The Pentagon should further scale back production of the F-35 Joint Strike Fighter to absorb additional spending reductions that could occur even if sequestration is avoided, according to the conclusions of an exercise conducted by the Center for Strategic and Budgetary Assessments (CSBA).

The CSBA released a report (Strategic Choices: Navigating Austerity) recently of the study it conducted in July by establishing seven teams of about 10-12 individuals representing various entities in the defense establishment, from the military services to congressional staffers and industry officials, as well experts in the think tank community.

They were told to develop a military strategy while identifying $512 billion in cuts over the next 10 years, an amount roughly equal to the across-the-board reductions that would take place if sequestration cannot be averted by Jan. 2.

The authors of the study, Todd Harrison and Mark Gunzinger, argued the Pentagon will likely face those cuts as part of a congressional budget deal anyways, even if not in the draconian manner outlined under sequestration. Unlike sequestration, the teams were therefore given the flexibility to program the cuts and identify spending priorities in the process of developing a military strategy, they said.

While the teams presented differing conclusions and approaches, there was universal agreement on cutting back on the Lockheed Martin [LMT]-built F-35, which has been plagued by cost overruns and scheduling delays. One team called for canceling the program all together.

The JSF program is now estimated to cost nearly $400 billion for the procurement of 2,776 stealth fighters for the Air Force, Navy and Marine Corps, with the total life-cycle cost that includes operations and maintenance expected to exceed $1 trillion in the decades ahead.

There were four areas of consensus among the CSBA teams identifying the “crown jewel” priorities that should be protected and receive sustained investment: special operations; defense and offensive cyber capabilities; the Air Force’s Long Range Strike Program and unmanned aerial vehicles for countering anti-area access denial; and submarines over surface ships.

Five of the seven teams concluded that various levels of near-term cuts to readiness were necessary. Those teams rationalized that with the military coming off of two wars over the last decade readiness levels are already high, and that cuts would be needed in the short run to sustain a high level of readiness in later years, Gunzinger said.

The five teams reasoned that “we can take some risk in the near term by reducing readiness to improve future readiness by putting that money that we saved into modernization programs, which will help us be a better prepared force in the future,” Gunzinger said. The other two teams believed doing so would risk hollowing out the force, he added.