Budget Blues

Defense Secretary Leon Panetta this week said he was worried that Americans had lost their trust in the government in the wake of a congressional supercommittee's inability to rein in government spending. In a speech at the National Press Club yesterday, Panetta said: "Today I worry that in many ways we have lost the trust of the American people in that system of government because they are not seeing that dedication, that hard work, that sense of sacrifice that is important to our democracy." Further, according to his prepared remarks:

I've been railing about the threat of budget sequestration.  I know the challenges of the budget.  I've worked with the budget.  I know what budgets are all about.  But when there's a mechanism like sequestration, which is this kind of blind meat-axe approach to putting that in place if you don't do the right thing, there's something wrong.  There's something wrong if you have to fall back on that kind of mechanism.  And I’ve said that if it happens, it could do lasting damage, obviously, to defense policy in this country.  And it will.

But I also have to tell you that sequester is not a good thing for the domestic side of the budget either.  I mean, the fact is, if you want to be secure in this country, it isn't just about national defense.  It isn't just about weapons.  It's also about the quality of life that you have in this country.  And if we are not investing in that quality of life, ultimately that impacts on our ability to have strong national security.

So the failure of the super committee to come together and to make the decisions that should have been made is a failure that can result in damaging this country and damaging that dream that all of us have for a better life for our children.

Having worked on confronting these budget challenges for much of my life, there is no question we have to confront the deficit.  There is no question that we have to provide the kind of compromises that will result in dealing with reducing the deficit and trying to ensure that we have the resources we need in order to invest in the areas that count for the future.  This is a time really for statesmanship and it’s a time not for partisanship, but for statesmanship.  It’s a time for real dedication to what this country needs to do and not just sound bites and politics.  This is a time for very tough choices.

InsideDefense.com reported yesterday from New York that the Pentagon's fiscal year 2013 budget proposal will be cut by at least $40 billion, followed by cuts of roughly $50 billion annually for a decade, to comply with spending caps Congress and the White House agreed to in August:

Michael McCord, the Pentagon's deputy comptroller, also said the White House Office of Management and Budget has issued "pass-back" fiscal guidance to the Defense Department for FY-13, setting the stage for a final round of high-level decisions about which programs and force structure elements will be preserved and which will be cut in the new budget proposal.

"We're getting to that point now where the secretary is making the major funding decisions," McCord said, referring to Defense Secretary Leon Panetta, in remarks following an address to investors and financial analysts at a conference sponsored by Credit Suisse, an investment bank.

He said the new budget would propose "tailored" force-structure reductions that "will be controversial" and "painful."

In addition, the Pentagon's No. 2 budget official said Panetta has presented President Obama with draft versions of the Pentagon's new strategy guidance that proposes a recalibration of the U.S. military in accordance with plans to cut defense spending by more than $450 billion over the next decade. Acting Pentagon acquisition chief Frank Kendall has said the cuts could be about $490 billion.