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Hagel Outlines ‘Abrupt, Deep’ Cuts of $52 Billion Ahead

Defense Secretary Chuck Hagel
Defense Secretary Chuck Hagel outlined his views on what he called “abrupt, deep” cuts under the process called sequestration in the letter to the Senate Armed Services Committee that was obtained today by Bloomberg News. Photographer: Andrew Harrer/Bloomberg

July 10 (Bloomberg) -- Defense Secretary Chuck Hagel said today that if faced with $52 billion in automatic cuts next year, the Pentagon would do its best to “seek management efficiencies and controls on compensation growth before making cuts to force structure, modernization and readiness.”

Even so, Hagel said in a letter to lawmakers, “funding for hundreds of program line items, large and small, would have to be cut significantly. We would be forced to buy fewer ships, planes, ground vehicles, satellites and other weapons.”

He outlined his views on what he called “abrupt, deep” cuts under the process called sequestration in the letter to the Senate Armed Services Committee that was obtained today by Bloomberg News.

The letter to Democratic Senator Carl Levin of Michigan, the commitee’s chairman, and Republican James Inhofe of Oklahoma, its top Republican, was in response to their request for information on the impact if automatic cuts continue next year, as will happen unless President Barack Obama and Congress renew moribund efforts to agree on an alternative budget-cutting plan. The Pentagon is absorbing $37 billion in reductions in the current fiscal year that ends Sept. 30.

The letter didn’t disclose steps Hagel is weighing under a “strategic choices and management review” that he has ordered.

“These options cannot avoid serious damage to our military capabilities,” Hagel wrote.

While defense contractors largely escaped cuts under sequestration this year, Hagel said that next year the Pentagon “would be forced to sharply reduce funding” by as much as 20 percent for procurement, research and development and military construction.

Reduced investments in weapons programs would cause disruptions that “would spill over to the defense industry,” where “jobs would be lost and, as prime contractors pull back to protect their internal work forces, small businesses may experience disproportionately large job losses,” Hagel 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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