Panetta warns against sweeping defense budget cuts

WASHINGTON Wed Aug 3, 2011 6:24pm EDT

U.S. Army soldiers from 2nd Platoon, Charlie Battery, 3rd Regiment, 321st field artillery, 82nd Airborne Division reload a M777 howitzer at Forward Operating Base Bostick in Kunar province, Afghanistan, July 13, 2011. REUTERS/Baz Ratner

U.S. Army soldiers from 2nd Platoon, Charlie Battery, 3rd Regiment, 321st field artillery, 82nd Airborne Division reload a M777 howitzer at Forward Operating Base Bostick in Kunar province, Afghanistan, July 13, 2011.

Credit: Reuters/Baz Ratner

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WASHINGTON (Reuters) - Defense Secretary Leon Panetta warned on Wednesday that any across-the-board cuts to defense spending as part of the next stage of deficit reduction efforts could do "real damage" to national security.

Such sweeping cuts would require furloughing thousands of Defense Department personnel, disrupt arms programs and probably slice $50 billion to $60 billion, roughly 10 percent, from the Pentagon's budget per year, a senior official told reporters.

This would be on top of about $350 billion in security spending savings in the first phase of a deficit-cutting package signed into law on Tuesday by President Barack Obama in a deal to lift country's $14.3 trillion debt ceiling.

The hard-fought legislative deal calls for the $350 billion in savings over the coming decade against a Congressional Budget Office "baseline" projection, most of it likely to be borne by the Defense Department as part of at least $2.1 trillion in budget savings overall.

Panetta said a potential second round of cuts in security spending estimated at about $600 billion from fiscal 2012 to 2021 would be "completely unacceptable."

"If that happens, it could trigger a round of dangerous across-the-board defense cuts that would do real damage to our security, our troops and their families, and our ability to protect the nation," he said in a message to Defense Department personnel.

This was unacceptable "because we live in a world where terrorist networks threaten us daily, rogue nations seek to develop dangerous weapons, and rising powers watch to see if America will lose its edge," Panetta said.

"The United States must be able to protect our core national security interests with an adaptable force capable and ready to meet these threats and deter adversaries that would put those interests at risk," he said.

Panetta vowed to work with congressional leaders "to make the common-sense cuts needed to avoid this sequester mechanism."

ADDITIONAL SAVINGS

The senior official who briefed reporters at the Pentagon said the Defense Department was not yet doing any formal planning for across-the-board cuts that would follow any failure by a special, 12-member joint Senate-House of Representatives committee to find at least $1.2 trillion in additional savings. The panel is supposed to do so by November 23.

Instead, the department is hoping that the committee will focus on entitlements and taxes to achieve the required deficit reduction, not take them out of the Pentagon, the official said on condition that he not be named.

The department has begun a strategic review of U.S. military missions and capabilities to guide its belt-tightening efforts. The review's findings are to be unveiled in February at the same time as Obama submits his fiscal 2013 budget request, the official said. He acknowledged that it would have to be reworked if across-the-board Pentagon budget cuts had been triggered by then.

Panetta said the potential deep cut in defense spending was not meant as policy, but "designed to be unpalatable to spur responsible, balanced deficit reduction and avoid misguided cuts to our security."

Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said he expected much of the budget cut to fall on weapons systems that the Pentagon is developing or planning to buy.

"We've got to take care of our people. We've got to fund the fights that we're in," he said. "I think a significant part of the stuff that we buy ... that slows down or gets eliminated. Poor performing programs, I think, will be killed," he told reporters in Baghdad on Tuesday,

Private budget analysts have called for trimming or canceling some of the military's big-ticket weapons programs. Eliminating the Navy and Marine Corps variants of Lockheed Martin's F-35 Joint Strike Fighter and delaying the Air Force's new Boeing aerial refueling tanker could save $19 billion through 2015, analysts at the Center for American Progress said.

Limiting the Navy's shipbuilding program to a Virginia-class submarine, a destroyer and two Littoral Combat Ships per year could save $20 billion through 2012, a group called the Sustainable Defense Task Force said.

(Additional reporting by Phil Stewart in Baghdad; editing by Warren Strobel and Christopher Wilson)

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