The cost of military operations in Iraq and Afghanistan are forcing the US to cut back operations at its Pacific missile testing range in the Marshall Islands.
Reagan Test Site commander, Colonel Stevenson Reed, says the global war on terror in Iraq and Afghanistan costs money and it has to come from somewhere.
Colonel Reed met for a briefing with the Marshall Islands President Litokwa Tomeing in the Marshall Islands capital Majuro.
About $US6 million will be cut from the $US250 million annual budget this year, leading to lay-offs for more than seven per cent of its American and Marshall Islands workforce.
The missile range at Kwajalein atoll has been the testing ground for every US missile and anti-missile defence system since it was first established in the mid-1960s.
The US pays Kwajalein landowners more than $US15 million annually to rent low-lying coral islands that are dotted with radar, high speed infrared cameras and missile launch pads.
The foreign minister of the Marshall Islands, Tony deBrum, expressed dismay at the sudden announcement of the cutbacks.
About 12,000 islanders who live crowded on the tiny island of Ebeye depend heavily on the salaries of the 1,125 Marshall Islanders who work at the nearby missile base.