The Marine Corps has already spelled out the likely consequences of sequestration. So has the Navy, which has already cancelled an aircraft carrier deployment to the Persian Gulf. Now comes the Army. It has just released a memo laying out the impact of $18 billion in cuts it is expected to endure if sequestration occurs next month.
The Army will do everything it needs to do to make sure that units rotating to Afghanistan and South Korea are fully prepared for combat. But to do that it will have to stint on training and readiness for the rest of the force. The memo says that the effect of this “shortfall” will be “devastating to training and readiness in FY13 and affects FY14 and beyond.”
Sequestration is already hitting. It’s no longer about trimming the fat, but rather about undercutting U.S. national security. I was supposed to head off on the USS Harry S. Truman tomorrow as it began its deployment toward the Persian Gulf. I just received the call now not to bother. From the press down at Hampton Roads, Virginia:
U.S. officials say that budget strains will force the Pentagon to cut its aircraft carrier presence in the Persian Gulf area from two carriers to one. As a result, the aircraft carrier Harry S. Truman won’t deploy from Norfolk on Friday as planned.
Reading this Politico article this morning has really depressed me: “House GOP thinks unthinkable on defense cuts.” It reports: “A new breed of conservatives in the House cares so much about cutting spending they’re willing to extend that to the budget for bullets and bombs, too — in this case, by letting $500 billion in across-the-board automatic budget cuts over 10 years take effect, alongside a similar number for domestic agencies.”
This is crazy on many levels. Start with the policy implications: The Pentagon can’t afford another $500 billion of cuts on top of the $500 billion or so that has already been cut–not at a time when the armed forces must grapple with new missions such as dealing with the spread of al-Qaeda in Africa and an upsurge in cyber attacks.
Democrats spent the 2012 presidential campaign successfully blaming George W. Bush for the country’s sluggish economy. But a week after President Obama’s second inaugural, they are still not taking responsibility for the country’s fiscal health. The White House responded to yesterday’s disturbing news that GDP declined for the first time since 2009 in predictable fashion: they blamed the bad numbers on Republicans. White House spokesman Jay Carney said the dip was the fault of “Congressional Republicans” who have tried to restrain the government’s out-of-control spending. Even though the president got his way in the fiscal cliff negotiations with the GOP, Carney said the threat of sequestration, which would mandate across-the-board spending cuts, is the real culprit for the downturn and that the “brinksmanship” by the House Republicans was victimizing the nation’s economy.
This was thin gruel even from a practiced spin master like Carney. The idea of sequestration, which will have a particularly devastating effect on defense, originated in the White House and not the GOP caucus before it was put into the 2011 deal on the debt ceiling. But while we must give Carney credit for his usual chutzpah, the idea that Republican efforts to face up to chronic fiscal problems via entitlement reforms is to blame is a particularly depressing example of the ideological dead end into which the administration has driven the economy. As John Steele Gordon wrote yesterday, there is no way of knowing yet whether yesterday’s GDP numbers are the harbinger of an Obama recession or merely a statistical anomaly, but the steadfast refusal of the White House to face up to the long-term threats is what could be driving the economy into the ditch.
Sequestration–the process of automatically cutting more than $500 billion from defense spending over the next decade–was momentarily delayed by a last-minute deal between Congress and the White House reached just before it was due to take effect on January 2. But the delay isn’t long–unless a new deal is reached, sequestration will hit on March 2. And odds are no deal will be reached. As Paul Ryan noted on TV this weekend, sequestration is likely to go into effect. This is because the price that the White House is demanding to prevent it–which would include further cuts in defense spending along with tax hikes–is too high for Republicans to stomach.
We don’t know exactly how this process is going to play out, but the Navy has released an instructive memo detailing the very real damage that sequestration will do to our defense capabilities. As summarized by Defense News, the consequences of sequestration include:
The Hill reports that the defense industry is anxious the fiscal cliff tax deal may increase the likelihood of Pentagon cuts:
The defense industry is worried last week’s budget deal on taxes could damage its negotiating position for the next “fiscal cliff” deadline two months from now, when across-the-board spending cuts would take effect.
The deficit debate is shifting from taxes toward spending cuts and the debt limit, where there will be more of a focus on new cuts to the Pentagon.
