spending of $88.5 billion in fiscal 2013 is down from $115.3 billion and reflects the planned reductions in Afghanistan and withdrawal of combat troops from Iraq. It also contains $2.9 billion to pay for Iraq-related Defense Department costs including replacing munitions and equipment and the operation of the Pentagon office in Iraq that supervises receipt of U.S. military equipment and other security assistance.

In the core budget, one new twist on the so-called Base Realignment and Closure (BRAC) process will be a second non-partisan independent commission to review the recommendations that emerge from the BRAC groups, which themselves will recommend the always controversial base readjustment actions.

For the other sensitive review, a proposal will be sent to Congress for establishment of a Military Retirement Modernization Commission to recommend "improvements" in the system. The commission would be appointed by the president and hold hearings on Defense Department recommendations. The commission, in turn will make final recommendations in the form of legislation but only applicable to future members of the military. The president would review that legislation and determine whether or not to send it to Congress. The Congress would then have an "up or down" vote on the proposal. In form, the retirement review proposal follows an earlier budget reduction proposal which failed to pass Congress.

The budget also renews requests for changes in military health program copays, enrollment fees and pharmacy purchase for active service personnel, retirees and their families. Several of them were either modified or turned down by Congress this year.