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White House Tells Pentagon to Begin Planning for Cuts

Photographer: Andrew Harrer/Bloomberg

The White House budget office has directed the Defense Department to start initial planning for billions of dollars in automatic cuts that may start taking effect on Jan. 2, the Pentagon’s chief spokesman said today. Close

The White House budget office has directed the Defense Department to start initial... Read More

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Photographer: Andrew Harrer/Bloomberg

The White House budget office has directed the Defense Department to start initial planning for billions of dollars in automatic cuts that may start taking effect on Jan. 2, the Pentagon’s chief spokesman said today.

The White House budget office has directed the Defense Department to start initial planning for billions of dollars in automatic cuts that may start taking effect on Jan. 2, the Pentagon’s chief spokesman said today.

“We don’t have all the specifics yet,” spokesman George Little told reporters. “This really just has begun. We don’t have specifics on programs or personnel actions.”

Defense Department officials have said for months that they weren’t doing formal planning for how to implement the $500 billion in cuts over a decade, including $52.3 billion this fiscal year. The military has prepared only for $487 billion in already-planned reductions.

The Office of Management and Budget sent a letter to federal agencies this week asking them to collect information and prepare for the automatic cuts, White House spokesman Jay Carney said today. He said the budget office was making contingency plans as a matter of prudence and asked agencies “for additional information to finalize calculations on the spending reductions that would be required.”

Averting Cuts

Little and Defense Secretary Leon Panetta said previously that the automatic cuts, called sequestration, were unthinkable and should be averted by Congress. President Barack Obama and lawmakers are embroiled in negotiations over ways to forestall the combination of spending cuts and tax increases known as the fiscal cliff.

“We don’t want to go off the fiscal cliff, but in consultation with OMB we think that it is prudent at this stage to begin at least some limited internal planning,” Little said today.

Alan Chvotkin, executive vice president of the industry trade group Professional Services Council, said he wished the planning process had started weeks ago.

“That’s not to say we want sequestration to go into effect, but if it is going to go into effect, you at least want it to be implemented in a smart, thoughtful and planned manner rather than as a crisis response,” Chvotkin said. His organization is based in Arlington, Virginia, and represents defense contractors such as CACI International Inc. (CACI) and SAIC Inc. (SAI)

Dan Stohr, a spokesman for the Aerospace Industries Association, said “planning is better than no planning, because sequestration is the law of the land.”

The group, also based in Arlington, has been leading an industry campaign to prevent the cuts.

“It’s tough to say whether this is another part of the bargaining process or if it’s a signal sequestration will go forward,” Stohr said.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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