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.
By Larry Shaughnessy
Defense Secretary Leon Panetta sent a memo this week to all the troops and civilians who work for him to address concerns about the mandatory spending cuts that would occur if the president and lawmakers do not reach a budget agreement by the end of the year.
In it, Panetta wrote that if the procedure, known as sequestration, were to occur, it "would not necessarily require immediate reductions in spending."
He also wrote that "under sequestration, we would still have funds available after Jan. 2, 2013, but our overall funding for the remainder of the year would be reduced."
It's a very different spin on the sequestration from Panetta, who in the past said it would be a "disaster." If this "meat ax" approach to budget cutting were used, he said, it would "hollow out the force."
The cuts are slated to be across the board, totaling roughly $500 billion over 10 years.
Panetta tried to reassure the troops that "the president indicated his intent to exercise his legal authority to exempt military personnel" from the mandatory cuts.
But he couldn't make the same promise to the Defense Department's million or so civilian employees.
Instead he said, "Should we have to operate under reduced funding levels for an extended period of time, we may have to consider furloughs or other actions in the future."
Asked about the change of tone, a senior defense official said, "The secretary continues to believe that sequestration would be devastating and is puzzled that Congress can't reach a deal."
The same official said the memo reflects the Office of Management and Budget's view of the issue, especially with respect to furloughs.
Panetta wrapped up the memo by writing, "I want to assure you that we will do our very best to provide clear information about the status of events as they unfold."
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.
By Pam Benson
Spending by the intelligence community dropped for the second year in a row following the dramatic increases in the years after the 2001 terrorist attacks and it's a trend that will continue.
Director of National Intelligence James Clapper released a statement on Tuesday revealing the budget for national intelligence programs in fiscal year 2012 was $53.9 billion, a 1 percent decrease from the previous year.
And according to the Defense Department, the amount spent for military intelligence dropped by 10 percent to $21.5 billion.
The overall spending of $75.4 billion in 2012 represents a 4% cut in intelligence spending.
The fiscal year ended on September 30.
Overall intelligence spending peaked in fiscal year 2010 when the United States spent a total of $80.1 billion.
By Pam Benson
Looming across-the-board cuts to the intelligence community budget will be devastating if Congress fails to act according to the nation's top intelligence officer.
"If sequestration is allowed to happen, it will be disastrous for intelligence," Director of National Intelligence James Clapper told a group of intelligence officers and contractors gathered at a conference in Orland on Tuesday.
Clapper said every major intelligence program is "in jeopardy of being wounded" because the budget deal Congress passed last year does not allow the intelligence community any flexibility to prioritize needs.
"The current arrangement pre supposes that everything we do in intelligence is of equal import and we all know that's not the case,' Clapper said.
The cuts would be approximately 10% and would impact programs as well as personnel.
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.
From Mike Mount
CNN Senior National Security Producer
Congress is asking top U.S. defense contractors to disclose their corporate plans if the military is forced to cut $500 billion from its budget early next year, putting the companies in the middle of a political fight between Republicans and the White House.
In a letter sent Thursday to 15 major defense contractors by U.S. Sen. John McCain, R-Arizona, the ranking member of the Senate Armed Services Committee, and six other GOP senators as well as independent Sen. Joseph Lieberman, Connecticut, the companies were asked to answer five questions about the effect the potential massive cuts, known as sequestration, would have on their bottom line, employees and suppliers.
By Larry Shaughnessy
Sequestration is like the weather in Washington - everybody talks about it, no one likes it, and no one knows what to do about it.
But the Senate has agreed to find out exactly how bad it - sequestration, that is - will be.
Sequestration is the name given the automatic across-the-board spending cuts mandated by Congress if planned budget cuts could not be agreed to.
Sen. John McCain, R-Arizona, a vocal critic of sequestration, teamed with Sen. Patty Murray, D-Washington, to offer an amendment passed by the Senate Thursday examining what sequestration would really mean. FULL POST
By Mike Mount
Afghanistan war funding could be in jeopardy if proposed severe budget cuts hit the military in the beginning of 2013, according to senior Pentagon officials.
Senior leaders at the Pentagon are becoming increasingly concerned as it becomes clear that the $500 million in additional budget cuts possibly hitting the Pentagon in January, known as sequestration, also includes the Overseas Contingency Operations (OCO) which is the Pentagon's war budget.
The potential cuts are the result of a congressional deal struck last fall while negotiating over the current budget deal. Those negotiations resulted in the inability of Congress and the president to agree on a deficit-reduction plan. If there is no agreement, come the beginning of January 2013, the Pentagon will be forced to cut an additional $500 billion from its accounts over the next 10 years.
The top U.S. military official voiced more concerns about the uncertainty over the Pentagon’s budget with the looming threat of an additional half trillion dollar cut, should Congress be unable to reach an agreement about debt reduction by the end of the year.
“I know what the budget did to us with the reduction of $487 billion as a result of the Budget Control Act, but I don’t know what it would do to us with another $500 billion,” Joint Chiefs Chairman, Gen. Martin Dempsey told CNN’s Barbara Starr in an interview during the Army 23th birthday celebration. “I know how hard it was to get $487 (billion).”
If another $500 billion was cut from the budget, in a trigger mechanism known as sequestration, Gen. Dempsey said there would be a risk.
“We would certainly be less visible and active globally because we’d have a much smaller force. And nature abhors a vacuum,” he said. “And if we’re not there others will be and that doesn’t mean we have to be the world’s policeman and all the rhetoric but it does mean we have to engage and build partnerships. We have to live up to our treaty obligations and so forth.”