Pentagon prepares for cuts -- cliff or no cliff

A member of the honor guard stands at attention at the Pentagon in Arlington, Va. Defense contractors are already cutting back as the war in Afghanistan winds down.

Automatic federal spending cuts under sequestration are supposed to include more than $50 billion from defense programs -- half the total. That could include everything from building maintenance on bases, to orders for military vehicles hardened against land mines, to the workforce of civilian pay clerks and other paperwork-pushers at the Pentagon.

Even if spending reductions scheduled to begin after Jan. 1, 2013, are trimmed and/or delayed by days or months, some cuts are likely to pinch at the Pentagon eventually. They won’t affect uniformed military -- so 1.4 million soldiers, sailors, pilots and marines would remain on the payroll. Supplies like fuel, armor, ammunition for troops in theatre would also likely not be cut back.

But if the Pentagon has to cut deeply in 2013, it will likely furlough some of its 800,000 civilian workers. Press Officer Lieutenant Colonel Elizabeth Robbins explains the rules: “Under Title 10, the Department of Defense needs to notify Congress of any potential furloughs, and to give them 45 days to process that.” Congress could rescind or otherwise modify the Pentagon’s spending and staffing plans at that point.

The Pentagon also has to warn employees within 30 days. Robbins says Pentagon officials are currently evaluating whether the notifications can be concurrent, or must be sequential. In either case, neither notification has happened to date, meaning any furloughs would not kick in until at least February 2013.

Defense budget expert Gordon Adams at American University estimates 100,000 civilian government defense workers ultimately might be furloughed -- for several days or weeks through the calendar year. They’d go unpaid, but would retain benefits and seniority. He says full-scale layoffs aren’t likely—the military would lose valuable expertise and experience that would be hard to replace.

Adams, who served in the Clinton Administration as senior budget official for national security at the Office of Management and Budget (1993-1997), says businesses that provide services to the military would likely be cut back in full sequestration or some trimmed-back version thereof: “everything from mowing the lawn at Fort Belvoir, to running the mess hall at Baghram Air Base.”

He says military contractors are already getting used to less defense-related business from the government.

“We are in a drawdown,” says Adams. “Because the wars are ending, attention has shifted to the economy, the debt and the deficit. The Lockheed-Martins and the Northrup-Grummans have already been trimming their sails. They’ve been laying people off, closing production facilities.”

Adams says that even if the Pentagon doesn’t take a full 10 percent spending cut in 2013 through sequestration, the exercise of figuring out how to deal with the impending fiscal cliff has been useful. He calls it the military’s ‘sequestration drill,’ as the current era of record-high defense spending winds down. He says the top military brass are now learning that they can -- and must -- make do with less, without undermining national security.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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