The unresolved debt ceiling debate, the looming sequestration, and the expiration of the current continuing spending resolution may all combine to create “a perfect storm of budget uncertainty,” said Defense Secretary Leon Panetta during a Pentagon briefing last week.
“The fact is, looking at all three of those, we have no idea what the hell’s going to happen,” said Mr. Panetta. “All told this uncertainty, if left unresolved by the Congress, will seriously harm our military readiness.”
Sequestration, which involves over $500 billion in cuts to defense over the next 10 years, is scheduled to begin in March with between $45 billion to $48 billion in across-the-board spending cuts for 2013. The fiscal cliff deal staved off even larger cuts that were slated to go into effect January 2nd. But the extension only lasts two months and was intended to give President Barack Obama and Congress time to iron out differences on debt reduction. Mr. Panetta now says reaching an agreement looks less likely: “My fear in talking to members of Congress is that this issue may now be in a very difficult place, in terms of their willingness to confront what needs to be done to de-trigger sequester."
The Army Times detailed the funding outlook if the current continuing resolution is extended for the rest of the fiscal year:
DoD’s operations and maintenance budget would be cut about $11 billion, Panetta said. Sequestration would have to cut another $18 billion from those accounts. In order to fully fund operations in Afghanistan, DoD would need to take an addition $11 billion out of its domestic operations and maintenance budget.
Deputy Defense Secretary Ashton Carter issued guidance on Jan. 10, telling the Air Force and the Navy to cancel maintenance on its aircraft and ships in the third and fourth quarters to meet those targets.
What’s at stake, says Mr. Panetta, are reductions in training and maintenance that could hurt military readiness.
“It would mean reductions … in ship training, except for our highest priority units, reductions in flying hours, in pilot training, and ships would have to be pulled out of maintenance, and disruptions to almost every weapon modernization and research program,” Panetta said.
As a “strictly precautionary” measure, Mr. Panetta also said the Pentagon will begin planning for possible involuntary furloughs of the Defense Department’s roughly 800,000 civilian workers.
“The burn rate is unsustainable,” said Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey during the Pentagon briefing. “We have to now take measures to prepare ourselves for that eventuality.”