WASHINGTON Feb 6 U.S. defense officials and
their allies in Congress did their best on Wednesday to create a
sense of crisis about steep impending budget cuts but their
warnings failed to produce any visible result.
Instead, partisan divisions over how to avoid the automatic
spending reductions set for March 1 hardened, with Democrats and
Republicans offering solutions that appeared irreconcilable and
trading accusations designed to shift the blame across the
If Congress fails to act by March 1, across-the-board
spending cuts of $85 billion over seven months will hit federal
agencies, split evenly between military and domestic programs.
Defense contractors and economists are predicting hundreds of
thousands of jobs could be lost within a matter of months.
The positions are much the same as they were during the New
Year's "fiscal cliff" drama: Republicans want to pay for a
short-term delay with other spending cuts, while Democrats want
the wealthy to pay more in taxes to help cover the gap.
Missing is the atmosphere of doom or worry about a market
reaction that pervaded the cliff controversy late last year.
"It's not like on March 2 something horrible happens like a
market crash," said a U.S. Senate aide, attempting to explain
the inactivity in Washington. "It'll be cumulative, unlike the
cliff," said the aide, who asked not to be identified.
Evidently concerned about that attitude, the defense sector
ratcheted efforts on Wednesday to sound the alarm.
Defense Secretary Leon Panetta told students at Georgetown
University that a "a dangerous and callous attitude" is
"developing among some Republicans and some Democrats, that
these dangerous cuts can be allowed to take place in order to
blame the other party for the consequences. This is a kind of
'so what?' attitude that says, 'Let's see how bad it can get in
order to have the other party blink.'"
He said the cuts - known in budget jargon as a "sequester" -
would require the Pentagon to put as many as 800,000 civilian
employees on unpaid leave for 22 work days, reduce Navy
operations in the Western Pacific by up to one-third and cut Air
Force flying hours.
At the White House, a day after Obama urged Congress to pass
a small package of spending cuts and tax reforms to avert the
sequester, senior officials met with a group of six major
"The focus of their conversation was the potentially
devastating impact of the sequester going into effect," White
House Press Secretary Jay Carney told reporters.
Carney noted that one of the companies, Northrop Grumman
Corp, had a supply chain of 20,000 small businesses that
would also be hurt by the broad cuts.
AIR FORCE WORRIES
Separately, the U.S. Air Force told Congress it will have to
curtail its orders for Lockheed Martin Corp's F-35
fighter jet, restructure a $52 billion tanker contract with
Boeing Co and reduce its flying hours by 18 percent if
lawmakers do not avert the cuts.
In a draft presentation to the House of Representatives
Armed Services Committee obtained by Reuters, the Air Force said
it faced shortfalls of $1.8 billion in war funding and $12.4
billion overall if Congress does not forestall the cuts.
While leaders of both parties say they share the concern
about the cuts, the proposals they continued to advance
Wednesday were far apart.
Aides said Democratic lawmakers have reached a consensus to
join Obama in demanding more revenues as part of any deal.
Democrats believe that the American public backs this
position. At a retreat in Annapolis, they discussed new polling
data showing that a strong majority of voters wants the
wealthiest 2 percent of Americans - and large corporations - to
pay more in taxes, even after the fiscal cliff deal raised tax
rates on income above $450,000.
Republicans say that they have already given ground on more
tax revenue, and any deficit reduction from here on out must
come from spending cuts, a position repeated Wednesday by
Republican House of Representatives Speaker John Boehner.
In the U.S. Senate, a group of Republicans on the Armed
Services committee proposed delaying the spending cuts, known as
a sequester, until the 2013 fiscal year ends on Sept. 30.
But their plan would replace the $85 billion in cuts with
savings achieved by shrinking the federal workforce by attrition
over a multi-year period, an approach unacceptable to Democrats.
As government workers left their jobs, they would not be
replaced. The plan also would extend a congressional pay freeze
that was put in place as part of the Jan. 1 fiscal cliff deal.
These lawmakers said their plan would protect vital defense
programs and military readiness.
"To my Republican colleagues ... if you feel comfortable
with cutting the government this way, then you have lost your
way as much as the president," said Senator Lindsey Graham of
South Carolina, issuing a challenge to those in his party
willing to accept the cuts.
"I am sure Iran is very supportive of sequestration. I am
sure al Qaeda training camps all over the world must be pleased
with the fact that sequestration will gut the CIA and the
intelligence platforms that follow them around," Graham said.
Lawmakers whose districts have heavy concentrations of
military installations and defense manufacturing are growing
nervous about the looming cuts.
Representative Rob Bishop, a Republican member of the Armed
Services Committee, said he would support a postponement of the
cuts without any offsetting savings.
"I'll take any kind of postponement I can get," Bishop said,
worried about the defense workers in his Utah district. "I feel
for my constituents who have had their salaries frozen for