While the first fiscal cliff fight over taxes included the threat of massive across-the-board spending cuts, the sequel is going to be nearly all about where to cut spending. The Pentagon is the largest target outside of entitlements. …
Some defense analysts say that the shift in the Republican Party away from national security, with the rise of the Tea Party, was highlighted during the fiscal-cliff negotiations, where taxes trumped defense in importance. …
“Other issues have overtaken national security as being more important,” said Mackenzie Eaglen, a defense analyst at the conservative-leaning American Enterprise Institute.
“I think it does show how the Republican Party is no longer the party of national security, no longer a big-tent party of Reagan Republicans where a strong defense was a central tenet of conservatism.”
The Senate’s early-morning budget deal kicks the can down the road–not very far down the road–for about two months. For those of us who focus on defense policy, the good news is that the Senate at least agreed to address the looming sequester, something that looked unlikely as recently as a few days ago.
According to this report in the Washington Post, “The last last piece of the puzzle to fall into place was the sequester, which would be delayed until early March under an agreement to raise $12 billion in new tax revenue and $12 billion in fresh savings from the Pentagon and domestic programs.” Presumably that means that the cost of turning off the sequester for two months is about $6 billion in extra defense cuts. That’s much better than $50 billion in cuts, which would have hit if sequestration had occurred, but given how much the Defense Department has been cut already (remember that the budget deal of 2011 slashes some $500 billion over 10 years), while entitlement spending (the main driver of our debt) has not been cut at all, there is scant justification for cuts of any size. At least on the merits.
Just as it looked like a fiscal cliff deal was coming together, President Obama gave a partisan, sarcastic speech this afternoon that seemed intended to set back the entire process. As Jonathan wrote, Republicans have good reason to think the president’s goal is to go over the cliff. But they also suspect the White House is preparing to push for further tax increases, in addition to the hikes on individuals making over $400,000 (and families making over $450,000) a year.
“What they’re telegraphing to me is that when Republicans ask for spending cuts, [Democrats are] gonna say ‘You’re not getting those unless we get more tax hikes’,” said one Republican Senate aide after the speech.
The newspapers are full of articles about negotiations over tax hikes and spending cuts as Congress and the White House face the impending “fiscal cliff.” There is much less said about another consequence of our mindless budgeting: the very real possibility that our armed forces will face devastating cuts on January 2. That is less than a month away but, given how little attention sequestration is receiving, it feels as if we’re sleepwalking toward disaster.
This, in spite of the fact that there is bipartisan agreement that sequestration will have dreadful consequences for our military readiness, requiring an across-the-board cut of roughly 10 percent in all spending, no matter how important. That will amount to $500 billion over the next decade–on top of the nearly $500 billion already enacted in 2011. Even those such as retired Admiral Mike Mullen and retired Senator John Warner, who think that it’s OK to cut the military budget judiciously, oppose the sequestration approach. As Warner said at an event in Washington: “You cannot take a sledgehammer [to the Pentagon budget]… We can and should reduce it. But it has to be done carefully. … You cannot break defense and hope to glue it back together the next day.”
On November 19, I published an item taking issue with current calls to cut the ground forces. We should not repeat the mistake that Donald Rumsfeld almost made before 9/11, I argued, when he was planning to cut two divisions from the army. Now Rumsfeld has taken strong exception to my article, writing, “That is flat wrong. There was not any plan to cut the size of the U.S. Army that I was ever aware of. No such plan was ever presented to me. Further, I would not have supported it if such a plan had been brought to me.”
I was startled by Rumsfeld’s denial of what was commonly reported both at the time and since. See, for example, this Wall Street Journal article from Aug. 8, 2001, by ace military correspondent Greg Jaffe. He reported:
Aides to Defense Secretary Donald Rumsfeld are calling for deep personnel cuts to the Army, Navy, and Air Force in order to pay for new high-tech weaponry and missile defenses that are cornerstones of President Bush’s plan to “transform the military.”
The proposal to reduce manpower—part of a congressionally mandated defense review due next month—calls for the Army to trim as many as 2.8 of its 10 divisions, or about 56,000 troops. …. Mr. Rumsfeld and top generals of each military service were briefed on the recommendations for the first time yesterday.
Last week, our Max Boot wrote to disagree with a New York Times column that supported Pentagon budget cuts and praised former Secretary of Defense Donald Rumsfeld’s position on transformation of the military. Mr. Rumsfeld has written us to reply:
I was amazed to read in Max Boot’s blog post, “Technology is No Substitute for Troops,” that “Rumsfeld was actually planning to cut two divisions from an army which had already been cut by one-third since the end of the Cold War.” That is flat wrong. There was not any plan to cut the size of the U.S. Army that I was ever aware of. No such plan was ever presented to me. Further, I would not have supported it if such a plan had been brought to me. Nor have I ever uttered the words that “technology is a substitute for troops.”
