Panetta on Sequestration: 'We Have No Idea What the Hell's Going to Happen'

By Susan Jones | January 11, 2013 | 7:09am EST

Defense Secretary Leon Panetta, accompanied by Joint Chiefs Chairman Gen. Martin Dempsey, gestures during a news conference at the Pentagon, Thursday, Jan. 10, 2013. (AP Photo)

( - "Fiscal uncertainty" is the most immediate threat confronting the Defense Department, Defense Secretary Leon Panetta said on Thursday.

He said a "perfect storm of budget uncertainty" -- including "additional meat-axe cuts as a result of sequestration" -- could seriously harm military readiness and result in civilian furloughs, a hiring freeze and the delay of some Defense contracts.

Panetta noted that the recent fiscal cliff deal has delayed sequestration (deep and automatic Defense Department budget cuts) from taking effect until March 1st, which is less than 50 days away.

"While we appreciate the fact that both parties came together to delay sequester, the unfortunate thing is that sequester itself, and the sequester threat, was not removed.  So the prospect of it happening again is undermining our ability to responsibly manage this department in the current fiscal year.  

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"Indeed, we are seeing the formation of what I would call a perfect storm of budget uncertainty. With a sequester that could happen on March 1st, a continuing resolution that could simply be extended for the rest of this fiscal year, as opposed to having a defense appropriations bill adopted, and, thirdly, a debt ceiling crisis that could create even further turmoil that could impact on our budget and on our economy."  

"And the fact is, looking at all three of those, we have no idea what the hell's going to happen. All told, this uncertainty, if left unresolved by the Congress, will seriously harm our military readiness."

Panetta said given the prospect of deep cuts in the operating budget that's essential to maintain military readiness, he has no choice but to prepare for the worst:

"Regardless of what Congress does or fails to do, we still have an obligation to protect this country. So for that reason, I've asked the military services and the other components to immediately begin implementing prudent measures that will help mitigate our budget risk.  For now, I've made clear that these actions must be reversible to the extent feasible and must minimize harmful effects on readiness.

"These actions should include having to curtail facility maintenance for non-mission-critical activities, freezing civilian hiring, delaying certain contract awards, along with other steps.  ...This includes a plan to implement potential unpaid furloughs for our civilian personnel if sequestration is triggered.

"This action is strictly precautionary.  I want to make that clear:  It's precautionary.  But I have an obligation to let Congress know that we may have to do that, and I very much hope that we will not have to furlough anyone.  But we've got to be prepared to do that if we face this situation."

Panetta emphasized his intention to be sure the military is prepared to carry out its core missions -- "including the ability to successfully deter aggression, if necessary.  I want to emphasize, however, that no amount of planning, no amount of planning that we do can fully offset the harm that would result from sequestration, if that happens."  

He said the nation's leaders have a responsibility to provide for the security of the American people.

"We must ensure we have the resources we need to defend the nation and meet our commitments to the troops, to our civilian employees, and to their families, after more than a decade of war."

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