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Pentagon’s 46,000 Temporary Workers May Lose Their Jobs

The Pentagon has given managers authority to start firing some of its 46,000 temporary workers now in anticipation of across-the-board spending cuts set to take effect in March according to Deputy Defense Secretary Ashton Carter.

By mid-February, the Defense Department is also likely to begin notifying its 800,000 civilian employees that they face mandatory unpaid leave one day a week starting in April unless Congress and President Barack Obama agree on a way to avert the spending cuts aimed at reducing the federal deficit, Carter told reporters in a briefing at the Pentagon today.

“There will be 800,000 people subject to furlough all over the country who will not be getting a fifth of their paycheck” if the cuts take effect, he said.

Carter’s briefing was the latest in the Pentagon’s continuing campaign to prod Congress for action to block the spending cuts, which would trim $45 billion from defense programs in the current fiscal year that ends Sept. 30.

The mandatory leaves may run through the fiscal year and would save as much as $5 billion, Carter said. “It’s unfair and unreasonable,” he said.

The notices are required to be sent about 45 days before mandatory leave takes effect, Carter said. Almost 86 percent of those affected are employed outside the Washington area, he said. Military personnel are exempt from the budget reductions known as sequestration.

Hurting Contractors

Sequestration also would hurt defense companies, he said.

“It’s going to affect their business, affect their financial standing,” Carter said. “It’s going to affect their stock market positions. It’s going to affect their employees.”

“I hope the Congress understands it’s going to affect each and every state and district,” he said.

The military services have been given a Feb. 8 deadline to outline specific steps they will take if sequestration occurs, Carter said. The across-the-board cuts would be in addition to a $10 billion decrease for operations and maintenance required by stopgap spending legislation that provides Pentagon funding through March 27.

Carter said that if the temporary funding legislation is extended and sequestration takes effect as well the military will face a “pervasive crisis” in readiness.

Army Readiness

Two-thirds of the Army’s active-duty combat brigades will be at reduced readiness, he said. The service has directed a 30 percent reduction in base operations spending compared with fiscal 2012, he said.

The Navy is planning to defer maintenance and repairs on 30 vessels later this year, he said, and the Air Force will do so for 250 aircraft.

Carter said the Pentagon hopes to “protect the integrity” of the $4.9 billion fixed-price contract for Boeing Co. (BA)’s KC-46 tanker.

“We are working to make it the case that sequestration doesn’t force us to abandon that acquisition approach, but we are not sure we are going to be able to do that,” Carter said.

Weapons and research development programs face about a 9 percent across-the-board reduction under sequestration. Carter said it’s unlikely contracts already funded would be canceled because the automatic cuts don’t apply to “obligated funds.”

“You have 9 percent of your money gone and you have to work around that,” he said. “But there are examples where 9 percent might make a critical difference.”

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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