January 15th, 2013
05:56 PM ET

Budget cuts could pull carrier from Persian Gulf

By Barbara Starr

While there have been months of dire predictions from the Pentagon about spending cuts, one of the most visible for the military could resonate across the Middle East at a time when uncertainty continues to grip the region.

The U.S. Navy may face the prospect of not being able to routinely keep two aircraft carriers in the Persian Gulf region, which has been a longtime requirement for any ability to launch military campaigns in that part of the world.

The United States would have to scale back to one carrier in the region if Congress can't avoid deep automatic spending cuts, including some $500 billion directed at the Pentagon over 10 years, a U.S. military official directly familiar with the Navy's latest preliminary budget analysis tells CNN.

The Navy has kept an on-and-off presence with two carriers in the Gulf region during the Iraq and Afghanistan wars.

Panetta orders defense cuts before Congress does
January 10th, 2013
06:14 PM ET

Panetta orders defense cuts before Congress does

By CNN Staff

U.S. Defense Secretary Leon Panetta has ordered the military to begin implementing cost-cutting measures aimed at mitigating the risk of significant budget cuts should Congress fail to reach a deal in coming months to avert or soften them.

"We have no idea what the hell is going to happen," Panetta said Thursday.

He has asked services to begin "prudent" measures, including curtailing maintenance for non-critical activities and delaying hiring.

The measures must be "reversible" and minimize harmful impacts on military readiness, Panetta told reporters at the Pentagon.

Military departments have also been told to report on how they would implement deep automatic spending cuts, called sequester, and enforce unpaid leave for civilian employees should the reductions occur.

Panetta and Joint Chiefs Chairman Gen. Martin Dempsey have warned Congress that uncertainty over the absence of a long-term spending agreement, debt-ceiling concerns and the lack of a full congressional budget process is extremely harmful.

Filed under: Budget • Defense Spending • Military • Panetta • Secretary of Defense • Sequestration
Tax deal delays Pentagon notification of possible furloughs
January 2nd, 2013
12:31 PM ET

Tax deal delays Pentagon notification of possible furloughs

By Chris Lawrence

The Pentagon has delayed plans to notify up to 800,000 civilian workers about possible furloughs now that any big spending cuts under the fiscal cliff have been averted.

The tax deal negotiated by the Senate and the White House and approved by Congress on Tuesday would defer substantial cuts in domestic spending, or sequester, for two months.

The Pentagon faced up to $500 billion in spending reductions under congressional plans for the automatic spending cuts.

In a prepared statement, Defense Secretary Leon Panetta said the deal buys time for lawmakers to come up with a deficit reduction plan that prevents devastating and arbitrary cuts. "Had Congress not acted, the Department of Defense - along with other federal agencies –would have been forced to begin taking dramatic steps that would have severely impacted our civilian personnel and disrupted our mission," Panetta said Wednesday.

While they caught a break this time, defense officials say compressing the timetable could present another challenge if those cuts eventually become law.

Pentagon told to start planning for fiscal cliff cuts
December 5th, 2012
03:38 PM ET

Pentagon told to start planning for fiscal cliff cuts

By Mike Mount

The White House has ordered the military to start planning for the possibility of cutting $500 billion from its budget over the next 10 years as part of the fiscal cliff, Pentagon officials said on Wednesday.

Agency spokesman George Little told reporters that the Office of Management and Budget (OMB) instructed the Defense Department to start internal planning for possible spending reductions on top of other cuts already in the pipeline.

The military had been ordered for months not to get ready for the automatic budget cuts - also known as sequestration - related to the fiscal cliff that would hit January 2.

"Naturally, we hope very much that sequestration will be avoided and that we don't enter that phase in early January 2013. We don't want to go off the fiscal cliff, but in consultation with OMB, we think that it is prudent at this stage to begin at least some limited internal planning," Little said.

The fiscal cliff is a combination of tax increases and spending cuts that are due to take effect if the White House and Congress cannot agree on a framework for tackling deficit-reduction by year's end.

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Filed under: Budget • Defense Spending • Military • Sequestration
Defense companies see cuts coming even with a budget deal
December 3rd, 2012
06:28 PM ET

Defense companies see cuts coming even with a budget deal

By Jennifer Rizzo

Defense company executives conceded on Monday that their industry would likely see billions more in cuts even if Congress reaches a deal to avoid the fiscal cliff.

"We need to stop believing or pretending that there is a scenario out there that offers no defense cuts," said David Langstaff, president and chief executive of TASC, Inc. "The question is whether we make them responsibly or irresponsibly."

