Panetta: Defense budget cuts will damage economy

By Lolita C. Baldor

Associated Press

Published: Wednesday, Feb. 6 2013 12:28 p.m. MST

Secretary of Defense Leon Panetta delivers his speech to Georgetown University students and faculty on leadership and public service in Washington, Wednesday, Feb. 6, 2013.

Manuel Balce Ceneta, Associated Press

Enlarge photo»

WASHINGTON — Defense Secretary Leon Panetta on Wednesday laid out a grim list of spending cuts the Pentagon will have to make in the coming weeks that he said will seriously damage the country's economy and degrade the military's ability to respond to a crisis.

Slamming members of Congress as irresponsible, Panetta said lawmakers are willing to push the country off a fiscal cliff to damage their opposing political parties.

He said that if Congress doesn't pass a budget the Pentagon will have to absorb $46 billion in spending reductions in this fiscal year and will face a $35 billion shortfall in operating expenses.

"My fear is that there is a dangerous and callous attitude that 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," Panetta said in a speech at Georgetown University. "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'."

In separate, highly detailed memos sent to Congress, the military services described widespread civilian furloughs, layoffs and hiring freezes that will hit workers all around the country. Overall, the military will furlough 800,000 civilian workers for 22 days, spread across more than five months, and will lay off as many as 46,000 temporary and contract employees.

The Navy says it will cease deployments to South America and the Caribbean and limit those to Europe.

The Air Force warned that it would cut operations at various missile defense radar sites from 24 hours to eight hours. And the Army said it would cancel training center rotations for four brigades and cancel repairs for thousands of vehicles, radios and weapons.

"These steps would seriously damage the fragile American economy, and they would degrade our ability to respond to crisis precisely at a time of rising instability across the globe," Panetta said, adding that the self-made crisis "undermines the men and women in uniform who are willing to put their lives on the line in order to protect this country."

In addition to all of the more immediate cuts, U.S. troops are also likely to see a smaller pay hike next year than initially planned, due to strains on the budget. According to a defense official, the Pentagon will recommend that the military get a 1 percent pay increase in 2014, instead of a 1.7 percent raise.

The Georgetown appearance was likely one of Panetta's last speeches. He is set to leave the Pentagon this month. Former Republican senator Chuck Hagel has been nominated to take his place and a vote by the Senate Armed Services Committee is expected this week.

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