6/15/2012 - U.S. Sequestration Won’t Happen, Levin Predicts
The U.S. Senate Armed Services Committee chairman predictedJune 14 that Congress will find a way to avoid automatic budget cuts in Januarythat could hurt national security, but he added that any ultimate budgetagreement won’t leave the U.S. Defense Department unscathed.
Pressure is building, particularly within the defenseindustry, to head off the automatic across-the-board budget cuts scheduled totake effect in January under terms of last year’s Budget Control Act.
Beginning as early as October — perhaps sooner — layoffnotices could be delivered to defense industry workers, and possibly to someDoD civilian employees, as officials prepare for the possibility that Congressand the White House won’t come up with a compromise to avoid the automaticcuts.
Sen. Carl Levin, D-Mich., who has chaired the armed servicescommittee since 2007, said Thursday during a breakfast with defense reportersthat he believes sequestration will be avoided in January, although he isn’tsure how — or when an agreement might be reached.
He said he is optimistic about avoiding the cuts, which couldreduce defense spending by 10 percent, or about $55 billion, next year,“because 80 to 90 percent” of members of Congress want to preventsequestration.
Levin is concerned, however, that harm may result fromwaiting for lawmakers and the White House to reach the almost inevitablepost-election, last-minute agreement to either avoid or postpone the budgetcuts.
Even if agreement is reached, he said, “If it comes toolate, the specter of it could have a negative effect on the economy and onpeople’s lives.”
Levin is pushing the idea of a pre-election bipartisanannouncement of the intention to come up with a later budget agreement. He saidsuch an announcement might soothe the stock markets and reassure the public,and could include some details on areas where lawmakers agree, such asextending middle-class tax cuts.
The U.S. House of Representatives has passed a budget planthat would avoid sequestration while also reversing the cuts in defenseapproved last year as part of the Budget Control Act, but Levin discounted thatplan as unworkable.
Defense cuts, he said, will have to be part of any finalagreement to achieve $1.2 trillion in deficit reduction over 10 years. Hesuggested a plan that would include about $200 billion over 10 years in cuts indiscretionary spending, with half coming from defense. The impact of a roughly$10 billion annual reduction in defense spending would be far less than theconsequences of sequestration.
Levin declined to specify how that $10 billion savings couldbe achieved, saying providing details at this point would not make it easier toget an agreement.