The automatic cuts, referred to as sequestration, are set to go into effect on January 2 if the White House and Congress cannot agree on where $1 trillion in federal savings over the next decade should come from.

The Pentagon's budget would be axed by $500 billion over that time. That would be on top of a similar cut the Pentagon is already committed to achieving.

Langstaff discussed the threat of the looming budget cuts at the National Press Club along with three other defense industry executives: Wes Bush, CEO of Northrop Grumman; David Hess, president of Pratt & Whitney; and Dawne Hickton, CEO of RTI Metals.

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Filed under: Budget • Congress • Defense Spending • Pentagon • White House
Can the military save America's ranchers?
August 15th, 2012
01:39 PM ET

Can the military save America's ranchers?

By Jennifer Rizzo

As the nation's ranches and farms endure one of the most severe droughts in decades, the Obama administration has ordered the Pentagon to look into purchasing a "second helping" of all things meat.

Economists and political analysts who spoke to CNN's Security Clearance, however, aren't optimistic that the administration's plan will bring much relief to the livestock industry, though it may help Obama politically.

The Defense Department is reviewing its purchases of beef, pork and lamb to see if room can be made to buy more now and freeze them for later.

The military already buys approximately 94 million pounds of beef, 64 million pounds of pork, and 500,000 pounds of lamb each year. That food gets eaten by troops around the world, even in combat zones like Afghanistan.

As part of the same directive, the Department of Agriculture will be buying up to $170 million worth of meat and poultry.

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Filed under: Budget • Military
August 13th, 2012
02:08 PM ET

Ryan's foreign policy views shaped by his budget battles

By Jamie Crawford

As the chief architect of the Republican budget plan, presidential nominee Mitt Romney's choice for vice president, Paul Ryan, is well-known in budget policy circles around Washington, but his 14 years on Capitol Hill have left a much smaller paper trail when it comes to foreign policy statements and achievements.

That said, Ryan's focus during his seven terms in Congress on balancing the federal budget and extolling the virtues of fiscal restraint seems to have also formed the center of his thinking on foreign policy issues, which seems to hue to the classic Republican view of the world.

"If there's one thing I could say with complete confidence about American foreign policy, it is this: Our fiscal policy and our foreign policy are on a collision course; and if we fail to put our budget on a sustainable path, then we are choosing decline as a world power," he said last year when he gave a speech on American foreign policy at the Alexander Hamilton Society in Washington.

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Filed under: 2012 Election • Budget • Foreign Policy • Pentagon • Romney • Ryan
White House to Congress: Do your job
August 1st, 2012
05:48 PM ET

White House to Congress: Do your job

By Jennifer Rizzo

Republican members of Congress went head to head with the White House Wednesday, pressing the administration on how across-the-board budget cuts set to take effect next year would be implemented.

An administration official in turn pressed back, telling Congress to do its job and pass balanced budget legislation to avoid the indiscriminate cuts.

"To make this vivid, the right course is not to spend time moving around rocks at the bottom of the cliff to make for a less painful landing," said Jeffrey Zients, the acting director of The Office of Management and Budget, the entity which would provide guidance on implementation. "The right course is to avoid driving off the cliff altogether."

Defense execs warn of looming job loss because of defense cuts
July 18th, 2012
06:34 PM ET

Defense execs warn of looming job loss because of defense cuts

By Mike Mount, CNN Senior National Security Producer

Chief executives of leading defense companies told a House panel Wednesday they would have to start informing employees just before the 2012 election that their jobs would terminated in January if Congress fails to make a budget deal, triggering hundreds of billions of dollars in defense cuts that would ripple through the defense industry sector.

The four CEOs testified before the House Armed Services Committee and echoed what many defense industry officials have been sounding the alarm about for months: The automatic cuts, known as sequestration, would be devastating to the defense sector and the economy.


July 10th, 2012
01:09 PM ET

Threat of defense cuts a fear factor on campaign trail

By Jennifer Rizzo and Chris Lawrence

As John Polacek walks through his western Pennsylvania factory, he waves to the people that work for him. But don't call them employees.

"We don't hire an employee. We hire a family, and that's the way we like to treat them," Polacek said. "They want jobs for life here. They're not going to move on until the next guy gives him a pay raise. They're here because they like working here. They like the fact that they are saving American lives doing the defense work that they are doing here."

JWF Industries is a military subcontractor. It makes parts for vehicles like Humvees and Strykers that get manufactured by larger companies like Lockheed Martin or BAE. Polacek employs 450 people, but he's worried some will be out of a job beginning next year if the Defense Department has to cut more from its budget.

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