When I arrived at the Pentagon in 2001, my focus was on increasing the budget for the Defense Department to undo the damage that cuts in the 1990s had inflicted on our Armed Forces. That included investing in technologies such as UAVs and precision guided munitions, and considerably strengthened our special forces—in numbers, equipment and authorities–but also increasing the size of our ground forces as necessary. Indeed, in 2004 and 2006, we increased the end strength of both forces by tens of thousands of troops.
I never thought I’d live to see a former New York Times editor praise Donald Rumsfeld. That day has now arrived–and it is hardly a cause for rejoicing.
Today Bill Keller writes in favor of defense cuts, as if the $487 billion that was lopped out of the Pentagon budget last summer were not enough. He thinks greater savings can be achieved by seeking “a significant cut in active-duty ground forces and the heavy vehicles and artillery that go with them,” as if the army and Marine Corps were not already set to lose roughly 100,000 troopers. He argues that we don’t need all those ground forces anyway–”Keeping America and its allies safe these days depends more on our formidable array of ships, aircraft and precision-guided munitions, plus small units of highly trained special ops and drones to combat terrorist cells.” He then goes on to advocate various other ideas, including reforming the procurement process and pushing for greater inter-service consolidation. The really priceless part comes when Keller concedes:
None of this is new thinking. The last secretary of defense who called for a postwar transformation of the military was Donald Rumsfeld. He arrived at the Pentagon in 2001 for his second tour with an insider’s understanding of the system, a C.E.O.’s impatience with inefficiency, and an awareness that the end of the cold war presented a different world of threats. He was not a budget-cutter, but he wanted the money spent well. Before his good intentions got lost in the slogs of Afghanistan and Iraq, he railed at the interservice rivalries, the waste, the reluctance to give up anything or think afresh.
One of the most puzzling answers that President Obama gave in the third presidential debate concerned the subject of sequestration—the process that will result in across-the-board cuts to spending of $1.2 trillion starting in January, with half that amount being cut from the defense budget. When the subject came up, Obama said, “First of all, the sequester is not something that I’ve proposed. It is something that Congress has proposed. It will not happen.”
As it happens, neither part of that short statement is strictly factual. Regarding the president’s claim that he did not propose sequestration—on this score he is flatly contradicted by Bob Woodward who wrote in his recent book, The Price of Politics, that sequestration originated in the White House and was sold to Senate Majority Leader Harry Reid by budget director Jack Lew and legislative director Rob Nabors. Woodward now says: “What the president said is not correct. He’s mistaken. And it’s refuted by the people who work for him.”
Senators Lindsey Graham and John McCain are pushing back against the Obama administration’s promise to compensate contractors for legal fallout from WARN Act violations, a law requiring large companies to provide 60-day minimum notice of potential layoffs. As I wrote yesterday, the administration has urged contractors in advance of the Jan. 2 sequestration not to issue WARN notices, which would otherwise be sent just days before the presidential election. After contractors expressed concern about potential lawsuits, the OMB released a directive offering to pay for resulting legal penalties in certain situations.
Graham vowed that congress would block any attempt to reimburse contractors for WARN Act legal fallout in an interview with NRO’s Charles C.W. Cooke today:
Unless Congress acts before January 1, sequestration will kick in and the defense budget will be slashed some $50 billion across the board—the first stage of cutbacks which could total $1 trillion over the next decade. That is certain to have a severe impact not only on Defense Department employees, civilians, and military, but also on the defense contractors that produce the vehicles, aircraft, ships, missiles, ammunition, and everything else needed to equip the armed forces.
Under the 1989 WARN Act (Worker Adjustment and Retraining Notification) companies with more than 100 employees are obligated to give 60-days notice of mass layoffs and plant closings. Lockheed Martin threatened to send out those notices on November 2, four days before the election–and with many of them arriving in swing states such as Virginia. That would not be good for President Obama’s reelection chances so his Office of Management and Budget has alternatively bullied and bribed the defense contractors not to send out the layoff notices–the demands of the law notwithstanding.
