Published: July 23, 2013
Failure by Congress to end budget sequestration could force the services in fiscal 2014 to freeze military promotions, suspend recruiting and halt all change-of-station moves, Defense Secretary Chuck Hagel warned in a letter this month to leaders of the Senate Armed Services Committee.
Automatic budget cuts are "severely damaging military readiness," Hagel wrote to Sen. Carl Levin, D-Mich., committee chairman, and Sen. Jim Inhofe, R-Okla., ranking Republican.
Without relief, defense spending will take another $52 billion hit in the fiscal year that begins Oct. 1.
If Congress lets that happen by continuing to refuse to compromise on a debt reduction deal, the Department of Defense will keep a civilian hiring freeze in place, continue to neglect facilities maintenance, deepen cuts to weapon programs, and impose "an extremely severe package of military personnel actions including halting all accessions, ending all permanent change-of-station moves, stopping discretionary bonuses, and freezing all promotions," Hagel wrote to introduce a budget "contingency plan."
Levin and Inhofe had asked Hagel to describe how keeping sequestration in place would impact defense budgets and national security. They are worried that "many members of Congress and the American public still seem to have the view that sequestration is an effective way to cut government spending, and can be made workable simply by providing the department with additional flexibility or making minor adjustments."
Hagel explained that any debt-reduction deal to remove sequestration would still require Congress to make hard choices in order to preserve readiness, modernize weapon systems and sustain combat power. The hard choices, Hagel wrote, must include temporary caps on military pay raises and higher Tricare fees on military retirees.
Congress also must allow retirement of lower-priority weapons including older ships and aircraft, remove restrictions on the rate of drawdown for U.S. ground forces, and support other cost-saving moves including a new round of base closings, Hagel wrote.
If sequestration continues and Congress won't support these cost-saving proposals in President Obama's budget, U.S. combat capability will take an even deeper hit in 2014 and beyond, Hagel suggested.
There are plenty of details in his plan to frighten legislators about deepening defense budget cuts. This Congress, however, has shown itself more immune than most to reasoned arguments and rational compromise.
If sequestration continues into the new fiscal year, Hagel said, there will be "serious adverse effects" on the "readiness and technological superiority of our military" even if it were to provide some special flexibility in how the $52 billion in cuts are administered.
The Defense Department, Hagel said, "would seek to minimize cuts in the day-to-day operating costs most closely related to training and readiness."
It would keep in place a hiring freeze on civilian employees and continue to reduce facilities maintenance. That would mean more understaffing of units and offices, and some employees working in "substandard conditions."
The Pentagon wants to avoid another civilian employee furlough. But in fiscal 2014, if sequester takes another bite, the Defense Department would consider an involuntary reduction-in-force and deeper training cuts for defense civilian employees.
Military personnel accounts were spared the brunt of sequestration in fiscal 2013. If, as expected, these accounts are not protected from new across-the-board cuts this fall, the Defense Department predicts having to make draconian moves impacting promotions, change of station moves, recruiting and "discretionary" bonuses, presumably to include re-enlistment bonuses to shape the military's skill mix.
Hagel had ordered a Strategic Choices and Management Review to develop options in an attempt to accommodate sequestration without serious damage to military capabilities.
The resulting options won't do that, he said.
A cut of $52 billion in defense spending would be steep, but the portion that could be taken out of military personnel accounts would be relatively modest, the report said.
That's because cost savings from force cuts would be offset by separation pay, exit travel costs, unused leave payments and, for some members, unemployment insurance.
So if personnel accounts were directed to absorb just a 10 percent share of the 2014 sequestration hit - $5.2 billion - that would require the "extremely severe package" of personnel actions described earlier.
"The inability to reduce military personnel costs quickly would put additional downward pressure on other portions of the FY 2014 budget," Hagel's plan explained.
If Congress keeps sequestration in place, Hagel calls for a more rapid force draw-down than current law allows, with some involuntary separations likely - perhaps even affecting personnel recently returned from Afghanistan.
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