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Panetta: Pentagon layoffs this fall if Congress fails on budget deal

June 13, 2012|By Lisa Mascaro
  • Defense Secretary Leon Panetta testifies before the Senate Appropriations Committee.
Defense Secretary Leon Panetta testifies before the Senate Appropriations… (Alex Wong / Getty Images )

WASHINGTON -- Defense Secretary Leon Panetta said layoff notices for military and civilian employees would go out this fall – just before the November election – if Congress fails to stop mandatory budget cuts to the Pentagon set to take effect in the beginning of 2013.

The defense chief has not spared colorful language in criticizing the $500 billion in cuts over the next decade required by Congress to reduce the nation’s debt load, and in testimony before the Senate Appropriations on Tuesday he called such “meat ax” reductions a “disaster.”  

“Obviously this is a great concern,” said Panetta, who said the cuts guarantee the Pentagon would “hollow out” the nation’s military force. “I would urge both sides to work together to try and find a comprehensive solution.”

Congress is becoming increasingly engaged in the coming “fiscal cliff” – the combination of mandatory spending reductions and expiring tax breaks coming at the end of the year. Economists have said if lawmakers fail to act, the combination of higher taxes and reduced federal spending could prove a drag on the economy that leads to another recession.

The Pentagon cuts are coming Jan. 2 as part of a budget reduction agreement reached last summer between Congress and the White House after Republicans refused to raise the nation’s debt limit without deficit reduction.

Now the prospect of $1 trillion in deep cuts across the nation’s defense and non-defense accounts are causing some lawmakers to have second thoughts.

Republicans in the House already have approved a plan to spare the military, and shift the cuts onto other domestic programs – an approach Democrats have refused.

Yet even some Democrats are hesitant to see the military cuts, which would be in addition to nearly $500 billion in reductions over the decade the Pentagon already agreed to in President Obama’s proposed budget as the wars in Iraq and Afghanistan wind down.

Democrats, though, have been unwilling to undo last summer’s budget agreement at a time when Republicans are pushing to extend tax cuts that expire on Dec. 31. Obama and his allies on Capitol Hill argue that taxes for the wealthy should be raised, rather than shifting the burden for deficit reduction on domestic programs.

The chairman of the Senate Appropriations Committee, Sen. Daniel Inouye (D-Hawaii), in opening the hearing, noted the “very challenging moment in history” for the Pentagon brass arrayed before the panel.

Defense hawks, though, seized on the coming layoffs as another reason to preserve the military from deeper reductions at a time when the nation’s unemployment rate remains historically high and jobs are at the forefront of voter concerns heading into the fall election.

Panetta said notices would need to go out between 60 and 90 days before the cuts, under federal regulations, which would mean this fall.

The nation’s $15.4-trillion debt load is approaching unsustainable levels, budget analyses have warned. The level of debt doubled under President George W. Bush, then increased further under Obama as tax revenue dropped during the recession and the administration increased spending in an effort to boost the economy. The budgetary outlook is dim as the nation confronts the rising costs of caring for the elderly as the baby boomers retire.

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