–House Passes Bill To Require Admin To Spell Out Effects of Cuts
–House Armed Services Chief Warns of ‘Chaotic and Uncertain’ Situation

By John Shaw

WASHINGTON (MNI) – Congressional concern about the consequences of
across-the-board spending cuts that are set to be triggered in January
next year are growing by the day, but the solution to avoid these cuts
seems as elusive as ever.

The House voted Wednesday, 414 to 2, to require the administration
to spell out the consequences of the scheduled $110 billion in spending
cuts that are set for the 2013 fiscal year.

House Budget Committee Chairman Paul Ryan said the legislation is
needed to compel the administration to provide a “full and complete
picture” about the impact of the sequestration process on specific
government programs.

Earlier in the day, the House Armed Services Committee held a
hearing with officials from the defense industry to learn about how they
expect the coming defense cuts to effect their industry.

The chairman of the House Armed Services Committee, Rep. Buck
McKeon, said the coming defense spending cuts are causing turmoil.

“This impasse, and lack of a clear way forward, has created a
chaotic and uncertain budget environment for industry and defense
planners,” he said.

“While the cuts are scheduled for implementation January 2nd,
companies are required to assess and plan according to the law — and
sequestration is the law right now,” he said.

Of the $110 billion in scheduled spending cuts in FY’13, $55
billion would come from defense. Over the full decade, the sequestration
process calls for about $500 billion in defense cuts and about the same
amount from domestic discretionary programs.

During the House Armed Services hearing, Rep. Adam Smith, the top
Democrat on the panel, articulated the Democratic view that
sequestration can only be replaced by a “balanced” mix of spending cuts
and tax increases.

“Revenues need to be increased, mandatory programs need to be
brought in line with what we can afford over the long-term and domestic
spending should be carefully examined to find real and substantial
savings over time,” Smith said.

The panel heard from leaders of major defense contractors: Lockheed
Martin, European Aeronautic Defence and Space, Pratt and Whitney, and
Williams-Pyro.

All the witnesses said that the sequestration process would cause
the loss of many thousands of jobs in the defense sector.

** MNI Washington Bureau: (202) 371-2121 **

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