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August 5, 2012

Implications of Pentagon Cuts

By

They are flustered in Great Falls, Mont. Dallas is dithering. California has questions. Alamogordo, N.M., is anxious. From one corner of America to the other, Americans who in one way or another are linked to the mission of providing for the common defence are pondering the possibility of automatic cuts that are coming to the Pentagon budget. Unfortunately, job one in the White House seems to be to do everything possible to keep them in the dark – until after the election.

Under the Budget Control Act of 2011, unless Congress can’t get the budget under control (which Washington has so far demonstrated it can’t do), the federal government is forced to take automatic reductions in spending over the next 10 years – a process called “sequestration.”

This, of course, is the least efficient way possible to manage your money. If Washington ran your household budget, it would be like cutting the cash you pay for your mortgage and your Direct TV account in equal measure. Apparently, losing your home and missing the next episode of Dancing with the Stars are equally important.

In the case of Pentagon cuts, the implications are nonsensical. Even the Centre for American Progress, a progressive think tank that is always sceptical of Pentagon spending, pointed out, “If the Navy were budgeted to issue contracts on 10 ships in fiscal year 2013, then it would not be permitted to cancel one of the ships but would have to apply the cuts equally across each of the 10 ships.” That makes no sense.

Congress made this bad plan worse by exempting entitlement payouts. As a result, defence – which is less than 20 per cent of the budget – gets hit with about 50 per cent of the cuts.

It’s vitally important to get this right. Defence spending is not a jobs programme or a stimulus package. It is Washington’s job No. 1. The cold reality is, these cuts are going to cut back military capabilities and harm readiness. The economy will be worse off, and we’ll all be less safe.

The White House response is try keep communities from across America from knowing how their plans for the US defence industrial base will affect the jobs in their town until after the election. A law known as the WARN Act requires employers to issue notice of potential layoffs 60 days in advance.

That would mean sending pink slips out before the election. So, a few days ago the Department of Labour, which has the job of implementing the law, declares: Not so fast. In fact, the department declared issuing notices would be “inappropriate.”

One legal expert who looked at the decision found this baffling. “The text of the law seems pretty clear,” concluded The Heritage Foundation’s Paul Rosenzweig. “All they are doing is trying to interpret it away. Their argument boils down to ‘the layoffs are not certain because we (the government) are trying to fix it.’” That logic would probably be true for most companies. Why does the federal government get a bye?

There is even a question over whether President Obama is really trying to fix it. The House passed a budget that would stay under the mandatory spending caps, not raise taxes, and cut defence. The president threatened to veto it – and has said and done almost nothing else on the issue.

If the president believes we should spend less on the Pentagon and pay higher taxes, he is well within his rights to campaign on this message. But it is wrong to hide from the American people the consequences of his policies. Stealth politics is not good democracy.

First appeared in The Gulf Today.

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