By David Alexander
WASHINGTON (Reuters) - Defense Secretary Chuck Hagel said on Tuesday the United States must effectively use all instruments of power, not just military might, to successfully lead the world after a dozen years of war that have strained it physically and financially.
The Pentagon chief told a leading Washington think tank that Americans should not "fall prey to the false notion of American decline," and must also resist the post-war urge to retreat from foreign entanglements.
"Looking inward is just as deadly a trap as hubris, and we must avoid both in pursuing a successful foreign policy in the 21st century," Hagel told a global security forum at the Center for Strategic and International Studies.
"No other nation has the will, the power, the capacity, the capability and the network of alliances to lead the international community ... However, sustaining our leadership will increasingly depend not only on the extent of our great power, but an appreciation of its limits and a wise deployment of our influence," he said.
Hagel's remarks come as the Defense Department is winding down a 12-year-old war in Afghanistan and is struggling to meet demands to cut nearly a trillion dollars from its budgets over the next decade.
The speech underscored the administration's shift toward a more cautious approach to military force and a desire for greater reliance on diplomacy. Hagel pointed to U.S. engagement with Iran and Syria as examples where combined use of diplomatic, economic and military power are creating opportunities to advance U.S. interests.
The cuts in U.S. defense spending have eroded military training and readiness, and Pentagon officials have warned that the spending reductions would eventually force the department to reassess the global military strategy it outlined two years ago.
"These cuts are too fast, too much, too abrupt and too irresponsible," Hagel told the forum. The Defense Department "cannot responsibly, efficiently and effectively plan, strategize and implement national security policies with this cloud of uncertainty continuing to hang over it."
A senior defense official said Hagel's speech was his second dealing with how the Defense Department must adapt to "a changing strategic and fiscal landscape" since taking over as secretary earlier this year.
Hagel outlined six priorities he said would shape U.S. defense institutions for years to come, including reforming and trimming the department after a decade of growth, dealing with military readiness in a time of financial constraints and protecting investments in emerging technologies.
OFF 'PERPETUAL WAR FOOTING'
A key focus, he said, would be reforming personnel compensation, which currently consumes nearly half the defense budget and if left to grow unchecked will eventually produce a force that is "well-compensated, but poorly trained and equipped, with limited readiness and capability."
Hagel said with the end of the Iraq war and the winding down of the Afghanistan conflict, President Barack Obama has been moving the United States off a "perpetual war-footing" in which "priorities, policies and relationships around the world" were dominated by the response to the September 11, 2001, attacks.
As it looks to the future, the United States must pursue a "principled and engaged realism that employs diplomatic, economic and security tools - as well as our values - to advance our security and our prosperity," Hagel said.
He said the military would remain an essential tool of American power, but "one that must be used wisely, precisely and judiciously." Military force, Hagel said, "must always remain an option - but it should be an option of last resort."
"Our success ultimately depends not on any one instrument of power," he said. "It depends on all of them. And it depends not only on how well we maintain and fund all of our instruments of power - but how well they are balanced and integrated with each other."
(Reporting by David Alexander; Editing by Elizabeth Piper and Vicki Allen)