effect at midnight on March 1. The Pentagon has repeatedly warned that it can’t
absorb the sequestration cuts without profound effects, especially on
—John A. Tirpak
here for the PDF version of the article.
March 1, 2013—After more than a year of
resisting preparations for a possible budget sequestration in 2013—certain
Congress would never allow such a destructive hit on the nation’s military—then-Defense
Secretary Leon E. Panetta in January reluctantly ordered the services to hunker
down and hoard cash. The move was intended to blunt—however minimally—the
effects of what he called a “perfect storm of budget uncertainty.”
Speaking with reporters
in the Pentagon on Jan. 10, Panetta admitted that “we have no idea what the
hell’s going to happen” with regard to military budgets in this and future
fiscal years, making it impossible to plan and wickedly hard to manage defense
spending. During the press conference and subsequent media interviews, he
pleaded for action that would avert severe harm to military readiness,
personnel, and investment.
However, forced to
confront the growing likelihood that Congress wouldn’t act to prevent what he
called arbitrary, “meat-axe” cuts across operating and investment accounts,
Panetta ordered the services to stop or slow spending money on a range of
things—from sailing and flying hours to property maintenance to travel.
Jan. 7 memo to Panetta, Air Force Secretary Michael B. Donley and Chief of
Staff Gen. Mark A. Welsh III proposed 10 “near term actions” they would take to
prepare for the sequester. These included a civilian hiring freeze; warning
current employees of a possible furlough; canceling travel, air shows, and conferences;
curtailing or canceling any studies either not critical or mandated by
Congress; halting the purchase of furniture and replacement information
technology gear; deferring facilities maintenance by half; shortening contracts
to cover only Fiscal 2013; and either halting or delaying contracts.
top USAF leaders also said they’d “review overseas contingency operation
requirements”—war spending needs not covered in the base budget—and “identify
potential deferments” among them.
actions would “only achieve a small share of the total sequestration
reduction,” Donley and Welsh said, meaning they would have to raid readiness
and investment accounts to find the rest of the money.
Just Some of the Pain
If Congress didn’t
act before the deadline, they described how USAF would be hurt. The pain would
• A 17 percent cut in depot maintenance and aircraft engine overhauls, “pushing
aircraft availability and mission capable rates much further below standards.”
• An 18 percent reduction of flying hours, potentially resulting in a “flying
stand-down from late July through September and driving nearly all flying units
to unacceptable readiness levels” by October.
• Civilian furloughs without being able to apply the usual reduction-in-force
procedures, across the Active Duty, Guard, and Reserve.
Overall, sequestration would have “immediate and devastating impacts to [the]
readiness” of the Air Force, Donley and Welsh wrote, especially since they have
limited ability to reduce pay and benefits, and because the reductions would
have to yield savings so fast.
Longer-term damage to the Air Force would be significant, the two top leaders
wrote. While the new national strategy demands “a high state of readiness,” it
cannot be executed with tiered readiness, they said.
“The flying hour reductions would compel us to focus almost exclusively on
current missions such as training pipelines” and spin-up of units headed to
Afghanistan and other deployments “while sacrificing preparedness for
contingencies” and major war plans, including the nuclear deterrence mission.
As a result, the 18 percent reduction would be “disproportionately applied
across the force,” compelling the flying stand-downs and pushing units Air
Force-wide to “the lowest readiness levels” and requiring “extensive time and
funding to recover.”
However, Air Combat Command chief Gen. G. Michael Hostage said on Feb. 21 that
ACC will move toward tiered readiness. Units returning from Afghanistan will
simply have to stand down, he said, in order to keep at least some portion of
the force combat capable.
would impose a backlog on depot maintenance, and the 50-50 ratio of
contractor-to-organic maintenance work mandated by Congress itself “will be at
risk,” Donley and Welsh said.
The civilian furloughs and hiring freezes would “drive nearly immediate
capability gaps in all critical skill sets and have a direct impact on unit
readiness, military productivity, morale, and quality of life,” the two USAF
leaders said. The paucity of funds for facility maintenance would affect “new
mission beddowns, range upgrades, runway repairs, energy initiatives, and drive
substantial costs in the future.”
given that priority would have to go to maintaining forces in combat at the
expense of all other things, Donley and Welsh warned that sequestration would
deliver “a protracted disruptive effect” on modernization programs.
