Panetta Warns of 'Disaster' from Defense Cuts

Defense Secretary Leon Panetta said Wednesday that automatic, across-the-board defense cuts would be a disaster, with widespread jobs losses and problems for the Pentagon as it tries to pay for health care for military personnel.

The Pentagon chief and Army Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, painted a bleak picture of the military if Congress fails to come up with a budget plan that stops the cuts to defense and domestic programs that kick in Jan. 2. They appealed to Republicans and Democrats on the Senate Appropriations defense subcommittee to come up with a solution.

Dempsey said the billions for warfighters in Afghanistan would be subject to the cuts. To avoid that drastic step, the Pentagon would look to offset the cuts with reductions in other accounts, he said. Defense comptroller Robert Hale said the president could exempt military personnel from the cuts, but the reductions would affect the department's ability to pay for health care.

Panetta said the automatic cuts "was designed as a meat axe, it was designed as a disaster. ... It would be a disaster."

President Barack Obama and congressional Republicans agreed last summer on a $492 billion reduction in projected defense spending over 10 years. In a deficit-driven step, the budget agreement established a special bipartisan congressional committee to come up with $1.2 trillion in spending cuts. The failure of that committee set in motion the automatic cuts — known as sequestration — that would slash domestic and defense by $1.2 trillion over a decade.

Republicans and Democrats have struggled to come up with a budget to avert the cuts, and an answer may not emerge until after the November election in a lame-duck session. That could prove too late as the fiscal year begins Oct. 1.

Sen. Daniel Inouye, D-Hawaii, chairman of the subcommittee, asked whether the automatic cuts could mean a 1 percent spike in the national unemployment rate, which now stands at 8.2 percent as the economy struggles to recover.

Panetta said he was aware of that estimate. "The Defense Department is not a jobs program, but clearly that kind of sequestration across the board" affects not only service members but contractors, Panetta said.

Panetta criticized the first round of changes that lawmakers have made in Obama's proposed military budget for next year. He said the versions of the defense budget that have emerged from the House and the Senate Armed Services Committee would force him to find money to maintain old weapons, aircraft and ships. He said that step would result in a hollowing out of the force.

He appealed to members of the Senate Appropriations Committee to follow the Defense Department's budget recommendations as it crafts a spending plan for the fiscal year beginning Oct. 1.