It is already too late to reverse sequestration—the devastating hit of more than $500 billion in cuts that could afflict the Defense Department starting in January—before it has some impact on budgeting decisions being made by the government and its contractors. But it is not too late to engineer a deal that can stop the worst before it hits.
Accordingly, senators have been talking about what kind of deal they could come up with. Sen. Carl Levin, chairman of the Senate Armed Services Committee, told Politico: “I predict there will not be a sequester. One way or the other, since 90 percent of us don’t want it, it won’t happen. And my hope is that it won’t happen early enough to avoid any instability. What I am confident in is that it’s not going to happen because nobody around here wants it to happen except for some tea party folks.”
The hulking budget cuts now facing the Pentagon were initially pitched to Harry Reid by the White House, which saw them as a way to leverage a tax-increasing “grand bargain” from Republicans, according to Bob Woodward’s latest book. Politico reports:
The book The Price of Politics, by Washington Post Associate Editor Bob Woodward, makes it clear the idea for the draconian spending cuts originated in the White House – and not in Congress.
According to the book, excerpts of which were obtained by POLITICO ahead of the Sept. 11 release, President Barack Obama’s top deputies believed the prospect of massive defense cuts would compel Republicans to agree to a deficit-cutting grand bargain.
Then-OMB Director Jack Lew, now the White House chief of staff, and White House Legislative Affairs Director Rob Nabors pitched the idea to Senate Majority Leader Harry Reid (D-Nev.), Woodward writes. Under the deal, which Republicans accepted after several rounds of bargaining, the federal debt ceiling was raised — staving off a potential financial crisis.
The White House is required to release a report this week detailing how the sequestration cuts to defense actually will be executed. The outline — which will help shape 2013 budget and employment decisions for the Pentagon and defense industry — was initially supposed to be released today, according to multiple reports and the Bipartisan Policy Center. Of course, that would almost certainly have conflicted with Obama’s attempts to play up his national security record at the convention — so it’s no surprise it’s nowhere to be found on the OMB website this afternoon.
“On and off the Hill, many suspect the Obama Administration will quietly drop the sequestration transparency report on Friday in close-of-business ‘data dump’ with little fanfare, perhaps sending the report only to House and Senate leadership,” said Robert Zarate, policy director at the Foreign Policy Initiative. “But once the report gets to the Hill, you can expect lawmakers on both sides of the sequestration debate to start aggressively posturing and messaging.”
Sequestration—the $500 billion automatic budget cuts to Defense, which will be triggered if Congress cannot reduce the budget by $1.2 trillion as per the Budget Control Act of 2011—is a looming disaster. The sequestration cuts would be in addition to already scheduled budget cutbacks.
Owen Graham, a brilliant young scholar at the Heritage Foundation, has penned an important article in the Charlotte Observer outlining just what is at stake:
According to Defense Secretary Leon Panetta, sequestration would also eliminate a leg of the nuclear Triad, deliver a heavy blow to U.S. missile defenses, and eliminate next-generation fighter and bomber programs. The findings of the House Armed Services Committee were just as bleak: the smallest Air Force in its history; the smallest Navy since before World War I; and the smallest ground force since before World War II…
The reality is it is far from balanced. Military is less than one-fifth of the federal budget and absorbs fully 50 percent of the sequester. Meanwhile, 70 percent of entitlement spending, the key driver of the debt crisis, is exempt from the impact of the cuts.
The Obama administration is continuing to encourage employers to ignore the WARN Act, which would require them to inform employees before the presidential election that they may face layoffs due to sequestration. But a former counsel for the National Labor Relations Board and one of the crafters of the WARN Act is warning employers that they would open themselves up to worker lawsuits by ignoring the law. HuffPo reports:
But John Irving, a former National Labor Relations Board counsel who helped shape some provisions of the WARN Act, said he would tell major defense contractors to think twice about disregarding the WARN Act.
It is unlikely that the DOL guidance would hold up in court if a terminated worker sued his employer for not giving proper notice, Irving said.
In other words, defense contractors cannot fall back on the Department of Labor memo if the federal government lurches off the fiscal cliff and a laid-off employee had not received a pink slip by early November.
“It strikes me that the guidance is so far off the mark that you wonder why it’s being issued, and it’s not a regulation — it’s a sort of statement of opinion, which is coming out because of what could be the consequence,” Irving said. “It’s trying to blunt that and head it off in a way makes it look like no notice is not necessary when it may be.”