Defense Secretary Leon Panetta yesterday welcomed legislation temporarily delaying sequestration, but warned that Congress “cannot continue to just kick the can down the road” and must act to create a balanced spending plan to permanently end the threat of sequestration.
Panetta issued a statement after Congress approved the so-called “fiscal cliff deal” that pushed back sequestration by two months–until early March. The draconian spending measure, previously slated to have taken effect yesterday, would indiscriminately cut defense spending by nearly $500 billion over 10 years.
“Hopefully, this will allow additional time to develop a balanced deficit reduction plan that would permanently prevent these arbitrary cuts,” Panetta said, adding that he came close to having to issue possible furlough notices to 800,000 civilian employees.
“For more than a year, I have made clear that sequestration would have a devastating impact on the department,” he added. “Over the past few weeks, as we were forced to begin preparing to implement this law, my concerns about its damaging effects have only grown.”
Postponing sequestration was part of a larger deal struck among the White House and Democratic and Republican lawmakers in a frenzy of last-minute negotiations also aimed at staving off tax increases on middle-income Americans. The House voted 257 to 167 to approve the legislation late Tuesday, less than 24 hours after the Senate overwhelmingly signed off on the compromise bill forged by Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-Ky.).
The legislation keeps Bush-era tax cuts in place for the middle class while allowing taxes to increase on those earning at least $400,000 a year—a provision the Republicans adamantly opposed. The GOP wanted to keep the Bush tax cuts on the wealthiest earners in place as well.
The bill does little to address long term defense spending reductions, instead paying for the two-month reprieve partly through billions of dollars in other, smaller military cutbacks. Panetta, however, cautioned that sequestration still looms and called on Congress to develop an overall deficit reduction plan. The 113th Congress is to begin today.
“Congress has prevented the worst possible outcome by delaying sequestration for two months. Unfortunately, the cloud of sequestration remains,” he said. “The responsibility now is to eliminate it as a threat by enacting balanced deficit reduction.”
Panetta, along with other top defense officials and military brass, has warned that sequestration would devastate national security. Sequestration was introduced in the Budget Control Act of 2011, which had already slashed $487 billion in Pentagon spending in the decade ahead. Sequestration was seen as a tool to leverage Democrats and Republicans into reaching an agreement on a blueprint to cut federal spending by $1.2 trillion over the next 10 years, but it has yet to yield the desired effect.
The defense industry has warned that sequestration would force companies to lay off thousands of employees, drive small suppliers out of business and further weaken the economy. Marion Blakey, the president of the Aerospace Industries Association, urged the new Congress to act swiftly to put sequestration to an end.
“Delaying implementation of sequestration by two months does not eliminate the uncertainty facing our business leaders and our warfighters,” she said yesterday. “If sequestration is not solved in the next 57 days, it would be an abdication of responsibility by the leaders of this country, one that will only heighten Americans’ cynicism and cement the public image of a gridlocked Washington that simply doesn’t work.”