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Pentagon urges delay in "devastating" $46 billion budget cuts

By David Alexander and Phil Stewart

WASHINGTON (Reuters) - The Pentagon's civilian and military leaders warned in dire terms on Tuesday that $46 billion in budget cuts due to go into effect in two weeks would erode the nation's ability to go to war and appealed to Congress to delay the reductions.

The automatic, across-the-board cuts will force the Pentagon to put most of its 800,000 civilian employees on unpaid leave for 22 days, slash ship and aircraft maintenance and curtail training, Deputy Defense Secretary Ashton Carter told the Senate Armed Services Committee.

"These devastating events are no longer distant problems. The wolf is at the door," Carter said as he and the military chiefs appealed for Congress to take action to delay the cuts known as sequestration from taking effect beginning March 1.

For months, Pentagon officials have been painting a doomsday scenario if Congress does not come up with a replacement for the sequester. The cuts are already law, but when Congress enacted them in August 2011, lawmakers never intended for them to happen. The thinking was that they would be so abhorrent that Democrats and Republicans would come up with an alternative budget-cutting plan.

But no plan has emerged, leading defense officials to recently ratchet up their rhetoric about the dangerous consequences of the cuts, although some skeptics doubt that the impact would be as dramatic as described.

Army General Martin Dempsey, the chairman of the Joint Chiefs of Staff, said on a scale from one to 10, with one being the least dangerous and 10 being the most, the budget situation "sure feels like a 10."

Asked by Republican Senator Lindsey Graham of South Carolina whether he or the other military chiefs had considered resigning in protest, Dempsey said they were not trained to walk away from a crisis.

"I will tell you personally, if ever the force is so degraded and so unready and then we're asked to use it, it would be immoral to use the force unless it's well-trained, well-led and well-equipped," Dempsey said.

"Are we on the path to creating that dilemma?" Graham asked.

"We are on that path," Dempsey replied.

However, Mattea Kramer, research director for the National Priorities Project, a Massachusetts research organization that focuses on the U.S. budget, said she did not think the cuts would be as devastating as described.

"We are not of the opinion that American security will be deeply compromised here," Kramer said in an interview. "I do think that it's true that sequestration is a bad instrument for going about cutting budgets and that DOD officials absolutely will be pulling out their hair."

She also noted, "There is waste, there are obsolete programs to be sunset, there is Cold War technology that we need not be investing in any longer."

FOREIGN POLICY RISKS

Underlining the risks facing the United States, the hearing took place just hours after North Korea's third nuclear test - something Defense Secretary Leon Panetta told Pentagon employees represented a "serious threat" to America.

Tensions with Iran over its nuclear program are also simmering, and General Mark Welsh, chief of staff of the Air Force, acknowledged future cuts could make it more difficult for the U.S. military to wage a preventive strike, if necessary.

"Our kick-in-the-door capability would be impacted," Welsh said.

Officials said the military faced a crisis of readiness by the end of the year not only because of the looming $46 billion in cuts but also because of Congress' failure to appropriate defense funding for the 2013 fiscal year. The impact would worsen over the decade if cuts continued at the same pace, they said.

The Pentagon, which is five months into the 2013 fiscal year, is currently funded under a continuing resolution that set spending at 2012 levels. While the funding is approximately the same, the money is in the wrong accounts and can't be moved.

Carter told lawmakers that as a result of the converging financial problems, the Pentagon faced a $35 billion shortfall in its operations and maintenance accounts that it would have to make up in the remaining seven months of the fiscal year.

"In the near-term, these reductions would create an immediate crisis in military readiness," Carter said.

Admiral Mark Ferguson, vice chief of naval operations, said the budget issues would impair work on three aircraft carriers, forcing a delay in the construction of the USS John F Kennedy, a delay in the planned overhaul of the USS Abraham Lincoln and a delay in completing the overhaul of the USS Theodore Roosevelt.

Carter said if the $46 billion in budget cuts take place as currently required on March 1, the department would have to:

- Put most of its 800,000 civilian employees on unpaid leave for one day a week for 22 weeks, a move that would save between $4 billion and $5 billion. The affected civilians include shipyard and other maintenance workers;

- Curtail Army training and maintenance for units that are not scheduled to deploy to Afghanistan, a move that would leave about two-thirds of active duty units operating at reduced readiness;

- Cut Air Force flying hours sharply and reduce weapons system maintenance funding by about 30 percent, leaving most flying units below readiness standards by the end of the fiscal year;

- Reduce Navy and Marine Corps fleet operations, including reducing ship and aircraft operations in the Asia-Pacific region by about a third;

- Cancel Navy ship and aircraft maintenance work in the third and fourth quarters, affecting about 25 ships and 470 aircraft.

"Sequestration will result in the loss of at least an additional 100,000 personnel from the active Army, the Army National Guard and the U.S. Army Reserve," said General Ray Odierno, the Army chief of staff. "Combined with previous cuts, this will result in a total reduction of at least 189,000 personnel from the force - if not more."

The Pentagon would have to cut its spending on developing weapons and other systems - about 2,500 investment line items - by about 9 percent per program, a move Carter said would "disrupt programs, add to unit costs and damage the defense industry."

The action would hurt subcontractors, many of them small businesses that do not have the capital structure to withstand the turmoil and uncertainty, he said.

(Additional reporting by Jim Wolf and Susan Cornwell; Editing by David Storey and Cynthia Osterman)

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