DoD's recovery from sequestration-related cuts will take months, years

Monday - 3/4/2013, 5:21am EST

Jared Serbu, DoD reporter, Federal News Radio

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In response to the onset of sequestration, the Pentagon will begin to take additional actions to pare back spending in each of its accounts, including steps that will prove to have consequences that last well beyond the current fiscal year, officials said Friday.

Reacting to the order from the Office of Management and Budget to federal agencies to implement sequestration, DoD will scale back military training, ground airplanes and take other measures to conserve funds for the remainder of the fiscal year. Defense agencies and the military services have been curtailing some operations and taking other steps such as freezing civilian hiring since mid-January, when Pentagon leaders said they no longer could wait on a political agreement on the budget before taking action in preparation for the dual potential problems of a full-year continuing resolution and sequestration.

Secretary of Defense Chuck Hagel

But those steps were designed to be reversible to the maximum extent possible. Now that sequestration is a reality, the next round of cutbacks will have lasting impacts that will become progressively worse as time goes on, the Pentagon leaders believe.

"I know that these budget cuts will cause pain, particularly among our civilian workforce and their families," Defense Secretary Chuck Hagel told reporters Friday. "I'm also concerned, as we all are, about the impact on readiness that these cuts will have across our force. For these reasons, the department's senior leadership and I will continue to work with the administration and Congress to help resolve this uncertainty. We need a balanced deficit reduction plan that leads to an end to sequestration. And we need Congress to pass appropriations bills for DoD and all federal agencies."

Furlough notification to start soon

Until and unless that happens, Defense components will comb through their service contracts to decide which ones they can cancel or scale back, acquisition managers will make decisions about how or whether it's possible to move forward with their individual programs, and within the next couple weeks, DoD will notify civilian employees that they are targeted for one-day a week furloughs that would most likely begin in late April.

Ashton Carter, the deputy Defense secretary, said the military services will cut back on training right away. The Army only will be able to train about 22 percent of its soldiers: those who are next in line to deploy to Afghanistan.

Ashton Carter, deputy Defense secretary

"You'll see the Army beginning to curtail training at, for example, the National Training Center. You'll see the Air Force beginning to curb flying hours. The nuclear-capable Air Force and that part of the Air Force that is participating in operations in Afghanistan, we will protect them, but that means that the cuts caused by sequestration and the continuing resolution will fall more heavily on other parts of the combat Air Force," he said. "They'll need to cease training, which means they won't be ready for other conflicts, which is a serious impact. You've already seen the Navy begin to make adjustments in terms of how many ships are at sea."

The Navy also plans to ground at least four flight squadrons, Hagel said.

Meanwhile, the department's acquisition workforce will need to break open each one of the Pentagon's 2,500 procurement programs and determine the best path forward given the 7.8 percent &mash; or 13 percent over seven months — funding reduction that each one of them will take under sequestration.

"And so we're working with our industry partners on each of those, and you'll see them begin to make adjustments, for example, in the number of weapons systems in a given category that are being purchased," Carter said. "They'll be trying to arrange for fewer items in a contract than we anticipated were going to be put in a contract. That's the kind of thing you'll see, and this progressively builds over the coming months. It constitutes a serious problem, particularly in the readiness accounts."

Some flexibility with O&M accounts

The military services' readiness funds are under particular pressure because of the combined effects of sequestration and the continuing resolution. Since the CR simply reuses 2012's budget numbers for this year, each of the branches have less than they requested in their operation and maintenance accounts, which fund training, maintenance and many other activities. Meanwhile, many of the Pentagon's acquisition programs have more money than DoD asked for, at least before sequestration, and there's no legal way for the department to move money between those funding lines.

One of the areas of flexibility it does have is in its broad O&M accounts, and it is using that flexibility to prioritize operations in Afghanistan, for the operation of nuclear bombers, and for forces on the Korean peninsula. That means the cuts will hit non-wartime operations and maintenance spending in a vastly disproportionate way, and Carter said they will have impacts that will take months or years to recover from.

"In this as in every other area, we're doing everything we can to minimize lasting damage. But you can't eliminate it. For example, when you can't afford to begin overhaul or maintenance of a ship and you defer that maintenance. Our shipyards have planned maintenance planned out heel to toe through many years. And so once you've created a gap this year that gap propagates into the future," he said.

Pilots could lose their ratings

Those gaps already are beginning to appear for the Navy because of the delay this year's CR forced to the first scheduled complex overhaul of the 24-year-old carrier U.S.S. Lincoln. While Lincoln is parked at a Norfolk, Va. pier until funds become available, work on the next ship to come into the massive carrier dry dock also is delayed on what they Navy says will be a day-for-day basis.

Carter said the Air Force will see an analogous problem as a result of its cutbacks to flying hours.

"If you stop training for a while and you're a combat pilot, then you'd lose your rating and eventually you can't fly at all, because we can't allow you to fly if you can't fly safely. Then you have to go back to the long building-back process of getting your readiness back," he said. "Even if this is temporary — and everybody hopes that in some way both sequester and the problems associated with a continuing resolution will be resolved through a large budget deal of some kind — but even were that to occur some months from now, there would be lasting damage from this. It's very serious."

The Defense spending cuts will hit some states harder than others.

Carter sent warning letters to the governors of 10 states that will be most severely impacted: Virginia, Texas, Pennsylvania, Georgia, Florida, California, Maryland, Ohio, Alabama and Washington.

The letters lay out in stark terms the number of civilian defense workers in each state who will face unpaid furloughs and the cutbacks that will hurt local bases and defense contractors. DoD provided copies of the letters Friday to The Associated Press.

The Associated Press contributed to this report

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