Specifically, it would cause “canceled or delayed delivery of modernization
capability which is already under-capitalized to meet the new defense
in a Pentagon press conference with Welsh, was asked if the Air Force, already
shrinking in order to maintain a ready force, would have to get smaller to
continue presenting forces that are not hollow to regional commanders.
there are questions about how much smaller the Air Force can go in some of
these areas without impacting the capability we provide to the joint and the
coalition teams,” he answered. Donley had recently penned a multipart essay for
AOL.com in which he argued that the Air Force could no longer do all the
missions expected of it if its staffing and modernization needs were not met.
The service’s equipment and people, he said, can’t be in two places at the same
‘supply’ of forces is equal to the strategic ‘demand’ with almost no margin in
capacity,” Donley wrote in one of the essays.
Air Force has very few options for further reductions in force structure
without incurring significant risk to the capabilities we provide to joint and
Defense Secretary Ashton B. Carter, speaking to the House Armed Services
Committee on Feb. 13, said that if the full sequester took hold on March 1, it
would constitute “an inability to execute our strategy.”
intended to coerce Republicans to reach a deal on deficit reductions, the
defense cuts no longer seemed to be much of a stick by late January.
Paul Ryan (R-Wis.), head of the House Budget Committee and his party’s vice
presidential nominee last fall, said on the NBC talk show “Meet the Press” in
late January that “I think the sequester is going to happen.”
feel the sequester may be the only way to get the spending cuts they demand,
think these sequesters will happen because the Democrats have opposed our
efforts to replace those cuts with others and they’ve offered no alternatives,”
are more than happy to keep spending at those [Fiscal 2012] levels going on
into the future while we debate how to balance the budget, how to grow the
economy, how to create economic opportunity,” Ryan said.
Speaker Rep. John Boehner (R-Ohio) said that his party had largely come to
accept the defense cuts as the only way to get spending reductions without also
having to increase taxes.
however, speaking a week after Ryan on the same program, said if Congress
“stands back and allows sequester to take place, I think it would really be a
shameful and irresponsible act.” The cuts would “badly damage the readiness of
the United States of America. ... We are going to weaken the United States. And
make it much more difficult for us to respond to the crises in the world.”
added, “In a world of responsible politics, it should not happen.”
Armed Services Committee Chairman Howard P. McKeon (R-Calif.) told reporters in
Washington on Feb. 15 he believed the sequester would be allowed to kick in,
saying, “I think we’ve locked ourselves into positions we can’t seem to get
away from. I think we’ll be forced into it.” He offered some hope that after
“about a month,” the pain of sequester would be felt so deeply by the country
that it might provide sufficient pressure to compel Congress to act.
Three-Quarters of a Million
800,000 civilian employees around the country could be furloughed for as long
as 22 days, in effect a potential 20 percent cut in salary, said Panetta during
a Feb. 6 speech to students at Georgetown University. A hiring freeze already
was applied. Only units now or soon to be in combat would be spared, meaning
other units would be hurt even more.
of what Congress does or fails to do, we still have an obligation to protect
this country,” Panetta asserted in January. That’s why “the leadership of this
department has decided that it must begin to take steps in the coming weeks
that would reduce the potential damage.”
Defense Department, he said, “we really have no choice but to prepare for the
main factors were in play: a postponement of the governmentwide sequestration
until March 1; uncertainty as to whether DOD would actually get an enacted 2013
budget or operate under another continuing resolution at 2012 spending levels;
and a political crisis, also coming to a head in March, as to whether Congress
would allow an increase in the federal debt ceiling.
Jan. 31, Congress voted to delay the debt ceiling showdown until late this
summer. The action didn’t grant an increase in the $16.4 trillion national debt
limit, but effectively allows the Treasury to ignore the ceiling until May 19,
at which time it must resort to unnamed “extraordinary measures” to pay the
nation’s bills. Reconsideration of the limit will come in August.
was to be the painful enforcement penalty—the “stick”—in the 2011 Budget
Control Act that also mandated some $487 billion of defense spending cuts. It
was meant to be the unbearable consequence if Congress couldn’t agree on an
overarching federal deficit reduction plan beyond those reductions. Failure to
make a deal would trigger cuts to defense and social programs alike by more
than a trillion dollars over a 10-year period, and do so with a simple, rough
10 percent cut to all accounts, without the flexibility to choose priorities.
