The Defense Department is prepared to present Congress with a detailed outline of how it will cut billions from its budget if sequestration continues into next year.

By July 1, the Pentagon will provide the Senate Armed Services Committee its plan for managing reduced fiscal 2014 budget levels, Deputy Defense Secretary Ashton Carter said in speech Wednesday at a special-operations conference. The committee had asked DoD to provide a list of spending reductions after the White House submitted a budget proposal for next fiscal year that simply ignored sequestration, ostensibly in the hope that the automatic budget cuts would be canceled or otherwise avoided by next fiscal year.

(Watch video of Carter’s remarks at the conference below)

For the last several weeks, DoD has been conducting a “strategic choices” review, Carter said.

“We scrutinized 38 categories of department spending — every nickel in the whole damn place — ranging from bombers to cyber, from pay and health care to the Office of the Secretary of Defense and other headquarters. Every dollar,” he said. “We looked at every aspect of the establishment: roles and missions among the services, business and acquisition practices, contingency planning, force structure, compensation, modernization — the whole deal.”

DoD will use the findings of that review to plan for a range of budget contingencies, Carter said.

On one end of the spectrum is the president’s proposed 2014 budget, which omits sequestration but calls for 10-year budget savings of $150 billion. And at the other end is the possibility of “full sequestration,” Carter said, resulting in $500 billion in cuts over the next 10 years.

“We’re ready for whatever happens to our budget,” he said. “But the choices are unprecedented and will require congressional support to get them right. Therefore we’re going to be asking Congress for leeway to make these adjustments and to give us the time, stability and flexibility needed to make responsible and balanced spending adjustments.”

The Pentagon’s retooled budget outline will provide the first glimpse into how Defense leaders are planning for sequestration beyond the current fiscal year.

But there’s still a lot of uncertainty, Carter said.

“No one knows what comes next here in Washington,” he said. “A few months ago, few believed that sequestration would go into effect in the first place. So, who’s going to be the first to predict what comes next? ”

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