The U.S. military will be reduced by 40,000 troops over the next two years, a senior defense official confirmed on Tuesday

The number of U.S. active troops will be reduced from 490,000 to 450,000 due to dwindling resources and budget cuts. 

Last year, then-Defense Secretary Chuck Hagel outlined a plan to shrink the Army to pre-WWII levels in favor of smaller, modernized forces. 

Fox News strategic analyst Lt. Col. Ralph Peters reacted to the new planned cuts this morning, telling Martha MacCallum that the military is opting to toss out experienced combat veterans in favor of weapons systems "that don't work." 

"The best of the best. We're going to put them out in the street so we can preserve systems such as the F-35, [which is] wildly troubled, [and] going to cost over a trillion dollars," he said.

He argued that ISIS isn't winning in Iraq and Syria using sophisticated technology, airstrikes or drones.

"They have tough troops willing to fight on the ground. We're relying overly on technology. ... Look at what our air power has not achieved in the Middle East. Islamic State, for all the technology we have thrown at it, they are still on the march. At the end of the day, it is the soldier and Marine that makes the decisive difference," said Peters.

Peters said lawmakers love to "pose for pictures" with soldiers and praise the troops in public, but it's the big defense contractors that are wielding the real influence on Capitol Hill. 

Peters said a revamped Air Force is important, but singled out the F-35 fighter jet as being "worthless" and "ridiculously overhyped." He argued that the military is not buying the weapons it needs, but rather the "weapons the defense industry wants to sell us." 

"There's not an unlimited amount of money. Yes, people are expensive, but these combat veterans are worth far more than outrageous pieces of junk that don't work and that rip off the taxpayer," said Peters.

Watch his full analysis above.