Cabinet Secretaries Warn on Spending Cuts

Secretary of State Hillary Clinton joined Secretary of Defense Leon Panetta yesterday in warning about the impact on national security if the “congressional supercommittee” does not reach agreement.

Panetta, a former congressman and former Director of the Office of Management and Budget (OMB), as well as former Director of Central Intelligence, made his views clear two weeks ago. He and Clinton, a former Senator, are concerned about the poison pill that was included in the debt limit/deficit reduction deal reached earlier this month. The two spoke at National Defense University yesterday.

The deal implemented approximately $1 trillion in spending cuts over the next 10 years immediately and directed that a 12-person congressional panel — three Democratic Senators and three Democratic Representatives plus three Republican Senators and three Republican Representatives — be established to find another $1.2-1.5 trillion in spending cuts by Thanksgiving. The panel has been dubbed a “supercommittee” in the media. Congress is then supposed to have an up or down vote (i.e., no amendments would be permitted) on the supercommittee’s recommendations by Christmas.

As an incentive for the group to reach agreement, draconian cuts to discretionary spending would automatically take effect if it does not or if Congress fails to pass whatever it recommends. DOD already is shouldering $350 billion of the initial $1 trillion in cuts. It would have to absorb another $500 billion over 10 years if the supercommittee process fails. The remaining cuts would come from other departments and agencies categorized as discretionary spending, including the State Department — and NASA and NOAA.

The two cabinet secretaries emphasized the need for the supercommittee to look at all government spending, including entitlement programs, as well as tax increases, rather than cutting only discretionary spending.

The 12 members of the supercommittee have been named. Political observers in Washington are split on whether those 12 individuals are likely to be able to reach a compromise or not, but many express concern about the tight time schedule they must meet. Legislative committees are due to give their recommendations to the supercommittee by October 14. The supercommittee then must make its recommendations by November 23, with voting completed in the House and Senate by December 23.