WASHINGTON — Defense Secretary Leon Panetta warned Tuesday that the United States will lose its standing as a world power if almost $500 billion in spending cuts are piled on top of nearly the same amount of savings already proposed by President Barack Obama over the coming decade.
At a Senate Budget Committee hearing, Panetta repeated that he is not prepared to accommodate the half-a-trillion dollars in defense cuts required by the failure of the supercommittee, which was tasked last fall with reducing the federal deficit by at least $1.5 trillion.
When the joint select committee was unable to reach a bipartisan agreement, a $1.2 trillion sequester was triggered. Almost half of that package of mandatory cuts by January 2013 dips into the Defense Department’s budget.
Obama has since vowed to veto any congressional attempt to reverse the sequestration, which was originally devised to prevent gridlock by holding hostage key budgetary interests of both parties.
During his testimony, Panetta panned that fiscal mechanism as bad policy that would drastically compromise national defense.
“We have made no plans for a sequester because it’s a nutty formula, and it’s goofy to begin with, and it’s not something, frankly, that anybody responsible ought to put into effect,” said Panetta, who chaired the House Budget Committee from 1989 to 1993. “It was designed as a gun to the head, and I was disappointed that the supercommittee failed in its job.”
Panetta called the automatic cuts a “meat-ax approach” that would require him to throw his department’s proposed fiscal 2013 budget “out the window.”
Noting the tone of Panetta’s rhetoric over the severe cuts, Sen. Lindsay Graham asked Panetta if he was willing to resign his post if forced to implement the additional $500 billion in defense savings.
“Well, I’m not gonna go there,” Panetta responded.
In a previous question, Panetta confirmed to the South Carolina Republican after a moment of hesitation that sequestration was the “dumbest idea he’s heard lately.”
At Tuesday’s hearing, Panetta detailed the 2013 defense budget without factoring in the possibility of nearly $500 billion in triggered cuts. His version did incorporate the $487 billion in defense savings called for in last August’s debt ceiling agreement.
Panetta’s fiscal strategy would reach that reduction target in 10 years by first relying on a five-year savings plan. That outline would trim $259 billion by identifying military inefficiencies, restructuring the armed forces and adjusting personnel costs.
The rest of the $487 billion would be made up through repositioning the department’s presence overseas and resizing its current fleet of ships and planes, among other strategic tweaks.
Even without including the additional $500 billion that could be on the horizon, Panetta cautioned that the proposed 2013 spending plan presents a new reality for both soldiers and civilians.
“I can’t reduce the budget by half a trillion dollars and not increase risk,” he said. “The bottom line is we think these are acceptable risks, but there are risks.”
Panetta was joined by Joint Chiefs of Staff Chairman Gen. Martin Dempsey, who echoed the defense secretary’s aversion to the threatened sequestration.
Dempsey said if the Defense Department were pressed to further slash its budget, he could only turn to four categories — operations, maintenance, training and modernization.
“That’s it. There’s no place else to go,” Dempsey told lawmakers. “Were you to go back and ask me to look for more money in those four accounts, no, sir, not in this environment.”
He said one of the reasons deeper defense cuts could endanger national security is that although troops have left Iraq and are slowly withdrawing from Afghanistan, there remain other serious threats abroad.
Dempsey pointed to potentially hostile countries like Iran, Syria and Pakistan, which Senate Budget Chairman Kent Conrad had already identified as “deep concerns” for his committee.
The North Dakota Democrat opened the hearing by acknowledging defense spending has remained on “what is fundamentally an unsustainable course.” But Conrad said he does not want to see the type of steep drop in defense spending that would be prompted by the trigger cuts.
Alabama Sen. Jeff Sessions, the top Republican on the panel, said he understood why Dempsey considered the $500 billion sequestration “draconian.” The big number, he said, is the result of sustained national debt that even the supercommittee could not resolve.
“If the administration thinks they can sweep this under the rug, they’re wrong,” Sessions added.
Panetta is set to testify again Wednesday before the House Budget Committee.