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Political Firestorm Flares As Looming Budget Cuts Include Defense Reductions

August 3, 2012 at 12:00 AM EDT
Should Congress fail to pass a deficit reduction plan by the end of the year, the 2011 Budget Control Act will trigger budget cuts of $1.2 trillion, evenly split between defense and non-defense spending. The result has been a political brawl on the campaign trail and between the political parties. Margaret Warner reports.
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JUDY WOODRUFF: There’s a familiar ring to this next story. Congress still has not agreed on how to balance the federal budget, and there’s a deadline approaching.

Margaret Warner explains the latest skirmish.

MAJORITY LEADER SEN. HARRY REID (D-Nev.): I want to also say a word or two about sequester.

MAN: Those who would be affected by the sequester.

MARGARET WARNER: Sequester, it’s been the bipartisan buzzword of choice lately.

The term refers to across-the-board budget cuts that take effect January 2, if lawmakers can’t produce a comprehensive deficit reduction package before then. The measure was part of the Budget Control Act passed by both houses of Congress and signed by President Obama a year ago.

The sequestration axe would slice $54 billion from defense and an equal amount from domestic programs from Head Start to the Border Patrol next year, with more to follow. Though the troops themselves are exempt, the looming defense cuts have kicked up a political firestorm, on full display Wednesday at a House Armed Services Committee hearing.

The Office of Management and Budget’s acting director, Jeffrey Zients, sparred with Republican Congressman Randy Forbes of Virginia.

REP. RANDY FORBES (R-Va.): Mr. Zients, I’m just asking if you can tell me if there’s any proposal you can put forward today, any proposal that the president has put forward to stop sequestration that has gotten a single vote?

JEFFREY ZIENTS, Office of Management and Budget: The root cause problem here is the Republicans’ refusal to ask the top 10 percent to pay their fair share…

REP. RANDY FORBES: Mr. Zients, I understand your partisanship. I’m just asking you if you can tell me if that proposal — can you point to such a proposal?

JEFFREY ZIENTS: There is…

REP. RANDY FORBES: Then your answer is no.

MARGARET WARNER: The verbal spat came after a weeks-long Republican campaign to sound the alarm to the public. Arizona Sen. John McCain and other Republicans have taken the message to states with lots of defense- related jobs.

SEN. JOHN MCCAIN (R-Ariz.): No uniformed military leader who we trust agrees that these cuts would do anything but devastate our national security.

MARGARET WARNER: House Armed Services Committee chairman Buck McKeon took aim at President Obama at a Mitt Romney presidential campaign event Tuesday in Arlington, Va.

REP. HOWARD “BUCK” MCKEON (R-Calif.): Has anybody here heard the word sequestration? Do you get sick and tired of hearing that we need to cut more out of defense?

MARGARET WARNER: And on the presidential campaign trail, President Obama and his Republican rival, Mitt Romney, have traded accusations about who’s to blame.

MITT ROMNEY (R): Today, we are just months away from an arbitrary across-the-board budget reduction that would saddle the military with a trillion dollars in cuts, severely shrink our force structure, and impair our ability to meet and deter threats.

Don’t bother, by the way, trying to find a serious military rationale behind any of that. If I am president of the United States, I will not let that happen.

PRESIDENT BARACK OBAMA: There are a number of Republicans in Congress who don’t want you to know that most of them voted for these cuts. Now they’re trying to wriggle out of what they agreed to do. Instead of making tough choices to reduce the deficit, they’d rather protect tax cuts for some of the wealthiest Americans, even if it risks big cuts in our military.

GORDON ADAMS, American University: This is theater.

MARGARET WARNER: Former top OMB defense budget official Gordon Adams, now teaching at American University’s School of International Service, sees a lot of posturing at play.

GORDON ADAMS: So this is a highly staged and scripted drama where every player is playing his or her part, everybody is jumping up and down, rending garments, tearing hair, gnashing teeth and making it look like horrible things like Armageddon are going to happen.

The reality is, I don’t expect it to happen, but, even if it did, it’s a slow-roll process when it does. But it’s a great thing to fight about in an election year.

MARGARET WARNER: Some defense contractors, like giant Lockheed Martin, have tried to stoke the fight by warning that, under a federal 60-day notice law, they may have to issue conditional layoff alerts to their workers before the November 6 election.

On Monday, the Department of Labor issued guidance that layoff announcements were not required and unwise while cutbacks were still speculative and unforeseeable.

Armed Services chairman McKeon dismissed that guidance as politically motivated.

REP. HOWARD “BUCK” MCKEON: They have no legal authority to do what they did. So, if I’m a CEO of a company and I go to my attorneys for guidance, they would just laugh at that, because if they do lay off their employees and don’t send the notice, then they are liable to be sued.

MARGARET WARNER: Fears of immediate hits to defense production lines in January are overblown, maintains defense budget expert Adams.

GORDON ADAMS: They will not feel the effect on January 1, in fact, because defense contractors today are working on contracts that were funded by dollars appropriated three years ago, two years ago, last year. And none of those dollars are going to be affected by a decision to do across-the-board cuts on January 2.

MARGARET WARNER: Yet, Deputy Secretary of Defense Ashton Carter made clear at Wednesday’s hearing that the administration is deeply worried about the impact.

ASHTON CARTER, deputy secretary of defense: Sequestration would introduce senseless chaos into the management of every single one of more than 2,500 defense investment programs, inefficiency into the defense industry that supports us, and would cause lasting disruptions, even if it only extended for one year.

MARGARET WARNER: And after the hearing, Carter told the “NewsHour” the dilemma faced by contractors is well-founded.

ASHTON CARTER: Each and every contractor who works for the Department of Defense has to take heed, because, remember, this is across the board. It is indiscriminate. So each and every — you named a bunch of aircraft and investment programs. Every piece of our operations and maintenance, all of our personnel accounts, every single thing gets hit with this.

MARGARET WARNER: So it’s not a political gimmick?

ASHTON CARTER: I have spoken to a number of our defense contractors. They take it as a serious matter. We have the same issue in the government, which is, we are trying to balance being ready if some — this really terrible thing happens to us, and not causing some of its bad effects before we even have a chance to solve it.

MARGARET WARNER: But as long as this remains a hot-button campaign issue for both parties, no one expects a deal to solve it before the November election.