DoD

July 26, 2013

DOD girds for more budget reductions, Carter says

WASHINGTON, D.C. – Ten days after unpaid furloughs began nationwide for many DOD civilian employees as a measure to meet sequester cuts, Deputy Defense Secretary Ash Carter said yesterday the department is planning for similar budget cuts that may continue into fiscal year 2014 and perhaps beyond.

Carter spoke with David Sanger, the chief Washington correspondent for the New York Times, at the annual Aspen Institute Security Forum in Colorado.

“If a budget deal can’t be put together by Congress that can be approved by both houses of Congress … [and] that the president can sign,” Carter said, “then we will drift into next year with some continuation of what we’ve had this year.”

Carter said the department began 4 months ago to prepare for that and other potential outcomes.

“The president’s budget has further cuts for us in it to meet the objective of deficit reduction but [the cuts] phase in gradually, which from a management point of view is the sensible way to do things,” he added. “… But I don’t know that the president’s budget is going to be approved.”

The department is examining several scenarios, Carter said, “right up to the possibility that this does become the new normal and that our budget is simply cut and stays low for a period of time.”

The department does its best every day to get a sensible result from the new budget constraints, Carter said, explaining why unexpected cuts do more harm than good.

The defense budget has three pieces — people, operations, and investment — and Carter said he has to take money out of those three pots.

“I can’t take money out of people just like that,” the deputy secretary said, “because I can involuntarily separate people in uniform but it turns out that it costs me as much to put them on the path to involuntary separation over the course of a year as it costs to just pay them.”

That means cuts must come from operations and investment.

Included in the operations pot are the war in Afghanistan, nuclear deterrence and other important items that are protected from cuts, he said.

“What happens as a result is that the cuts end up not spread out over our entire defense budget but bulged into a few areas, and the two areas that are most painful are training and readiness, and our civilian people, who are getting furloughed,” Carter said.

Under training and readiness, he said, the department protects training for units that go to Afghanistan and for those that would be in what DOD calls “fight tonight” on the Korean Peninsula if a war were to occur there.

“We’re trying to protect training for the units that are most likely to find themselves in combat. But for other units, we can’t afford to train them and that’s risky because if something does happen those units won’t be fully ready,” the deputy secretary said.

Furloughs began recently for many of the 800,000 civilians who work in a variety of jobs for DOD, Carter said.

“These folks have had their pay frozen for 3 years and they’ve had a hiring freeze, and now we’re taking a fifth of their paycheck in the last quarter of the year, which is causing many of them to have to change their family plans and not do things that they had hoped to do for their kids,” Carter said. “… It’s a miserable way to treat people.”

What the Defense Department really needs from Congress, Carter said, is time to reduce the department’s budget strategically and intelligently.

“You can’t just snap your fingers and reduce the size of the force,” he added. “… Having yet another year next year like this year, where you suddenly have to take a large amount of money out, leads to the kind of twisted results that you see associated with sequester.”

Carter says he worries a great deal about the international perception of sequester and the U.S. budget situation.

“This is something that makes us look like we are senselessly enfeebling ourselves and therefore disheartens our partners and friends and allies. And it’s something that could potentially embolden those who might commit aggression,” he said.

But after the nation has had time to adjust, it will be fine, the deputy secretary added.

“This is not a cataclysm for American defense,” Carter said. “… We’ll keep our eye on [our priorities] and we’ll eventually make this strategic transition …. It’ll be slower, it’ll be less graceful, but we’ll do it anyway and nobody should have any doubt about that.”




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