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White House to Exempt Military Personnel From Automatic Cuts

July 31 (Bloomberg) -- The White House Office of Management and Budget informed Congress today that it will exempt from potential automatic budget cuts billions of dollars earmarked for military pay and benefits.

Office of Management and Budget Acting Director Jeffrey Zients, in a two-paragraph letter to lawmakers, said the exemption “is considered in the national interest to safeguard the resources necessary to compensate the men and women serving.”

About $135 billion is requested in fiscal 2013 for military personnel accounts that cover pay, incentives, moving allowances and funds set aside for military retirement.

“It is recognized that this action would increase the sequester in other defense programs,” Zients wrote.

“This means the administration will not lay off or reduce pay and benefits for any uniformed military personnel as a result of sequestration,” said Todd Harrison, a budget analyst at the non-partisan Center for Strategic and Budgetary Assessments in Washington.

“There will be no pink slips going out to troops but it also means other accounts which fund DoD civilian employees and contractors will have to be cut by even more,” he said. “DoD civil service workers may be the first to go. DoD would likely have no choice but to lay off or furlough 10 to 15 percent of its 790,000 civilian workers almost immediately after sequestration occurs,” Harrison 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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