* Officials urge lawmakers to avert across-the-board cuts
* Reductions seen hitting procurement particularly hard
* Planning to begin over next month
By Andrea Shalal-Esa
WASHINGTON, Sept 20 The Pentagon's top money man
again urged Congress to stop across-the-board budget cuts that
he said would devastate the U.S. military, but downplayed the
prospect of billions of dollars in contract termination fees
forecast by some in industry.
Undersecretary of Defense Robert Hale said on Thursday
piling $500 billion in additional cuts on top of $487 billion
already planned for the next decade would hit operations and
training, procurement and civilian personnel accounts
He told members of the House Armed Services Committee that
the Pentagon faced $52.3 billion in spending cuts in fiscal
2013, with every budget category except military personnel
facing a 9.4 percent reduction.
That meant the Pentagon would be able to buy fewer weapons
and those it could buy would cost more, while work on ships and
other bigger weapons systems would likely be delayed.
Hale urged Congress to act quickly to avert the cuts rather
than try to mitigate their effect.
"We need to avoid this thing, not try to make it better," he
said. "If you're driving into a brick wall at 60 miles an hour,
let's find a way to avoid the wall, not figure out a way to pick
up the pieces after we hit it."
Democrats and Republicans are united in opposing additional
across-the-board cuts in defense spending over the next decade,
but have failed to reach agreement on $1.2 trillion in other
deficit-reducing measures that would be needed to avert the
automatic cuts to be split between defense and non-defense.
Industry executives say uncertainty about the process known
as sequestration is already forcing them to cut jobs, close
facilities and slow down spending on research.
They are pressing the Pentagon and White House for details
on how the cuts would be executed so they can better prepare.
The White House budget office sent a report to Congress last
Friday, but it only gave the impact for broad budget categories.
Top officials from the Army, Navy, Air Force and Marine
Corps insisted they would protect funding for troops already
deployed overseas, but said the military would be less ready to
respond to other disasters or crises if the cuts went through.
Hale said the cuts would not apply to money that had already
been put under contract, which meant that most contracts signed
before Jan. 2, 2013 would not need to be renegotiated --
averting billions of dollars in change fees expected by some
"Both because of the law and the way we'd implement it ... I
don't see those sorts of large cancellation fees," Hale said,
adding that the department would also seek to avoid severance
costs wherever possible.
Mike McCord, principal deputy undersecretary of defense,
told a separate hearing by the House Small Business Committee,
that the Pentagon would use its authority within contracts to
buy less, rather than having to renegotiate contracts.
"If we have within the scope of the contract the ability to
buy, say 10 percent less, we would probably do so," he said. "It
would not be our intent to go reopen contracts if avoidable."
However the Pentagon does have eight longer-term contracts,
such the Air Force's deal with Boeing Co for 179 new
refueling planes, that would be affected.
Air Force Vice Chief of Staff General Larry Spencer told the
hearing on Thursday that he did not expect to have to cancel the
tanker contract with Boeing, but said the payment schedule might
have to be renegotiated, depending on the size of the cut.
That in turn could prompt a change in the schedule or even
an increase in the previous price negotiated, he said.
"As we go down the thousands of contracts and thousands of
lines that's the type of process that we have to go through with
every contract," Spencer said.
Hale said he still hoped Congress could reach a deal to
avoid sequestration, but said the department would begin
planning how to implement the cuts over the next month, followed
by more detailed efforts in the subsequent six weeks.
"We'll wait as long as we can to begin this process, again
in hopes that it is halted, but we won't wait so long that we
won't have this department ready if in fact it goes into effect
on January 2," Hale said.