Outgoing Defense Secretary Robert Gates said yesterday that while difficult cuts are inevitable in the defense budget, unneeded weapon systems already have been eliminated and major ones being developed are vital.

In what was billed as his last major policy speech, the retiring head of the Department of Defense said to achieve President Barack Obama’s goal of $400 billion in security savings over 12 years, “real cuts” and “real choices” need to be made. A review of Pentagon spending Gates launched last week could impact “places that have been avoided by politicians in the past,” including military compensation, retirement pay, and health-care coverage, he said.

“But, above all, if we are to avoid a hollowing effect, this process will need to address force structure: the military’s fighting formations such as Army brigades, Marine expeditionary units, Air Force wings, Navy ships and supporting aviation assets,” Gates said at the American Enterprise Institute for Public Policy Research in Washington. “The overarching goal will be to preserve a U.S. military capable of meeting crucial national security priorities even if fiscal pressure requires reductions in that force’s size.”

He warned that the public needs to understand the implications of reducing the resources and the size of the U.S. military, saying: “To shirk this discussion of risks and consequences–and the hard decisions that must follow–I would regard as managerial cowardice.”

Yet when it comes to procurement of weapons systems, Gates said efforts to cancel or curtail more than 30 programs over the past two years–including the defunct Future Combat Systems Army modernization effort and Airborne Laser for missile defense– have been appropriate. Going forward, he said, it is “vitally important” to protect military modernization accounts.

“When it comes to our military modernization accounts, the proverbial low-hanging fruit–those weapons and other programs considered most questionable–have not only been plucked, they have been stomped on and crushed,” he said. “What remains are much-needed capabilities–relating to air superiority and mobility; long-range strike; nuclear deterrence; maritime access; space and cyber warfare; ground forces; intelligence, surveillance and reconnaissance–that our nation’s civilian and military leadership deem absolutely critical.”

Gates said new efforts–such as an Air Force bomber, an Army Ground Combat Vehicle, and a Marine Corps amphibious vehicle–when compared to cancelled programs “are on a far more realistic footing that relies on proven technology and can be produced on time and on budget.”

He dubbed as crucial a new Air Force tanker aircraft, the multi-service F-35 Joint Strike Fighter, a larger fleet of Navy ships, recapitalized vehicles and helicopters for ground forces, and a new ballistic-missile submarine. He highlighted the work of Pentagon acquisition officials to lower the projected cost of that SSBN(X) submarine by $2 billion, but said the current $5 billion per ship cost still presents “some serious issues for the Navy’s shipbuilding budget down the road.”

Gates pointed to efforts to reverse “an unsustainable course where more and more money is consumed by fewer and fewer platforms that take longer and longer to build” by reforming the acquisition process and the Pentagon’s “buying culture.”

“The goal is that any new weapons system should meet benchmarks for cost, schedule and performance while minimizing requirements creep–the kind of indiscipline that leads to $25 million Howitzers, $500 million helicopters, $2 billion bombers, and $7 billion submarines,” he said.

He called for a “guiding principle” for future procurements: “to develop technology and field weapons that are affordable, versatile, and relevant to the most likely and lethal threats in the decades to come, not just more expensive and exotic versions of what we had in the past.”

Gates reiterated his concern that the current budget-cutting exercise not simply result across-the-board defense cuts of a set percentage.

“That kind of salami-slicing’ approach preserves overhead and maintains force structure on paper, but results in a hollowing-out of the force from a lack of proper training, maintenance, and equipment, and manpower,” he said.

As the Pentagon moves forward without him, Gates said, “unless our country’s political leadership envisions a dramatically diminished global security role for the United States, it is vitally important to protect the military modernization accounts–in absolute terms, and as a share of the defense budget.”

Pentagon spokesman Geoff Morrell said Gates did not specify budget cuts in his speech because the “comprehensive budget review (Gates) launched last week is designed to identify specific cuts and consequences for the president’s consideration.”

“He does not want to get out ahead of that process and constrain the review team’s thinking,” Morrell said. “He has granted them wide latitude and does not want to hamstring them in any way.”

Gates, a holdover from former President George W. Bush’s administration, is planning to step down in the end of June. Obama has tapped current CIA Director Leon Panetta to serve as the next defense secretary.