After a decade of war, President Obama today outlined his strategy for a leaner, less-costly military with an increased focus on emerging threats from Asia, saying "we need to be smart, strategic and set priorities" as the Pentagon faces steep budget cuts.

"The tide of war is receding. But the question that this strategy answers is what kind of military will we need after the long wars of the last decade are over. And today, we're moving forward, from a position of strength," Obama said in the first visit by a U.S. president to the Pentagon briefing room.

With U.S. troops out of Iraq and the drawdown underway in Afghanistan, the new strategy includes reductions in military personnel and readies the Pentagon for reduced funding in these tough economic times.

"As we look beyond the wars in Iraq and Afghanistan - and the end of long-term, nation-building with large military footprints - we'll be able to ensure our security with smaller conventional ground forces," the president said.

"So, yes, our military will be leaner, but the world must know the United States is going to maintain our military superiority with Armed Forces that are agile, flexible and ready for the full range of contingencies and threats," he said.

The president made clear that the U.S. will retain its ability to counter terrorism, but will also take increased steps to confront new threats from countries such as China. "We'll be strengthening our presence in the Asia Pacific, and budget reductions will not come at the expense of this critical region," the president said, echoing the message of his trip to the Asia-Pacific this fall.

"We're going to continue investing in our critical partnerships and alliances, including NATO, which has demonstrated time and again - most recently in Libya - that it's a force multiplier. We're going to stay vigilant, especially in the Middle East," he added.

The new strategy is the result of the Defense Strategic Review, which the president ordered last spring. "I called for this comprehensive defense review, to clarify our strategic interests in a fast-changing world, and to guide our defense priorities and spending over the coming decade. Because the size and structure of our military and defense budget have to be driven by a strategy, not the other way around," he said.

While Obama did not offer specifics on the budget cuts, he preemptively defended the strategy against critics. "Some will no doubt say the spending reductions are too big; others will say they're too small. It will be easy to take issue with a particular change. But I would encourage all of us to remember what President Eisenhower once said, that 'each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs.' After a decade of war, and as we rebuild the sources of our strength-at home and abroad-it's time to restore that balance," he said.