Two parallel 2020 defense budgets are being prepared inside the Pentagon, Deputy Defense Secretary Patrick M. Shanahan said Oct. 26.

One is the previously set $733 billion national defense plan for the fiscal year that begins Oct. 1, 2019. The second is a smaller, $700 billion budget being drafted to comply with guidance from President Donald Trump for all federal agencies to hold down costs.

Speaking at a Military Reporters & Editors Conference in Arlington, Va., Shanahan said the services are working now on their proposals. The Defense Department expects to have the parallel budgets completed by about Dec. 1, he said.

While not providing details, Shanahan said the services have many fixed costs that cannot easily be reduced and that DoD had no plans to stop or reverse scheduled increases in personnel. That means the most likely difference between the $733 billion and $700 billion options would be the pace of delivery of new weapons and technology, he said, which will be a question “of doing or deferring” programs.

“It comes down to a judgment call of how fast do you modernize,” he said. “We are building two budgets concurrently. It will give the secretary a clear understanding of what the tradeoffs are,” he said, referring to Defense Secretary Jim Mattis.