–Super Committee Failure Set To Trigger $1.2 Trillion Cuts Over Decade
–Key Lawmakers Says Additional Defense Cuts Would ‘Gut’ Military
–President Obama Threatens To Veto Efforts To Undo Sequestration

By John Shaw

WASHINGTON (MNI) – In addition to casting even greater doubts about
Congress’ ability to make necessary decisions on fiscal policy, the most
tangible consequence of the failure of last year’s Super Committee will
be to trigger $1.2 trillion in across-the-board spending cuts over the
next decade.

During the final weeks of the Super Committee’s deliberations,
House Speaker John Boehner said the across-the-board cuts would be a
“crude” instrument to secure deficit reduction, but added they were
specifically designed to be draconian to pressure the congressional
panel to find a more reasonable and balanced approach to cutting the
deficit.

In the aftermath of the Super Committee’s failure to reach an
agreement in late November, those across-the-board spending cuts are set
to begin to be implemented in January of 2013. About half the cuts will
come from defense programs and half from non-defense programs. All the
savings will come from the discretionary portion of the budget.

However, a number of lawmakers have warned the coming cuts would be
so punishing to the defense budget that they would imperil the nation’s
security.

The size of the cuts in defense spending required by the
sequestration process would be about $450 billion over the next decade.
They would come on the heels of nearly $490 billion in ten year savings
that were agreed to in last August’s debt ceiling agreement which
secured about a $1 trillion in overall savings.

House Armed Services Committee member Buck McKeon is seeking
support for a bill that would delay the immediate implementation of the
defense cuts by finding savings in another part of the federal budget.

Specifically, McKeon is proposing to get more than $125 billion in
savings by reducing the federal workforce by 10% over the coming decade
through attrition. He is proposing using these savings be used to delay
the implementation of the across-the-board cuts from 2013 to 2014.

So far, McKeon’s bill is being co-sponsored by about two dozen
members of the House, many of whom are members from his House Armed
Services Committee. House Republican leaders have not supported McKeon’s
bill so far.

McKeon argues that his bill is needed to prevent defense cuts that
would “devastate the armed forces and force us to break faith with
service members.”

Sen. John McCain, the ranking Republican on the Senate Armed
Services Committee, and Senate Minority Whip Jon Kyl, have also
indicated that they are exploring ways to avert deep defense cuts. They
have not yet introduced legislation on how this would be accomplished.

Defense Secretary Leon Panetta, a former House Budget Committee
Chairman and White House budget director, responded last November to a
letter from McCain about the consequences of additional defense cuts.

In his letter, Panetta warned that the two waves of defense cuts —
first from the August budget agreement and then the across-the-board
cuts triggered by the failure of the Super Committee — would force
major changes in the U.S. military.

Panetta said after the cuts were implemented the U.S. would have
“the smallest ground force since 1940, the smallest number of ships
since 1915 and the smallest Air force in its history.”

Bob Bixby, executive director of the Concord Coalition, said he
expects there will be many discussions to rearrange the spending cuts
called for by the sequestration that is set to begin in January of 2013.

“I would astonished if Congress doesn’t try to change the mix of
spending cuts. Certainly there will be efforts to rearrange how the cuts
are distributed,” Bixby said.

“I’ve long believed that it was a mistake to focus only on
discretionary savings to cut the deficit. So if Congress wants to change
the mix, I would like them to add entitlement savings and revenues. But
the bottom line is they must adhere to the bottom line. It would be
very, very dangerous to repeal the overall level of these cuts,” he
said.

The Pentagon’s base budget for the 2012 fiscal year is about $530
billion with an additional $118 billion allocated for overseas conflicts
in Iraq and Afghanistan.

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$,M$$CR$]