The Pentagon has begun an intensive planning effort to gird for potential across-the-board budget cuts scheduled for March and also will take near-term steps, including delaying contract awards, to lessen the blow of the $500 billion in reductions.
Defense Secretary Leon Panetta told reporters yesterday that while he is holding out hope Congress will stop those decade-long “sequestration” cuts from starting in March, the Pentagon “simply cannot sit back now and not prepare for the worst.”
The Pentagon will “begin to take steps in the coming weeks that would reduce the potential damage that we would face should Congress fail to act to prevent the cuts,” he said at a Pentagon press conference.
Panetta said the Pentagon is facing a “perfect storm of budget uncertainty” that threatens to “hollow out the defense force of this nation.” While President Barack Obama and Congress agreed last week to prevent the first two months of the $500 billion defense sequestration cuts–pushing their start until March–the Pentagon still is facing an estimated $45 billion reduction from March until the end of fiscal year 2013 on Sept. 30.
Panetta lamented that those sequestration cuts are poised to start just as a bare-bones continuing resolution funding the government is set to expire on March 27. He fears lawmakers will simply continue that resolution for the rest of FY ‘13 without passing an actual defense appropriations bill. In addition, Congress and the White House must decide soon whether to raise the nation’s debt ceiling.
“All told, this uncertainty, if left unresolved by the Congress, will seriously harm our military readiness,” Panetta said, citing potential cuts to operations and maintenance accounts.
He warned not fixing those fiscal quandaries would result in “disruptions to almost every weapons modernization and research program,” along with furloughs of Pentagon civilian workers, cancellation of ship maintenance, and reductions in ship and pilot training as well as flying hours.
Therefore, he said he directed the military services and their components to “to immediately begin implementing prudent measures that will help mitigate our budget risk,” through steps that are “reversible to the extent feasible” and won’t harm readiness.
Those steps include “delaying certain contract awards,” freezing civilian hiring, and curtailing facility maintenance and non-mission-critical activities, he said.
The components also are developing “more-detailed plans for how they would implement sequestration if it’s required, because there will be so little time to respond in the current fiscal year,” Panetta said.
This “intensive planning effort,” he said, is “strictly precautionary.” But he said he has an obligation to warn Congress about post-sequestration actions such as civilian furloughs.
He said this new planning effort is intended “to ensure that our military is prepared to accomplish its core mission, including the ability to successfully deter aggression.” Still, he maintained “no amount of planning” could offset the harm sequestration would reap on the military.
The FY ’13 sequestration cuts, if they start in March, would slice roughly 9 percent off of all Pentagon accounts, except for military personnel funding, which has been exempted.
Panetta said yesterday that if Congress simply extends the continuing resolution for FY ’13 without passing a defense appropriations bill, the Pentagon’s overall operating accounts would drop 5 percent below what its proposed in it FY ’13 budget request, taking roughly $11 billion out of operations and maintenance funding. If the sequestration cuts go through in FY ’13, another 9 percent, or nearly $18 billion, in such operations monies would be trimmed. Also, he said, to protect funds for the war in Afghanistan, the Pentagon would cut another 5 percent–or $11 billion–in readiness money in the active-duty base budget.
Some analysts are skeptical that Congress will agree on a plan to stop the sequestration cuts from starting in March, considering the ongoing battle over reducing the deficit and pending fight over raising the nation’s debt ceiling.
“We’ve been hoping for a long time for sort of a grand bargain,” Joel Friedman, the vice president for federal fiscal policy at the nonpartisan Center on Budget and Policy Priorities, said yesterday. “(But) we’re doing it by fits and starts. I’m not confident that on March 1 that we’ll have this all wrapped up.”
Friedman, speaking at an event on the fiscal cliff at the Center for National Policy think tank in Washington, pointed to Republican resistance to allowing new government revenues as an obstacle to lawmakers striking a grand bargain that achieves major deficit reduction and does away with the sequestration cuts.
Those cuts, which initially totaled $1.2 trillion to defense and non-defense spending over a decade, were triggered by the failure of a special congressional super committee to craft a deficit-reduction package back in 2011. The White House and many in Congress oppose sequestration.
Still, Todd Harrison, the senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments, said Wednesday he is “not confident” Republicans and Democrats in Congress will address the debt ceiling as well as sequestration.
“I’m optimistic that they’ll be able to increase the debt ceiling and avoid the worst consequences of government default,” he told reporters in his think tank’s Washington office. “I’m not confident, though, that they’ll be able to reach an additional deficit-reduction agreement to alter sequestration. I think that both parties in the negotiations may end up looking at sequestration and saying, ‘You know what, this is bad, this is not what we want, but it’s probably better than any other deal that we can negotiate with the other side.’”
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