Defense Prepares Sequester Scenarios

The Defense Department has prepared several scenarios for automatic budget cuts slated to take effect in January 2013.

Federal Times reported on Tuesday that Defense Secretary Leon Panetta told a group of defense industry chief executive officers and high-level department policymakers during a closed door meeting on July 23 that the Pentagon had outlined four scenarios for the planned budget cuts.

Under the first scenario, Congress does not act and the across-the-board cuts known as sequestration happen. The second possibility is that the post-election lame-duck Congress agrees to a plan to avert sequestration. Under the third scenario, Congress comes up with $1.2 trillion in cuts to avert Defense sequestration. And the final scenario is that Congress creates a plan to delay the sequestration debate for another year.

The six-month budget deal announced by congressional leaders on Tuesday will guarantee the department’s funding through March 2013. But the agreement does not address longer-term issues.

A source told Federal Times that many at the Pentagon doubt a long-term, deficit-reducing alternative to sequestration can be found, something that also is concerning defense industry officials. They noted, however, that Panetta was working more than other department heads to alert senior government officials to the disastrous effects sequester could have.

“Panetta is right now the only Cabinet official that is doing anything to try to ward off what is going to be a total disaster for all industries, not just the defense industry,” an industry official told Federal Times.

Defense officials have been arguing that a plan has not been set and won’t be until the Office of Management and Budget issues directives. A bill passed in the House last week would force the White House to disclose additional details regarding the upcoming cuts.