Sequester fight continues as details emerge and SecDef Amps up rhetoric.

AuthorFarrell, Lawrence P., Jr.
PositionPresident's Perspective

As the potential impact of sequestration begins to settle in--and details of its impact begin to emerge--Defense Secretary Leon Panetta is elevating his rhetoric.

In little more than a month, details have surfaced that put substance to industry worries about the effects of sequester on defense. Last month, for instance, Sen. Carl Levin, D-Mich., chairman of the Senate Armed Services Committee, rolled out a suggestion for an additional $10 billion-per-year cut to the defense budget as the price to avoid sequester. Since then, no further elaboration has been made on that proposal. And a stream of opinions continues in the news media about sequester possibly not being as bad as advertised.

An Aug. 1 hearing of the House Armed Services Committee revealed a bleak picture. It looks as if about $22 billion of the sequester cut of $54 billion for fiscal year 2013 will come from operations and maintenance accounts. About $21 billion of the reductions will be from investments in new weapons systems and technology. These calculations come after President Obama elected to exempt personnel accounts from sequestration. That means the cuts fall on only $460 billion, rather than the $615 billion in the 2013 budget.

The Army, with an O&M budget of $65 billion, will be absorbing most of the cuts. The Air Force and Navy each spend about $45 billion on O&M. When one considers that 60 to 70 percent of O&M funding goes to operational forces training and equipment repair, that constitutes a huge hit on troops presently engaged in war, which should be unacceptable.

On the investment side, the Army starts out with a smaller account than either the Air Force or Navy, so even a smaller percentage cut still makes a small investment account even smaller. Army procurements are being slowed for many reasons, so sequester begins to impact before it is triggered. Any programs being paid for by foreign military sales will likely continue, but cuts to domestic programs in the same area will drive inefficiencies for all. It also looks like big hits could he coming for information systems procurements.

The application of the WARN Act (Worker Adjustment and Retraining Notification), which requires advance notifications to employees of probable layoffs, is now in question following a Department of Labor memo that says notices are not required under the current scenario. Some defense firms have been planning to abide by the act's requirement to warn 60 days ahead of possible...

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