While many remain hopeful that Congress and the administration will reach a deal that avoids sequestration, Defense Secretary Leon E. Panetta has issued a memo describing the potential implications of going over the fiscal cliff.
Planning for the effects of an across-the-board cut in defense spending as part of the Budget Reduction Act of 2011 “is only prudent,” said DOD officials. Under the law, the reductions are due to take place Jan. 2, 2013.
Panetta said it is too early to assess what effects sequestration will have. He did say that it will not affect military personnel or military end strength as President Barack Obama announced his intent to exempt the military personnel accounts from sequestration last summer.
The secretary did clarify the potential implications of sequestration in his memo.
“If it occurs, sequestration will reduce our budgetary resources for the remainder of the fiscal year,” the memo says. “These cuts, while significant and harmful to our collective mission as an agency, would not necessarily require immediate reductions in spending.”
There is no threat of a government shutdown because of sequestration, Panetta said in the memo.
“Everyone will show up for work on Jan. 3, 2013, and continue to drive on,” said Army Lt. Col. Elizabeth Robbins, a Pentagon spokeswoman.
The memo states that there will be no immediate civilian personnel actions such as furloughs.
“Should we have to operate under reduced funding levels for an extended period of time, we may have to consider furloughs or other actions in the future,” Panetta said in the memo. “But let me assure you that we will carefully examine other options to reduce costs within the agency before taking such actions.”
If the department does need to take these actions, affected employees will receive all appropriate notifications, the secretary noted.
The Defense Department is already reducing its budget by $487 billion over 10 years. The Budget Control Act calls for a further $500 billion in cuts at DOD unless Congress and the administration pass a new law averting it.
“Sequestration was never intended to be implemented and there is no reason why both sides should not be able to come together and prevent this scenario,” Panetta wrote.