The U.S. House of Representatives last week overwhelmingly voted to give the Obama administration 30 days to detail the $500 billion in automatic defense cuts that would be triggered if Congress fails to embrace a broader deficit reduction deal.
The administration has avoided detailing automatic cuts specified by last year’s Budget Control Act, in part to keep them from becoming a reality.
Under the law, every program, project or activity would be cut 8 to 15 percent, although the president can exempt military personnel. If he does that — and in the first year, he will probably have to — that means acquisition, operations and research will have to make up the difference.
It’s also unclear how much more it will cost — in charges and future litigation — to alter every Defense Department contract that suffers a cut.
With a Jan. 2 deadline looming and increasing uncertainty that sequestration can be avoided, alarmed defense industry leaders say they are legally bound to start warning employees of potential layoffs that the Aerospace Industries Association claims could cost as many as 2 million jobs.
Clearly, the heated rhetoric from industry and DoD leaders aims to terrify lawmakers into action in an election year.
Still, businesses hate uncertainty. It was uncertainty that America might default on its debt last summer that prompted the first-ever downgrade of U.S. debt, prompting the budget deal that set up the sequester threat.
Greater clarity about sequestration’s impact is welcome, but the details are less important than avoiding sequestration in the first place.
Lawmakers manufactured this crisis and it’s up to them to adopt a deal that responsibly cuts the nation’s debt by paring back government spending, reforming entitlements while also increasing revenues.