Panetta: Congress Must Look at Whole Federal Budget for Cuts

WASHINGTON, Aug. 16, 2011 — Bud­get con­cerns and the need for the Defense Depart­ment to work with the State Depart­ment dom­i­nat­ed a dis­cus­sion at the Nation­al Defense Uni­ver­si­ty here today with the Cab­i­net mem­bers who lead those depart­ments.

Sec­re­tary of State Hillary Rod­ham Clin­ton and Defense Sec­re­tary Leon E. Panet­ta talked with stu­dents at the Nation­al War Col­lege and the Indus­tri­al Col­lege of the Armed Forces at Fort McNair. Frank Ses­no, a for­mer CNN cor­re­spon­dent who now works at the George Wash­ing­ton Uni­ver­si­ty, mod­er­at­ed the dis­cus­sion.

Both State and Defense face bud­get cuts as a result of the debt-ceil­ing deal worked out Aug. 2. Panet­ta said the cuts will affect nation­al secu­ri­ty, and that he and Clin­ton want the Amer­i­can peo­ple to “rec­og­nize how impor­tant it is that we main­tain our nation­al secu­ri­ty and that we be strong.”

But the defense sec­re­tary acknowl­edged that the fis­cal out­look presents a chal­lenge.

“We rec­og­nize that we’re in a resource lim­i­ta­tion here, and that we got to deal we’ve those chal­lenges,” Panet­ta said. “But I don’t think you have to choose between our nation­al secu­ri­ty and fis­cal respon­si­bil­i­ty. And I want the coun­try to know that we can get this done, but we have to do it in a way that pro­tects our nation­al defense and pro­tects our nation­al secu­ri­ty.”

The Defense Depart­ment can han­dle the $350 bil­lion in sav­ings over the next 10 years that is man­dat­ed in the agree­ment, the sec­re­tary said. But if mem­bers of Con­gress can­not agree on fur­ther reduc­tions, anoth­er $500 bil­lion in funds would be sequestered from the depart­ment.

“If they do the sequester, this kind of mas­sive cut across the board which would lit­er­al­ly dou­ble the num­ber of cuts that we’re con­fronting,” he said. “That would have dev­as­tat­ing effects on our nation­al defense. It would have dev­as­tat­ing effects on, cer­tain­ly, the State Depart­ment.”

Con­gress must look beyond the “dis­cre­tionary spend­ing” in the fed­er­al bud­get — most of which is in Pen­ta­gon fund­ing — to address the nation’s deficit, Panet­ta said.

“If you’re seri­ous about deal­ing with bud­get deficits, you can’t just keep going back to the dis­cre­tionary part of the bud­get,” he said.

An across-the-board cut of that mag­ni­tude would hol­low out the force and weak­en America’s abil­i­ty to respond to threats, Panet­ta said.

“More impor­tant­ly,” he added, “it would break faith with the troops and with their fam­i­lies. And a vol­un­teer [force] is absolute­ly essen­tial to our nation­al defense. Any kind of cut like that would lit­er­al­ly under­cut our abil­i­ty to put togeth­er the kind of strong nation­al defense we have today.”

Ses­no asked Panet­ta about a report call­ing for changes to the mil­i­tary retire­ment sys­tem. A task group for the Defense Bud­get Board stud­ied the issue and will sub­mit a report lat­er this month, Panet­ta said. He stressed that no deci­sions have been made with regard to retire­ment.

“It’s the kind of thing you have to con­sid­er, in terms of retire­ment reforms in the broad form,” he said. “But you have to do it … in a way that doesn’t break faith … with our troops and with their fam­i­lies. If you’re going to do some­thing like this, you’ve got to think very seri­ous­ly about ‘grand­fa­ther­ing,’ in order to pro­tect the ben­e­fits that are there.”

Panet­ta vowed to pro­tect the ben­e­fit. “But at the same time, you know, you’ve got to look at every­thing on the table,” he added.

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs)