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Obama Said Ready to Exempt Military Personnel From Cuts

Obama Said Ready to Exempt Military Personnel From More Cuts
The Pentagon’s $526.6 billion budget request for the fiscal year beginning Oct. 1, not including war funds, would provide $137.1 billion to cover pay, incentives, moving allowances and funds set aside for military retirement. Photographer: SeongJoon Cho/Bloomberg

Aug. 8 (Bloomberg) -- The Obama administration will notify Congress as soon as tomorrow that it will once again exempt military personnel from the automatic budget cuts known as sequestration, according to two government officials.

Defense Secretary Chuck Hagel this week sent President Barack Obama a memo outlining his request for the exemption for fiscal 2014 and the rationale, said the officials, who asked not to be identified before the notification is issued.

The Pentagon’s $526.6 billion budget request for the fiscal year beginning Oct. 1, not including war funds, would provide $137.1 billion to cover pay, incentives, moving allowances and funds set aside for military retirement.

Obama exempted military pay and benefits from this year’s cuts, which took effect in March. The Pentagon is being required to cut $37 billion by the end of the current fiscal year on Sept. 30.

Of that, $20 billion of which will come from operations and maintenance accounts and $17 billion from weapons research and procurement. The Pentagon faces $52 billion more in sequestration reductions for fiscal 2014.

Hagel warned last week that the Pentagon will be forced to choose between a decade-long “modernization holiday” and a “much smaller” force if the military has to absorb cuts adding up to more than $500 billion over a decade.

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

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