Defense cuts were the stick to get Republicans to deal, while social programs
were to be the stick for Democrats.
a temporary agreement was reached on Jan. 1, all it did was delay sequestration
until March 1, Panetta noted. That made the effect even worse.
unfortunate thing is that ... the sequester threat was not removed,” he said.
If allowed to take place in March, the sequester would compel the Pentagon to
reduce spending 20 percent in Fiscal 2013—but compress those cuts into just the
last six months of the fiscal year. By any measure, the reductions would be draconian.
ordered the services to immediately curtail maintenance of facilities deemed
nonmission-critical; delay certain contract awards; and scrutinize all other
operating expenses to defer any spending not directly related to the
Afghanistan war effort.
also ordered the services to develop plans for how they would cope with
sequestration, if it happened. The planning was necessary, he said, because
“there will be so little time to respond” to a sequestration. “I mean, we’re
almost halfway through the fiscal year,” he said.
measures he ordered, Panetta said, “must be reversible to the extent feasible
and must minimize harmful effects on readiness.” He emphasized, however, that
“no amount of planning ... can fully offset the harm that would result from
sequestration, if that happens.”
told reporters in January that the Pentagon already had begun laying off some
of its 46,000 temporary and contract workers, all of whom, he said, are “now
subject to release.” Carter said it is essential DOD slow its spending or funds
“burn rate.” He also said the 800,000 or so civilian employees of DOD would
likely have to take one unpaid day off in five, starting in April, if the
sequester were to kick in. Asking the employees to suffer a 20 percent pay cut
is “unfair and unreasonable” but unavoidable, Carter said in a Pentagon press
this is a terrible thing to have to do to our employees and to the mission,” he
said. However, the move will save $5 billion and “we have to find that money.”
emphasized that the pain will not just involve inside-the-beltway contractors
and consultants but employees nationwide.
hope the Congress understands it’s going to affect each and every state and
district,” he said.
Force officials developing an assessment of the impact of sequestration bore
out Carter’s assertion. The worst hurt states—due to Air Force austerity
alone—would be Oklahoma, Texas, Georgia, and Ohio, which because of
civilian-intensive logistics center or program management work, would all see
payroll hits well in excess of $110 million. Deferred military construction
contracts nationwide—again, for the Air Force alone—would exceed the
half-billion dollar mark, hitting local construction hard even as the nation
struggles to get the industry back on its feet.
in his Feb. 13 HASC testimony, also pointed out that “the impact will be even
greater on our contractors” than expected, because “between 60 cents and 70
cents of every dollar we contract is subcontracted to the tier below the prime
contractors. Many of these smaller companies don’t have the capital structure
that will allow them to withstand this uncertainty and turmoil. ... Many of
them are small businesses.”
Aerospace Industries Association in February rereleased a study it sponsored
indicating that sequestration would claim 2.1 million jobs in the US and raise
the national unemployment rate by 1.5 percent.
in the same hearing as Carter, said sequestration would mean “roughly
two-thirds of our Active Duty combat Air Force units will curtail home station
training beginning in March and will drop below acceptable readiness levels by
mid-May. And most, if not all, will be completely nonmission-capable by July.”
The sequester would mean postponing depot maintenance on “about 150 aircraft
and 85 engines, ... which creates a backlog that will keep ‘giving’ for years,”
A Pervasive Crisis in Readiness
will have an almost immediate effect on our ability to respond to multiple
concurrent operations around the globe,” Welsh continued, “something that we’ve
been asked to do ... many times in the past.” Acquisition program effects will
create delays and inefficiencies that will “raise unit costs, and they’ll delay
delivery of validated capabilities to warfighters in the field.”
said the Air Force is “long overdue for reconstitution following more than two
decades of war.” The service finds itself “stuck in the unenviable trade space
between readiness and modernization, and we need your help to get out.”
of the Pentagon leaders mentioned another, potentially huge cost of
sequestration: the effect of breaking defense contracts. Practically every
Pentagon contract provides some form of compensation to a vendor if the program
is terminated early or significantly changed. These costs could run to the
billions, dramatically reducing any “savings” to be obtained by imposing
sequestration. Broadly, the Defense Department has moved to scrutinize all
early January memo from Carter to all DOD departments directed the services to
get clearance from the Undersecretary for Acquisition, Technology, and
Logistics Frank Kendall III before incurring any obligations greater than $500
million. In a follow-up memo, Kendall specified that the services have to
explain the broad anticipated value of any such obligations.
prevent branches from awarding contracts just under the threshold, the timing
of funding, the purpose of the program, and compelling reasons why it can’t be
delayed also must be included in the explanation.
