Revised: Panetta Reassures DOD Personnel on Potential Budget Cuts if Supercommittee Fails to Agree

Secretary of Defense Leon Panetta sent a letter to DOD personnel yesterday reassuring them that although DOD must share in budget cuts, he would “fight for you and your families” as the debt limit/deficit reduction deal plays out. His specific concern is the potential across-the-board cuts that would take effect if the 12-person congressional commission — or “supercommittee” as it has come to be known — fails to reach agreement on more cuts.

The debt limit/deficit reduction deal signed into law on Tuesday included immediate agreement on $1 trillion in cuts over 10 years of which $350 million is from defense. However, it creates a 12-person congressional supercommittee that is chartered to put forward by Thanksgiving — and that Congress must pass by Christmas — another round of cuts totalling $1.2 – 1.5 trillion over 10 years. As an incentive, a provision is included that says that if the supercommittee fails to reach agreement or Congress fails to pass it, a set of automatic across-the-board cuts would take place. Those cuts would be distributed evenly between defense and non-defense spending. Potential cuts to Medicare providers are permissible, but other cuts are not, including cuts to Medicare benefits and Social Security. The New York Times has a helpful graphic of how the deficit deal works.

Panetta said in his letter that the across-the-board cuts were designed to be “unpalatable” to force the congressional supercommittee to reach agreement and Congress to approve it. Panetta, a former congressman and former Director of the Office of Management and Budget (OMB), referred back to the problems created after the Vietnam War with across-the-board funding cuts. He insisted that DOD must think carefully about what its requirements are for the future and cut in specific areas: “By better aligning our resources with our priorities, the Department can lead the way in moving towards a more disciplined defense budget.”

Note: The title and text of this article was revised to indicate that the congressional “commission” set up by the debt llimit/deficit reduction deal has come to be known as a “supercommittee” and to include a more specific reference to the deal.