The Senate Armed Services Committee chairman predicted Thursday that Congress will find a way to avoid automatic budget cuts in January that could hurt national security, but he added that any ultimate budget agreement won’t leave the Defense Department unscathed.
Pressure is building, particularly within the defense industry, to head off the automatic across-the-board budget cuts scheduled to take effect in January under terms of last year’s Budget Control Act.
Beginning as early as October — perhaps sooner — layoff notices could be delivered to defense industry workers, and possibly to some DoD civilian employees, as officials prepare for the possibility that Congress and the White House won’t come up with a compromise to avoid the automatic cuts.
Sen. Carl Levin, D-Mich., who has chaired the armed services committee since 2007, said Thursday during a breakfast with defense reporters that he believes sequestration will be avoided in January, although he isn’t sure how — or when an agreement might be reached.
He said he is optimistic about avoiding the cuts, which could reduce defense spending by 10 percent, or about $55 billion, next year, “because 80 to 90 percent” of members of Congress want to prevent sequestration.
Levin is concerned, however, that harm may result from waiting for lawmakers and the White House to reach the almost inevitable post-election, last-minute agreement to either avoid or postpone the budget cuts.
Even if agreement is reached, he said, “If it comes too late, the specter of it could have a negative effect on the economy and on people’s lives.”
Levin is pushing the idea of a pre-election bipartisan announcement of the intention to come up with a later budget agreement. He said such an announcement might soothe the stock markets and reassure the public, and could include some details on areas where lawmakers agree, such as extending middle-class tax cuts.
The House of Representatives has passed a budget plan that would avoid sequestration while also reversing the cuts in defense approved last year as part of the Budget Control Act, but Levin discounted that plan as unworkable.
Defense cuts, he said, will have to be part of any final agreement to achieve $1.2 trillion in deficit reduction over 10 years. He suggested a plan that would include about $200 billion over 10 years in cuts in discretionary spending, with half coming from defense. The impact of a roughly $10 billion annual reduction in defense spending would be far less than the consequences of sequestration.
Levin declined to specify how that $10 billion savings could be achieved, saying providing details at this point would not make it easier to get an agreement.