“Let me make it clear that this uncertainty puts at risk our ability to effectively fulfil all of our missions,” said Chuck Hagel, the new defence secretary. “We will be forced to assume more risk, with steps that will progressively have far-reaching effects.”
For the Pentagon to make its required $46 billion in cuts, he said that four Navy air wings would gradually stop flying, the Air Force would immediately cut flying hours, the Army would reduce training and nearly all the department’s 800,000 civilian workers would be required to take unpaid leave.
But Republicans argued that the Obama administration was playing politics with national security by deliberately targeting high-profile projects, such as aircraft carrier deployments, rather than cutting wasteful spending elsewhere.
The president was obliged by law to sign an order late on Friday slicing $85 billion from the budgets of government agencies by the end of the federal financial year on Sept 30 – in what is known in accounting terms as sequestration.
There will be mandatory cuts over the next decade totalling $1.2 trillion if squabbling Republican and Democrat congressional leaders cannot agree on ways to reduce America’s $16 trillion national debt.
The fiscal gridlock threatens to curb Mr Obama’s hopes for an ambitious second term agenda, including reforms of the immigration system and gun control, as the budget battle will consume much of the time and energy of the president and congress and deepen the partisan splits in Washington.
It may also put at risk the spluttering global economic recovery, the International Monetary Fund has warned. “What it means is that we are going to have to re-evaluate our growth forecasts for the United States and other forecasts,” said an IMF spokesman.
Mr Obama has claimed that the cuts could cost 750,000 jobs and slow already anaemic US economic growth by 0.5 per cent. But those figures are dismissed as alarmist scare tactics by Republicans, who are scornful that the federal government cannot absorb cuts that amount to just 2.4 per cent of the $3.55 trillion federal budget.
“The president is ready to make it bite as hard as possible – all to send a simple message to the public: ‘You want to control Washington spending, America? Fine, let me show you how much I can make it hurt’,” said Mitch McConnell, minority Republican leader in the Senate.
Most immediately, government agencies will this week start sending out “furlough” letters to hundreds of thousands of employees giving them notice that they will be forced to take unpaid leave, typically one day per week, from April.
One of the first visible effects is likely to be at airports as air traffic controllers staffing levels are cut — longer delays are being predicted at larger locations and some smaller ones will close. The Federal Aviation Authority is expected to announce that it plans to close 168 contractor-staffed air traffic control towers on April 1 and another 21 towers by Sept. 30.
But it is the defence budget that is taking the biggest hit. “The Army will curtail training for all units except those deploying to Afghanistan, adversely impacting nearly 80 percent of Army operational units,” Mr Hagel said.
Most sensitive are changed plans for the deployment of Naval assets. Military chiefs had asked for two of their 10 aircraft carriers to be assigned to the Persian Gulf at a time of increased tensions with Iran over its nuclear programme, but the Pentagon has now decided that for budgetary reasons it can only afford to deploy one there at a time.
That leaves the Truman at home for now, while maintenance work on another docked carrier, the USS Abraham Lincoln, has also been delayed by the crisis.
With the impact being closely monitored by Britain and its other allies abroad, Mr Hagel vowed to preserve US military effectiveness. “We will do what we need to do to assure the capabilities of our forces,” he said.
But other defence officials have sounded dire warnings about the impact of the cuts. The Pentagon budget faces a total reduction in spending of nearly $500 billion over 10 years if the full $1.2 trillion cuts in federal expenditure are implemented over that period.
In an appeal for action to the President and Congress, more than 40 prominent former Republican officials and national security leaders recently said that sequestration “will result in unacceptable risk for US national security”.
In an open letter from the conservative Foreign Policy Initiative, they wrote: “It will degrade our ability to defend our allies, deter aggression, and promote and protect American economic interests. It will erode the credibility of our treaty commitments abroad. It will be a self-inflicted wound to American strength and leadership in the world.”
Ashton Carter, the deputy defence secretary, said the spending reductions would have a rolling impact, beginning slowly but increasing as the weeks pass.
“Those who do not appreciate how serious this is, as the year goes on, it will be unmistakable,” he told the briefing. “This is not subtle. This is an abrupt serious curbing of activity in each and every one of our key categories of activity in the Department of Defense.”
British diplomatic sources said they remained “sanguine” about the sequester cuts as a whole, but were conscious of the potential impact on UK defence contractors as the Pentagon throttled back on maintenance and upgrade projects. “It is something we are monitoring,” the source said.
America’s biggest defense contractor, Lockheed Martin, also expressed concern. “Any significant delay in funding for any production program could threaten the stability of our supply chains, increase costs, prolong delivery schedules and ultimately weaken our national security posture,” the company said in a statement.
Republican congressmen on the Armed Services Committee blamed the Obama administration for the failure to reach a deal to avoid the cuts. “It is unconscionable for this president to use our military families as pawns in his crusade for higher taxes,” said Martha Roby, an Alabama congresswoman.
The White House has laid out a long litany of hardships and risk which it claims that the sequestration cuts will inflict across the country.
These include children being sent home because teachers’ aides are being laid off; weaker security at the frontier because customs and border agents are being sent home; reduced opening hours for national parks; fewer meat inspectors; and reductions in breast and cervical cancer screenings for low income women; cuts to farm subsidies and long-term unemployment benefits.
In a report on the likely impact of sequestration, the Obama administration’s Office of Management and Budget said there was “no question that the sequestration would be deeply destructive to national security, domestic investments, and core government functions”.
The Republicans in turn counter that the administration is deliberately selecting politically sensitive projects rather that cutting government waste and unnecessary programmes to tackle the burgeoning debt and deficit.
Mr Obama and his fellow Democrats are calling for a “balanced” approach to reduce the debt by cutting spending and raising tax revenue by closing loopholes and ending some allowances.
But Republicans, who control the House of Representatives, are adamantly opposed to any tax increase after grudgingly conceding that rates on high-earners be allowed to rise during America’s last budgetary crisis — the so-called “fiscal cliff” battle over New Year.
“The discussion about revenue, in my view, is over. It’s about taking on the spending problem,” said John Boehner, the Republican House leader, after leaving talks at the White House.
Just hours after across-the-board spending cuts officially took effect, Mr Obama pressed Congress to work with him on a compromise.
“These cuts are not smart,” the president said in his weekly radio and internet address. “They will hurt our economy and cost us jobs. And Congress can turn them off at any time – as soon as both sides are willing to compromise.”
“None of this is necessary. It’s happening because Republicans in Congress chose this outcome over closing a single wasteful tax loophole that helps reduce the deficit.”
Even as he cast blame at the Republicans, he urged them to work with Democrats on a deal, saying Americans were weary of seeing Washington “careen from one manufactured crisis to another”.
But with the president delivering partisan rhetoric rather than offering any new ideas to resolve the stand-off, there was no sign of fresh negotiations as both sides dug into already entrenched positions.
US carrier in front line of Obama’s battle with Congress over $85 billion … – Telegraph.co.uk
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