Traverse City Record-Eagle

Business

December 6, 2012

Pentagon begins planning for massive budget cuts

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WASHINGTON (AP) — The Defense Department has begun planning for the roughly $500 billion in personnel and program cuts over a decade that will be needed if Congress and the White House fail to reach a deal that would avoid the double hit of tax hikes and automatic spending reductions dubbed the "fiscal cliff." Department spokesman George Little said the cuts would be "devastating to our national defense." As the White House and members of Congress continue to wrangle over how best to find as much as $1.2 trillion in savings over the next 10 years to avert the fiscal cliff, Little said the Pentagon started more detailed discussions this week on how to slash 9.4 percent of its budget across the board.

He said cuts that deep could force the department to throw out its new military strategy, and cut weapons and technology programs, and it could hamper the department's ability to provide for its troops and their families.

He added that the department also is beginning to figure out how it will prepare and inform about 3 million military, civilian and contract workers about the cuts, if they occur.

For months, Pentagon officials have insisted they were not planning for the massive budget cuts that would automatically kick in after the first of the year if the White House and Congress doesn't strike a deal. But with less than a month to go and no deal in sight, those evaluations have begun in earnest.

According to guidance sent out by the White House Office of Management and Budget, the Pentagon will have to slice nearly 10 percent off more than 80 accounts, including more than $4 billion off Air Force aircraft and maintenance, $2.1 billion off Navy shipbuilding; $6.7 billion off Army operations, $3.2 billion off health programs and $1.3 billion out of the Afghan security forces funding.

About $55 billion of the $500 billion in cuts would come in the first year.

The Pentagon would have some flexibility in deciding how to find the money in each of those broad categories; for instance officials could leave the aircraft carrier fleet intact and take the money out of other types of ships in the pipeline.

If the White House and lawmakers are able to avoid the fiscal cliff, the military still likely will be looking at as much as an additional $10 billion to $15 billion in cuts in projected defense spending each year for the next decade. It's a prospect that Republicans recognize is the new reality, with wars in Iraq and Afghanistan ending and deficits demanding deep cuts.

Already this year, the Pentagon revamped its military strategy as part of last year's deficit-cutting law that ordered an initial $487 billion in spending cuts over the next 10 years.

A proposal that House Speaker John Boehner, R-Ohio, and other Republican leaders sent to the White House this week calls for cuts of $300 billion in discretionary spending to achieve savings of $2.2 trillion over 10 years. The blueprint offered no specifics on the cuts, although the Pentagon and defense-related departments such as Homeland Security and State make up roughly half of the federal government's discretionary spending.

"Not too devastating," said Sen. John McCain of Arizona, the top Republican on the Senate Armed Services Committee.

"My job is to stop sequestration," McCain said, using the budgetary term for the automatic cuts.

Pentagon spending still has its congressional protectors, especially with job-producing weapons, aircraft and ships built in nearly every corner of the country. In the past decade, the base defense budget has nearly doubled, from $297 billion in 2001 to more than $520 billion. The amount does not include the billions spent on the wars in Iraq and Afghanistan.

The cuts Obama and Congress are talking about would be to projected spending that envisioned Pentagon budgets rising to levels of more than $700 billion a year in a decade. Tea partyers and fiscal conservatives recently elected to Congress have shown a willingness to cut defense, traditionally considered almost untouchable.

"We understand that in getting to an agreement that drives down the debt ... that there are going to be cuts," said Rep. Austin Scott, R-Ga., president of the 2010 freshman class in the House. "Making cuts strategically makes sense. Doing it through sequestration does not make sense.

Any deal between Obama and Boehner that avoids the fiscal cliff and reduces the deficit will still face some resistance among rank-and-file lawmakers over defense cuts, especially in the House. The reductions will be particularly hard for GOP lawmakers who were counting on Mitt Romney to win the White House and try to reverse the cuts in defense.

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