Washington (CNN) -- With just weeks before he bids farewell to Washington, Defense Secretary Robert Gates Tuesday fired off a final barrage in the budget battles, saying keeping quiet would be "managerial cowardice."
He called for maximum flexibility for future American forces, pointing out in a speech to the American Enterprise Institute -- a think tank whose experts often strongly oppose any defense cuts -- that the U.S. has consistently failed to predict what is just over the horizon.
"Our record of predicting where we will use military force since Vietnam is perfect -- we have never once gotten it right," Gates said, answering questions after his speech. "There isn't a single instance: Grenada, Panama, the first Gulf War, the Balkans, Haiti, you can just keep going through the list, where we knew and planned for such a conflict six months in advance."
Gates pointed to the Mideast radical group Hezbollah, armed with more missiles and rockets than most states, possibly armed with chemical or biological warheads. Hezbollah cruise missiles could threaten U.S. ships with anti-ship missiles with a range of 65 miles.
"We need to have in mind the greatest possible flexibility and versatility for the broadest range of conflict," Gates said.
And as many Americans look forward to the withdrawal of U.S. military personnel from Iraq by the end of the year, Gates set out another possible timetable.
"The Iraqi military would say they need continued assistance in terms of logistics, intelligence. They have no capacity to defend their own airspace, so there are some areas where we could continue to assist them, and I think at relatively small cost to ourselves, especially given the investment that has already been made," Gates said.
It could benefit both the Iraqi and the U.S. to have American forces stay on, he said.
"As is often the case in Iraq, it will take some time for the political leaders to figure out a way to move forward on this," Gates said. "... I hope they figure out a way to ask and I think that the United States would be willing to say yes when that time comes."
He rejected what he called a salami-slicing approach of across-the-board cuts, warning that that had caused a hollowing out of the U.S. military in the 1970s and 1990s.
"That is why I launched a comprehensive review last week to ensure that future spending decisions are focused on priorities, strategy and risks and are not simply a math and accounting exercise," Gates said.
And he suggested that one result of cuts may be the U.S. accepting a smaller American military.
"The overarching goal will be to preserve a U.S. military capable of meeting crucial national security priorities even if fiscal pressure requires reductions in that force's size," Gates said. "I've said repeatedly that I'd rather have a smaller, but superbly capable military than a larger, hollow, less capable one."
"However we need to be honest ... that a smaller military, no matter how superb, will be able to go fewer places and be able to do fewer things."
Gates bluntly said that a surge in defense spending since 9/11 on modernization -- some $700 billion over 10 years -- "has resulted in relatively modest gains in actual military capability."
However, cuts and their impact need to be confronted, he said.
"People need to make conscious choices about what the implications are for the security of the country as well as for the variety of military operations we have around the world if lower-priority missions are scaled back or eliminated," Gates said.
Tuesday's appearance at AEI could be the last time Gates spells out his budget priorities to a Washington audience, what Gates himself called his "last major policy speech in Washington, D.C."
And he was careful to paint in broad strokes, which aides said was a effort not to pin down his successor, CIA Director Leon Panetta, tapped by President Barack Obama to be the next secretary of defense.
"This process is beginning under Secretary Gates. It is one he has devised," Pentagon spokesman Geoff Morrell said before the speech. "But ultimately it is going to be seen through to fruition by his successor and I don't think he wants to constrain his successor in any way in terms of how to get at these savings."
Gates is set to retire at the end of June.
Gates, however, did list priorities: How both to build the force, with the addition of key weapons, as well as to achieve the $400 billion of cuts over the coming 12 years.
Looking to the future, Gates said critical must-build capabilities include a new Air Force tanker, plus the next-generation strike fighter -- the F-35, more ships and a replacement of ballistic missile submarines, calling for 12 of them at $5 billion each.
And Gates was sharply critical of how the Pentagon evaluates itself, calling efforts to find potential cuts "akin to an Easter egg hunt."
"My staff and I learned it was nearly impossible to get accurate information and answers to questions such as 'how much money did you spend' and 'how many people do you have.' "
Gates tried to find new efficiencies last spring. "This efficiencies project also showed that the current apparatus for managing people and money across the DoD enterprise is woefully inadequate," he said.