Washington (CNN) -- Top defense officials defended President Barack Obama's proposed $78 billion cut in Pentagon spending Wednesday, calling it a reasonable reflection of economic reality and changing military demands.
They ripped Congress's failure to pass a defense budget for the current fiscal year, however, warning that a continued unwillingness or inability to do so would have dangerous repercussions for the country's military readiness.
They also criticized Congress's unwillingness to end funding for the controversial Joint Strike Fighter second engine, a next-generation aircraft development program that has been riddled with cost overruns and labeled unnecessary by critics.
"We consider it an unnecessary and extravagant expense, particularly during a period of fiscal contraction," Defense Secretary Robert Gates told members of the House Armed Services Committee.
At the same time, however, Joint Chiefs of Staff Chairman Adm. Mike Mullen defended spending on military aid for key allies. He cautioned against an immediate reduction in the government's annual $1.3 billion aid payment to Egypt, asserting that the financial assistance has "incalculable value."
"Foolhardy would it be for us to make hasty judgments about the benefits -- tangible and intangible -- that are to be derived from forging strong military relationships overseas, such as the one we enjoy with Egypt," he said.
"Changes to those relationships -- in either aid or assistance -- ought to be considered only with an abundance of caution and a thorough appreciation for the long view, rather than in the flush of public passion and the urgency to save a buck."
Overall, the administration's proposed Pentagon budget "builds on the balance we started to achieve last year and represents the best of both fiscal responsibility and sound national security," Mullen said. We must "get more pragmatic about the world we live in."
Defense Secretary Robert Gates added that he and Pentagon officials have tried to "reduce overhead, cull troubled and excess programs, and rein in personnel and contractor costs, all for the purpose of preserving the fighting strength of America's military at a time of fiscal stress for our country."
Under the president's proposed budget, Pentagon spending for fiscal year 2012 would rise by less than one percent to slightly over $550 billion, without accounting for the military presence in Afghanistan and Iraq.
The $78 billion reduction would come over the next five years, partly reflecting diminished troop strength in the Army and Marine Corps.
Gates pointed out, however, that $68 billion of that total would come from reducing excess overhead and personnel costs, among other things. Only $6 billion would reflect changing Army and Marine Corps strength, he said, and those changes are justified in part by the sharply diminished U.S. presence in Iraq.
"Overall deployment demands on our force are decreasing significantly," Gates told the committee members. The defense secretary noted that projected force size and cost estimates are based on Obama's promised start of a U.S. withdrawal from Afghanistan in 2014.
A greater threat to the military, Gates asserted, is Congress's inability to pass a budget for the current fiscal year, which could result in an immediate effective cut of $23 billion.
"Let me be clear," he warned. "Operating under a yearlong continuing resolution or substantially reduced funding -- with the severe shortfalls that entails -- would damage procurement and research programs, causing delays, rising costs, no new program starts and serious disruptions in the production of some our most high-demand assets."
Top committee Republicans and Democrats agreed with Gates and Mullen on the need to pass a budget for the remainder of the current year. They appeared to have strongly differing opinions, however, on the administration's proposed five-year spending reduction.
Congress will scrutinize that proposal "with a fine-toothed comb," promised California GOP Rep. Buck McKeon, the committee's chairman. He said he would not support proposals that leave the military "less capable and less ready to fight."
The Army and Marine Corps "have borne the brunt of two wars for the past decade," McKeon added. "I cannot in good conscience ask them to do more with less."
Obama's proposed budget does a good job reflecting "budget realities we're all aware of," countered Rep. Adam Smith of Washington, the committee's top Democrat. "Simply spending money doesn't make us safer."
The defense chiefs defended a proposed increase in enrollment fees for working-age retirees seeking to take part in the military's "Tricare" health care program.
"These increases are modest and manageable, and leave fees well below the inflation-adjusted out-of-pocket costs set in 1995 when the current fees were established," Mullen noted.
The head of the Veterans of Foreign Wars immediately criticized the proposal, arguing that it would force retirees to leave the program and try to find cheaper coverage elsewhere.
"Asking someone to voluntarily give up 20 or more years of their youth on the simple promise of a pension and lifelong medical care for themselves and their spouses is a cost this nation and our government should be more than willing to bear," VFW National Commander Richard Eubank said.
"Any changes to how military retirees are treated," he said, "will send an ominous signal to hundreds of thousands of servicemen and women who may be contemplating military careers."
Gates stated at the beginning of the committee's hearing that this would be his "fifth and final" budget testimony, reminding Congress of his planned departure as defense secretary. Mullen is nearing the end of his term as chairman of the Joint Chiefs.
Asked by one member what concerns him the most, Gates said he often sees a disturbing disconnect between the military's mission and its budget battles on Capitol Hill. More often than not, he said, the Pentagon's budget requests are treated "as a math problem."
Mullen said he fears that the time will come when the military's resources will be insufficient to meet the country's national security needs.
"At some point in time, with the force structure we have, we're going to have to start saying there's going to be some stuff we're going to need to stop doing," he warned.
The Joint Chiefs chairman also expressed concerns over space and cyber security. "They're domains without boundaries, without rules," he said.
CNN's Adam Levine and Jennifer Rizzo contributed to this report