Transcript: Testimony of Deputy Secretary of Defense Ashton Carter on the impacts of sequestration

Transcript of testimony of Deputy Secretary of Defense Ashton Carter on the impacts of sequestration. The Senate Armed Services Committee hearing was held on Feb. 12, 2013.

Thank you, Mr. Chairman, Senator Inhofe, all the members of the committee. I am going to be very brief because I think what you would like to get to and we would like to get to is the specifics of the impacts of these two budget circumstances that we face, first of all, sequestration, and the second, the possibility of the continuing resolution going on for the entire year.

I thank you for this hearing, and I mean that from the bottom of my heart. We welcome an opportunity to describe these impacts. Secretary Panetta and I have been using the word “devastating” for 16 months now, and I testified last August to the consequences of sequestration if it was to occur. And now the wolf is at the door.

You who know us, who understand us, and know national security inside and out by virtue of your service on this committee, are critical because I am hoping that when we describe what the consequences of these things are for national defense as we see it and give you the information that you need, that you can, in turn, communicate to your colleagues in the Congress and that we can move in the direction of the comprehensive solution to both these problems that you referenced.

To Senator Inhofe, absolutely we will provide that information. We are still—and we will continue to be for some months—working through the managerial consequences of this situation, and as we do, we will provide to this complete information as we have, organized in any way you want. And today is a start in that regard.

The problem comes in two tiers. The first is that sequestration, which is scheduled to kick in just 2 weeks’ time, requires us to subtract from our budget for the remainder of fiscal year 2013 $46 billion, and as the chairman indicated, to do it in a way, the worst way managerially, namely, to take equal shares or proportionate shares from each and every part of the budget, which is obviously not what you would do if you were trying to be sensible from a managerial point of view.

Second, the continuing resolution that we are operating under now going into 5 to 6 months creates a different kind of problem for us. It has enough money in it overall, but as you indicated, Mr. Chairman, it does not have enough operations and maintenance money. And you put those two things together and in this year there is a drastic shortfall in the funding that we need to do training. And training, in turn, impacts readiness, and readiness is our capacity to fight in other places in Afghanistan. We are protecting funding for Afghanistan.

And as you know, under sequester the President has decided to exempt military personnel from sequestration, and we have made some other limitations. In my direction to the Department, I have made some other limitations. We will protect wounded warrior programs. In addition to the wars, we will protect urgent operational needs. We will protect, to the extent we can, capabilities that are critical to our new defense strategy. But the reality is we cannot protect much of which is now of value to the country.

So in the near term, what you have this year in the next few months is a true crisis in military readiness. If the caps imposed that accompany sequester are continued for the next 10 years, as is the plan in the Budget Control Act, we are going to have to change our national defense strategy. Those cuts are too large, too sustained for us to implement the strategy that we crafted under the President’s guidance just 1 year ago.

I understand, Mr. Chairman—and I have long understood—that the Department of Defense must contribute to the resolution of the Nation’s fiscal situation, and that is why we have accommodated $487 billion in cuts last year and before that, under Secretary Gates, made several hundred billion dollars of additional cuts in defense spending largely by removing unneeded or under-performing programs.

We are also making, as you referenced Admiral Winnefeld as having said, an historic adjustment associated with the winding down of a decade dominated by the wars in Iraq and Afghanistan.

We are making that adjustment as well. I also understand that the taxpayer deserves careful use of every dollar we do get, and that is why we have striven and we will continue to strive to get better buying power for the defense dollar and reform the acquisition system. But both the strategic approach to deficit reduction and efficient use of defense dollars will be undermined by sequestration.

And what is particularly tragic is that sequestration is not a result of an economic recession or an emergency. It is not because discretionary spending cuts are the answer to our Nation’s fiscal challenge. You can do the math. It is not in reaction to a more peaceful world. You referenced the North Korean nuclear test this morning. It is not due to a breakthrough in military technology or to a new strategic insight. It is not because the paths of revenue growth and entitlement spending have been explored and exhausted. It is not because sequestration was ever a plan that was intended to be implemented. All this is purely the collateral damage of political gridlock.

For our troops, for the force, the consequences are very real and very personal. I will give you a few examples. I told you that we intend—the President intends to spare military personnel spending from sequestration. But the troops will feel the effects of this very directly in other ways.

For example, you referenced the cancellation of a carrier deployment. We had to do that because we had to recognize that we were going to run out of operations and maintenance funds in the Navy later in the year, and we made the decision to not deploy the carrier but instead keep it here in the United States so that we would have the capacity to deploy it later if we needed it. If we deploy it now, we would not have the capacity to have a carrier deployed there in the future. We had to make that decision. All of the sailors on that aircraft carrier were ready to go. Their families were ready to go. They had made plans for where they were going to live, for family care, schools, all those things that go with sending a loved one on a deployment. All that needed to change within a few days.

Army units that are coming down—I visit them around the country—coming back from Afghanistan are used to being at the highest state of readiness, being trained and ready. And what motivates them—what should motivate them is mission. By the end of the year—and I think General Odierno will detail this—they will not be training in the way that their profession requires them to. So it will have a big effect on our uniformed people.

For our much maligned civilians, you know, a lot of people think that DOD civilians are people who live in the Washington suburbs and get up in the morning and come in and go to work in an office building here. They are not. They are mostly people at depots and shipyards that are fixing our equipment. 44 percent of them are veterans. 86 percent of them do not even live in the Washington area. And later in the year in just 2 weeks’ time, we are going to have to institute a process of furloughing them, which we will do consistent with the law and our requirements to you. But the net of it is that many of them will be furloughed for as many as 22 days before April 1st, say, and the end of the year; in other words, a fifth of their paycheck gone. So that is a real human impact.

I cannot be furloughed under the law because I am a presidential appointee, but I am going to give back a fifth of my salary in the last 7 months of the year if other people in the Department are getting sequestered. So there is a real human impact here.

And the last impact I would like to call to your attention is that on our defense industry. You know, we depend on our defense industry because it, second only to the magnificent people we have in uniform, is what makes our military great. And the effects of sequestration are going to be very significant on the defense industry, and we see it already. We depend upon them to be able to attract and retain science and technology talent. We need them to be financially successful. But many of our industry partners are beginning now to curb internal investment, maintain a very liquid position. The effects of this uncertainty are beginning to show up in terms of investor confidence in our industry, their ability to attract and retain workers, and the requirement to stretch programs, reduce buy rates. And all of that introduces the inefficiency into our procurement system.

So for the force, military, civilian, and industry, the consequences are very direct and very devastating.

I would just close with an appeal that I would ask you to convey to your colleagues in Congress. We need to deal very quickly and broadly with our deficit problems in a balanced way that the President can support and Congress can support. We need to detrigger sequestration. We need to pass appropriations bills for all our Federal agencies for that matter.

I understand that there is probably not enough time to accomplish all of these far-reaching actions before sequestration is triggered on March 1st, but I would urge at least that Congress delay sequestration.

But as I emphasized, the cloud of uncertainty hanging over our Nation’s defense affairs is already having lasting and irreversible effects, and ultimately the cloud of sequestration needs to be dispelled and not just moved to the horizon. And however this is done, the magnificent men and women of the Department of Defense and their families deserve no less. They need to know with certainty that we will meet our commitments to them.

Our partners in the defense industry and their employees need to know that we are going to have the resources to procure the world-class capabilities they can provide and that we can do so efficiently.

And perhaps most important, allies, partners, friends, and potential foes the world over need to know that we have the political will to implement the defense strategy we have put forward.

Thank you.

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