Panetta warns of spending cut dangers

Last updated 07:33 07/02/2013
Panetta
REUTERS
LEON PANETTA: "These [cuts] would seriously damage the fragile American economy, and they would degrade our ability to respond to crisis."

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US Defense Secretary Leon Panetta has  laid out a grim list of spending cuts the Pentagon will have to make in the coming weeks that he said will seriously damage the country's economy and degrade the military's ability to respond to a crisis.

Panetta said members of Congress are irresponsible and willing to push the country off a fiscal cliff to damage their opposing political parties.

Panetta, who is set to leave his post this month, said that if Congress doesn't pass a budget, the Pentagon will have to absorb $46 billion (NZ$54.6b) in spending reductions in this fiscal year and will face a US$35 billion shortfall in operating expenses.

"These steps would seriously damage the fragile American economy, and they would degrade our ability to respond to crisis precisely at a time of rising instability across the globe," Panetta said in a speech at Georgetown University.

In separate, highly detailed memos sent to Congress, the military services described widespread civilian furloughs, layoffs and hiring freezes that will hit workers all around the country. Overall, the military will furlough 800,000 civilian workers for 22 days, spread across more than five months, and it will lay off as many as 46,000 temporary and contract employees.

The navy says it will cease deployments to South America and the Caribbean and limit those to Europe. The air force warned that it would cut operations at various missile defence radar sites from 24 hours to eight hours. And the army said it would cancel training centre rotations for four brigades and cancel repairs for thousands of vehicles, radios and weapons.

In addition to the more immediate cuts, US troops are also likely to see a smaller pay hike next year than initially planned, due to strains on the budget. According to a defence official, the Pentagon will recommend that the military get a 1 per cent pay increase in 2014, instead of a 1.7 per cent raise.

Former Republican senator Chuck Hagel has been nominated to take Panetta's place, and a vote by the Senate Armed Services Committee is expected this week.

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- AP

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