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Panetta: Defense cuts will increase unemployment

By PHIL STEWART
September 16, 2011

Defense Secretary Leon Panetta. (REUTERS/Jonathan Ernst)

Defense Secretary Leon Panetta is warning members of Congress that threatened defense cuts in the order of $1 trillion over the next decade would add 1 percentage point to the U.S. unemployment rate, a senior defense official said on Thursday.

The assessment, disclosed by the Pentagon, appears to be the latest attempt by the new defense secretary to buck bigger defense cuts he says could be “devastating” to the U.S. armed forces and national security.

Congress reached an agreement in August that calls for at least $350 billion in cuts to national security spending over 10 years, and Pentagon officials are looking at ways to do that without harming U.S. security interests. Washington is wrestling with record budget deficits and a stubbornly high 9.1 percent unemployment rate.

But the agreement also created a committee to seek further spending cuts. If the bipartisan panel fails to reach a deal by the end of the year, it would trigger automatic across-the-board reductions that could slash defense and national security spending by a further $600 billion.

“What we’re talking about there is in the neighborhood of about a trillion dollars of defense cuts,” Pentagon spokesman George Little told reporters flying with Panetta to Washington after talks with Australia in San Francisco.

“We believe that would result in job cuts that would add potentially 1 (percentage point) to the national unemployment rate.”

A senior U.S. defense official, speaking on condition of anonymity, told reporters that Panetta delivered details of that assessment to members of Congress during the past week.

The Pentagon assessment concludes that cuts of $1 trillion would result in the smallest Army and Marine Corps in decades, the smallest tactical Air Force since it was established after World War Two. It would also result in “the smallest Navy in nearly 100 years,” Little said.

Some defense experts say the Pentagon’s budget has become bloated over the past decade and could absorb as much as $1 trillion in spending cuts over the next 10 years.

But Little said the Pentagon assessment concluded that was not the case and that cuts over and above the level already in the works would be disastrous.

“That scenario would be devastating to our nation’s security,” Little said.

Defense industry officials, led by Jim Albaugh of Boeing Co, met with Panetta at the Pentagon on Tuesday to express their concern about budget cuts.

Defense contractors have also launched a broad lobbying campaign to drum up public support for holding the line on U.S. military spending cuts.

Lockheed Martin’s F-35 Joint Strike Fighter, the Pentagon’s costliest weapons program, is under close scrutiny for budget savings in Congress.

The Senate Defense Appropriations subcommittee proposes to cut it by $695 million for the fiscal year beginning October 1. It has also recommended termination of the Joint Light Tactical Vehicle Program, a possible replacement for Army and Marine Humvee vehicles.

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2 Responses to Panetta: Defense cuts will increase unemployment

  1. Carl Nemo **==

    September 16, 2011 at 1:52 pm

    This is what happens when a nation turns the very waging of war into a ‘business opportunity’ as in the case of the MIC.

    It’s truly Orwellian in that we must wage perpetual “no win” engineered wars to maintain full employment into perpetuity, ferreting out ‘terrorists’ everywhere and anywhere worldwide, seemingly until the end of civlization as we know it.

    http://en.wikipedia.org/wiki/Airstrip_One#Airstrip_One

    Have any of them thought of ways to turn our talents for destruction into the greening of America without giving away our money to the Chinese in order for them to become the premier manufacturer of wind and solar generating equipment. We have an electrical grid that needs updating nationwide, bridges, roads, water purification systems and waste management that needs serious remediation. There’s plenty of work for all from the scientific and engineering level on down to the folks installing and maintaining domestic infrastructure.

    Panetta needs to pull the plug on the offensive nature of our military, engineered to such levels under years of PNAC driven Bushista mismanagement whose family patrons have been the MIC since early part of the 20th century as far back as WWI. All we need is a superb defense posture along with multiple contingents of SOCOM personnel for insertions into faraway places in the event regional destabilization is detected. Satellite surveillance, predator drones and personnel of this caliber are all we need, not hundreds of thousands of grunts and ‘tankheads’ milling about the deserts and mountains the Middle East, Afghansitan, Pakistan, Libya etc. at ruinous cost to the taxpayers. Enough is enough. It’s time to come home and rebuild the homeland from the ground up and to forge the weapons of war into plowshares.

    Rest assured we’re safe enough. MAD is still in place with a reasonable contingent of B52H bombers, ICBM’s and our nuclear submarine fleet. No nation on earth can prevail against such in the event they should be so foolish to launch on the U.S. “We the People” will get the last word and shall prevail if such an attack should happen in this final world conflagration. So too, our enemies realize such is the case. : |

    Carl Nemo **==

  2. FredW

    September 19, 2011 at 1:28 am

    This is a despicable statement. There may be good reasons not to cut defense spending, but using jobs as an argument is indefensible. The worst thing about Bush was that he labeled everything “National Security” and, after he screwed up the economy, “Stimulus” even if it wasn’t. It was a way of using fear to shove unpalatable crap down our throats instead of really solving the problems. The worst thing about Obama is that he does the exact same thing; everyting is “stimulus”, even if it really isn’t. To make us fear pentagon cuts as a jobs issue is just plain immoral. Perhaps, Mr Panetta, we should open wars on a few more fronts until we reach full employment or until the unemployed are all dead.