BBC Radio 4's Analysis: Obama's Pentagon is broadcast on Thursday 26th March at 20.30 GMT and repeated on Sunday 29th March at 21.30 BST.
During his campaign to become commander in chief, Senator Obama pledged to adapt United States "military capabilities for current, not Cold War needs".
Newsnight's Diplomatic and Defence Editor Mark Urban investigates how as president, he has to confront the harsh realities of reforming the Pentagon.
"Everyone's got an agenda", says Admiral William Fallon, former head of Central Command in the Middle East, "lots of competing demands or desires
for resources and he's going to have to decide what his priorities are".
Under President George W. Bush defence spending soared after 9/11, consuming around six percent of the economy.
The new president's ambitious domestic agenda - which includes major education and healthcare reform - means that he must shrink that figure in his forthcoming spring budget.
But the recession and accompanying job losses are creating anxiety on Capitol Hill.
The president will need the support of congressmen and women to push his agenda for change forward. Many have military bases and defence manufacturers in their districts.
And defence contractors form a powerful lobby in Washington.
Mackenzie Eaglen of the Heritage Foundation says "the pressure is overwhelming right now to get any information to get in front of the arguments that the secretary [of defence] will make".
There are already signs though that the industry is beginning to predict the areas into which the defence dollars may move.
During the United States' involvement in Iraq and Afghanistan there has been little use for the "big ticket" defence items like ships, submarines and planes.
What have been needed are the weapons for fighting insurgencies: pilotless planes and mine-protected vehicles, not to mention tools like better intelligence gathering and sharing.
There are also signs that the president intends to make greater use of diplomacy as a foreign policy tool outside conflict zones too: his recent personal video message to the Iranian people, Secretary of State Hillary Clinton's meeting with her Soviet counterpart and the appointment of George Mitchell and Richard Holbrooke as special envoys to the Middle East and Afghanistan/Pakistan respectively.
But there will be many, including top military commanders, who will advise the new president to proceed with caution as he charts a new course for U.S. defence spending.
Events could always intervene: be it a confrontation with a major state or a second 9/11.
Admiral William Fallon former head US Central Command
General Jack Keane former Vice Chief of Staff US Army
Michael Vickers Assistant Secretary of Defence
Thomas Barnett author and strategist
Brigadier Ed Butler former Chief of Joint Force Operations
Lawrence Korb Senior Fellow, American Progress
Winslow Wheeler, Straus Military Reform project
Mackenzie Eaglen Heritage Foundation
Michael Lind New America Foundation
John McLaughlin former deputy director CIA
This is the last programme in the current series. We will be back on air on Monday 25th May 2009.