Pentagon sees $20 billion hit in 2014 if budget cuts hold

WASHINGTON Wed Sep 4, 2013 6:55pm EDT

Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall speaks at the Reuters Aerospace and Defense Summit in Washington, September 4, 2013. REUTERS/Larry Downing

Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall speaks at the Reuters Aerospace and Defense Summit in Washington, September 4, 2013.

Credit: Reuters/Larry Downing

WASHINGTON (Reuters) - The Pentagon would have to slash its budget by about $20 billion in fiscal 2014 from a year earlier if mandatory budget cuts remain in effect, the chief arms buyer for the U.S. military said on Wednesday, calling that an increasingly likely scenario.

Frank Kendall, U.S. undersecretary of defense for acquisition, technology and logistics, said the cuts would fall disproportionately on the procurement of goods and services, as well as research and development, since it was difficult to harvest savings from personnel accounts on short order.

He told the Reuters Aerospace and Defense Summit that an "awful lot of smaller programs" faced delays, cuts and even cancellation if the cuts stayed in effect, while fewer of the big-ticket weapons programs would be affected.

Kendall cited damage from ongoing uncertainty about budget levels, and the inability of lawmakers to find alternative ways to reduce the federal deficit. The 2014 fiscal year starts on October 1, and Kendall said he assumed that sequestration would be in effect for some, if not all, of the coming year.

"It forces us to go in and do things that we really don't want to do," he told the summit.

Kendall said he was deferring some commitments on acquisition programs, based on priorities.

"Depending upon how long this lasts, there'll be more on the list as time goes on," he said. "Until we can go through the fiscal year 2015 planning process and do some more detailed analysis on what long-term sequestration might look like, we don't really want to make major commitments that we might have to defer."

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(Reporting by Andrea Shalal-Esa. Editing by Ros Krasny and Andre Grenon)