comptroller robert hale said on this show just last week that the change could add billions in unbudgeted costs. but he added several caveats. first, the change doesn't fully kick in until 2014 when companies can start charging 25% of their higher allowable costs, steadily ramping up over four years. second, the government's exposure depending on the health of individual companies' pension plans. third, d.o.d. would ask contractors to br in mind the government's tough financial straits. using traditional financial arit ma particular, lockheed martin is underfunded, general dynamics by 33% and northrop grumman 14%. it's hard to see how companies will forego allowable costs given their responsibility to maximize shareholder returns. still, hale deserves credit for mentioning a potential problem. d.o.d. must now know how these problems affect their plans. with so little wiggle room, not planning for known expenses is a risk it can't afford to take. thanks for joining us for "this week in defense news," i'm vago muradian. you can watch this program online at defensenewstv.com or you can e-mai

we also have robert hale. i want to think secretary panetta for being here today.time since the secretary of defense has . before secretary of defense has . before the senate budget committee. as a former omb director and house budget committee chairman, secretary panetta understand the important role of the budget committee and we especially appreciate his willingness to appear here today. secretary pam -- secretary panetta told me he would come today and i appreciate his keeping that promise. we look forward to his testimony as well as that of general dempsey and controller hail. we also understand the time constraints that you are under. we recognize that you have many issues on your plate. especially with what is happening in syria and the middle east and of course north korea's and china and russia and on and on it companies. we recognize the heavy burden on your shoulder. we will keep our commitment to get you out of here as expeditiously as possible. i want to begin by highlighting the budget crisis facing the country. despite the progress in bell last summe

robert hale who is known for a service of the congressional budget office. rock and back. rototill last year's request the president's budget calls for a $480 billion reverses benning which comes on top of already planned spending reductions. the notices remains a nation of more and archer to raining gauged in a fierce and the overseas. is difficult to square this reality with the president's steel production in both japan levels and funding levels. raising serious concerns of decisions being driven as opposed to a strategic perris. i think you have a unique perspective on the tension between the national security requirements in getting spinning deficits and debt under control. all they have yet to offer a balanced budget our perris and responsibilities as policymakers. defense spending should be executed with the efficiency and accountability. many fear the arbitrary and deep reductions that the president has proposed and the defense budget would lead to erratic production. i commend you for your efforts to fund various according to harvard kneele ferguson, the fall of g

we also welcome the department of defense comptroller the honorable robert roi hale. again, welcome back, secretary hale. a relative to last year's request, the president's budget calls for a 487 billion-dollar reduction in reduction over the next decade. this comes on top of the already planned spending reduction for the global war on terrorism. the united states remains a nation of war and troops remain engaged in the fierce enemy overseas. it's difficult to square this reality with the steep reduction in the troop levels and funding levels. the timing raise concerns but the decisions are being driven by budgetary concerns as opposed to strategic priorities. mr. secretary, i think you have a unique perspective on the tension between the requirements and getting spending deficits and debt under control. while yet to offer their balanced budget our friends have called for a balanced approach. of course budgeting is about setting priorities such calls assume all the activities are equally important, the proportion of the can substitute for the clear analysis of the pri