Pentagon chief says shutdown hurts U.S. credibility with allies
* Hagel says 400,000 defense civilians will be sent home from work
* New law could enable some civilians to be called back later
* Action casts 'very significant pall' over security alliances
SEOUL, Oct 1 (Reuters) - The U.S. government shutdown will undermine American credibility abroad and lead allies to question its commitment to treaty obligations, the U.S. defense chief warned on Tuesday as he prepared to put 400,000 civilian workers on unpaid leave.
Defense Secretary Chuck Hagel, who was visiting South Korea to celebrate the two nations' 60-year-old mutual defense treaty, said Pentagon lawyers were analyzing a new law passed by Congress to see if additional civilian workers could be spared unpaid leave.
But for the moment, when the department's 800,000 civilians report to work on Tuesday, approximately half will be told they are not exempted by law from the government shutdown and asked to go home, Hagel told reporters.
The Pentagon and other U.S. government agencies began to implement shutdown plans on Tuesday after Congress failed to reach a deal to fund the federal government in the new fiscal year beginning Oct. 1.
A last-minute measure passed by Congress and signed by President Barack Obama will ensure the Pentagon's 1.4 million military employees worldwide will continue to receive paychecks during the shutdown. They were required to work under prior law but would not have been paid until Congress approved funding.
The new law also ensures that civilians who are required to work despite the shutdown will also be paid, Hagel said. But under law, anyone not directly involved in protecting lives and property are not considered exempt and must be placed on leave.
"Our lawyers are now looking through the (new) law that the president signed ... to see if there's any margin here or widening in the interpretation of the law regarding exempt versus non-exempt civilians," Hagel said. "Our lawyers believe that maybe we can expand the exempt status."
Hagel said he didn't know how many people the department might be able to call back from leave, or how long it would take to reach a determination, but he said it was "the priority" in the Pentagon's general counsel's office.
The shutdown has direct implications for the staff with Hagel on his week-long trip to South Korea and Japan. They are considered exempt while supporting the secretary's mission abroad, but that status may change for some when they return home on Friday, Pentagon spokesman George Little said.
The U.S. defense chief said he broke away from celebrations in South Korea on Monday to discuss the shutdown by phone with Deputy Defense Secretary Ashton Carter and Pentagon Comptroller Robert Hale. He said they would hold another round of talks on Tuesday as the shutdown went into force.
"We'll probably have to furlough about 400,000 DoD (Defense Department) civilians when they come to work here in a couple of hours," Hagel said. "Those that have been designated non-exempt will be told and will be asked to go home."
The Pentagon chief said since arriving in Seoul on Sunday night, he had been questioned by South Korean officials about the threatened shutdown and why it seemed likely to take place.
"It does have an effect on our relationships around the world and it cuts straight to the obvious question: Can you rely on the United States as a reliable partner to fulfill its commitments to its allies?" Hagel told reporters.
"Here this great republic and democracy, the United States of America, shuts down its government," he added. "The Pentagon, even though we are (partly) exempted, the military has no budget. We are still living under this dark cloud of uncertainty not knowing what's going to happen.
"It does cast a very significant pall over America's credibility with our allies when this kind of thing happens. It's nonsensical ... It's completely irresponsible," Hagel said.
He urged Congress to "find a new center of gravity of responsibility and start to govern as is their responsibility."
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