Panetta: More DoD cuts 'completely unacceptable'

Friday - 8/5/2011, 5:31am EDT

Jared Serbu, Federal News Radio reporter

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By Jared Serbu
Reporter
Federal News Radio

In his first news conference as defense secretary, Leon Panetta told reporters the military could handle the initial $350 billion worth of cuts this week's debt-reduction agreement calls for. The potential second round the deal threatens, on the other hand, would be "doomsday."

Even before the latest wrangling over the debt deal, President Barack Obama had already told the Pentagon to expect $400 billion in national security spending reductions. But the agreement the president signed this week to end the debate over raising the debt ceiling would take an additional $500 billion from DoD if Congress can't come up with alternative ways to cut spending in the federal budget in a year's time.

That failsafe has been termed "sequestration" in this and past situations in which Congress has attempted to establish an autopilot switch for federal budget cuts. For DoD, Panetta said, a cut of that magnitude would be "completely unacceptable."

"If it happened — and god willing, that would not be the case — but it would result in a further round of very dangerous defense cuts across the board," he said. "Cuts that I believe would do real damage to our security, our troops and their families, and our military's ability to protect the nation. It is an outcome that would be completely unacceptable to me as secretary of defense, the president and, I believe, to our nation's leaders."

Panetta no stranger to budget balancing
Citing his past experience as White House budget director under President Bill Clinton, Panetta said Congress needs to look beyond discretionary spending as it seeks a more balanced budget.

"If you're going to deal with those size deficits, you've got to look at the mandatory side of the budget, which is two-thirds of the federal budget," he said. "And you also have to look at revenues as part of that answer."

Panetta said the Pentagon is continuing the comprehensive budget review that was started under former Defense Secretary Robert Gates. The aim of that exercise is to present to the president and Congress the tradeoffs DoD would have to make in order to reduce its spending by several hundred billion dollars.

While that review is not yet finished, Panetta said it is already clear that cutting much beyond the $400 billion the president has already requested would have dire consequences. He said he does not intend to begin mapping out what the additional $500 billion reduction would mean to DoD.

"I am not even beginning to consider what would happen with regards to sequestration … all I know is from the review we've been doing, from what we've been dealing with under these numbers, anything that doubles that would be disastrous to the defense budget," he said.

Can DoD swallow the pill?
But there are risks in not planning for the potential of much larger cuts, said David Berteau, a former DoD official who's now a senior advisor at the Center for Strategic and International Studies. Deciding whether to take seriously the potential cuts set up by Congress' trigger mechanism creates a "comptroller's dilemma," he said.

"Do you plan for that additional $500 billion? Do you say the odds of sequestration are higher than zero? There's a reasonable probability you're going to have to come up with a lot more money. But the minute you start planning for those cuts, you've sent the signal that they are acceptable. They're doable. We can swallow that pill," he said. "So do I wait until next year and find out that instead of being eight-feet deep, the water is 400-feet deep and I can't swim? Or do I plan for it, and guarantee that the water will be 400-feet deep?"

But American University professor Gordon Adams, who served as the White House's budget director for national security affairs in the 1990s, said even though DoD will no doubt have to do some serious budget cutting, it won't be caused by the legislation that brought a temporary end to the debt crisis. Congress, he said, has a tendency to work around caps, triggers and other forcing mechanisms that it sets for itself.

The current agreement, he said, is focused more on perpetuating the spending argument until the next election than on reducing the nation's debt. That's not to say DoD's budget won't be cut over the next decade, Adams said — but it won't be because of the debt legislation. He predicts that by the end of the decade, the Pentagon will have spent up to $1 trillion less than it's now planning to.