Force Undersecretary Jamie M. Morin, in a Feb. 7 meeting with reporters to
discuss how USAF would be affected by sequestration, said numerous procurement
programs would feel the bite. The KC-46 tanker project would probably have to
be renegotiated, Morin said, and the potential cost to the service—possibly
more than $1 billion—would be a “significant” percentage of the sequester all
by itself. Morin also said at least two F-35s would have to be cut from the next
production lot, dropping the quantity from 19 to 17. The Air Force had put
extra money into F-35 software to maintain momentum, but that would also
evaporate, Morin said. Two Space Based Infrared Systems would have to be
deferred, and Morin also said the C-5M re-engining project would be imperiled.
Force leaders said they would try to protect the KC-46, F-35, and Long-Range
Strike Bomber from cuts, but Morin said all major programs “will face
disruption,” which usually translates to “increased cost to the taxpayer.”
what the overall expense of termination fees would be, Morin said there’s “no
way” that could be calculated until the sequester happens, but it would be a
from the Army and Navy Chiefs, similar to Donley and Welsh’s, circulated in
late January, describing harsh reductions in the deployed naval fleet,
reductions in training time, and greater demands on service members in the wake
of sequestration. Chief of Naval Operations Adm. Jonathan W. Greenert, for
example, detailed steps such as cutting travel, reducing exercises, and a
civilian hiring freeze. But he also warned that, because refit of ships could
be delayed quite some time, the ships now preparing to put out to sea could be
“extended indefinitely” on their cruises, because there wouldn’t be a relief
ship available in a timely manner.
Adm. William E. Gortney, commander of Fleet Forces Command, said some ships may
tie up at a pier and simply not deploy at all, and Navy air wings may simply
shut down. Specifically, one effect would be the reduction of two carriers
stationed in the Persian Gulf to just one—a direct impact on an area of
critical interest to the US. Sailor and family support programs also would be
Chief of Staff Gen. Raymond T. Odierno, speaking in late January at an
Association of the US Army event, said sequestration would take a “$6
billion-plus bite” from the Army right away, and a continuing resolution would
eat another $6 billion, chiefly out of operations and maintenance.
Army already is facing about a $5 billion to $7 billion “shortfall” in its
overseas contingency operations account for Fiscal 2013, he said. Acquisition
programs facing hits would be the CH-47 helicopter and the new Ground Combat
Vehicle programs; funding to run Army bases could take a 30 percent hit, he
sequestration, continuing resolution, and other fiscal calamities are creating
“a pervasive crisis in readiness,” Carter said.
uncertainty about defense spending was already beginning to affect the national
economy in 2012. In January, the Federal Reserve reported the economy
contracted at an annual rate of a tenth of a percent in the last quarter of
calendar 2012. White House press secretary Jay Carney said, “The GDP number ... was driven ... in large part by a
sharp decrease in defense spending—the sharpest drop since, I think, 1972. And
at least some of that has to do with the uncertainty created by the prospect of
in the Feb. 13 hearing about the sequester, opened the session by saying, “We
meet this morning at the 11th hour” and noted that the witnesses—comprising
Carter, DOD comptroller Robert F. Hale, and all the Joint Chiefs of Staff—was
an “unprecedented” assemblage during his tenure.
it appears that this self-inflicted wound is poised to cripple our military
forces in just a few days,” McKeon said. He acknowledged a letter from the
Joint Chiefs saying, “We are on the brink of creating a hollow force,” and said
neither Congress nor the White House comes to the debt crisis “with clean
hands.” It was “decades in the making.”
said his fear is that “many may choose to soften the blow of these choices by
turning once again to the Department of Defense,” which he noted had already
given up $487 billion in budget reductions. He said he would support no
spending plan “regardless of how it addresses entitlement spending or revenue,
unless it also offers meaningful and real relief for the DOD from [the]
The next Daily Report will be Tuesday, Feb. 19, due to the Presidents Day holiday.
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