The Pentagon may have to cut as much $500 billion from its budget over the next 10 years as part of the fiscal cliff.
That could be on top of other Defense Department cuts already in the pipeline.
This is an about-face to previous orders.
The military was told for months not to get ready for the automatic budget cuts, also known as sequestration, related to the fiscal cliff that would hit January second.
The fiscal cliff is a combination of tax increases and spending cuts that are due to take effect if the White House and Congress cannot agree on tackling deficit-reduction by year's end.
The Pentagon has said cuts would most likely target research and technology, weapons and civilian defense department jobs.