January 11, 2013

Pentagon to prepare for drastic fund cuts

The Associated Press

WASHINGTON - The Pentagon will begin taking steps to freeze civilian hiring, delay some contract awards and curtail some maintenance to prepare for drastic budget cuts if Congress can't reach an agreement on a final spending plan, Defense Secretary Leon Panetta said Thursday.

Speaking to reporters, Panetta said that department officials must also develop detailed plans to implement unpaid furloughs for civilian personnel. The furloughs would kick in if the automatic cuts are triggered.

But Panetta said he has asked defense leaders to ensure that any initial moves they make now should be reversible if at all possible, and they must minimize harmful effects on military readiness. "The simple fact is that this fiscal uncertainty has become a serious threat to our national security," Panetta said during a Pentagon press conference. "We really have no choice but to prepare for the worst."

The Pentagon is facing a spending reduction of nearly $500 billion over a decade. An additional $110 billion in automatic spending cuts to military and domestic programs will take effect in early March if no agreement is reached.

At the same time, Panetta and Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, noted that Congress has not passed the 2013 defense department budget proposed by the Pentagon last year, and has instead just approved spending equal to the 2012 fiscal year levels. As a result, Panetta said if Congress fails to pass a new budget or avoid the automatic cuts the Pentagon will have to find an almost immediate $40 billion in savings.

And Dempsey said overall the department would have to absorb as much as $52 billion in cuts to planned spending by the end of the fiscal year on Sept. 30.

 

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