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Monday, December 22, 2014
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Published: Thursday, 1/10/2013

Pentagon authorizes steps including freezing civilian hiring

BLOOMBERG

The Pentagon has authorized senior managers to freeze civilian hiring, curtail travel and training, dismiss temporary workers, review contracts and cancel some weapons maintenance because of uncertainty over the budget.

“We have no idea what the hell’s going to happen,” Defense Secretary Leon Panetta said today at the Pentagon, in explaining the need to begin cost-cutting measures. “All told, this uncertainty, if left unresolved by the Congress, will seriously harm our military readiness.”

Steps outlined in a memo today by Deputy Defense Secretary Ashton Carter mark the first concrete actions the Pentagon is taking in response to automatic cuts, known as sequestration, that would require slicing about $45 billion from the defense budget this year if Congress and President Barack Obama fail to agree on an alternative deficit-reduction plan by March.

In addition to the threat of across-the-board cuts, the Defense Department is being squeezed by stopgap funding bills passed by Congress that froze spending at last year’s levels.

“Either of these problems, in isolation, would present serious budget execution challenges to the Department, negatively impacting readiness and resulting in other undesirable outcomes,” Carter said in the memo.

While authorizing steps to save money, Carter also called for caution, saying, “Any actions taken must be reversible at a later date in the event that Congress acts to remove the risks.”

He said any cancellations of maintenance for ships, aviation and ground vehicles should wait until at least Feb. 15, a delay that give Congress an additional month to resolve funding disputes.

Contract Approval

Carter also made it harder to get research and development and production contracts approved quickly. Any such contracts valued at more than $500 million will require approval from the undersecretary of defense for acquisitions -- the top Pentagon weapons buyer -- before they can be awarded, according to the memo.

To prepare for the possibility of sequestration in March, Carter directed managers to begin “intensified planning” to reduce civilian workforce costs by laying off temporary workers, imposing hiring freezes, authorizing buyouts, and considering furloughs for as long as 30 calendar days.

“This planning does not assume these unfortunate events will occur, only that we must be ready,” Carter said.

Over the next decade, sequestration would force the Pentagon to cut about $500 billion from future spending.



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