Deputy Defense Secretary Ashton Carter plans to stay in his post under the next secretary of defense. (Rob Curtis / Staff)
The Pentagon has issued guidance to prepare for as much as $50 billion in automatic cuts this year unless Congress approves a deficit reduction package, mainly the spending measures, by April. Hiring has been frozen, travel and training reduced; civilian worker furloughs, program cuts and contract delays may follow.
The guidelines came days before lawmakers edged toward a compromise to avert the so-called fiscal cliff, with House Republicans agreeing to suspend the debt ceiling in exchange for Senate Democrats agreeing to pass a budget. All this comes as Defense Secretary Leon Panetta prepares to retire and former Nebraska Sen. Chuck Hagel awaits Senate confirmation to take his place.
Working for Panetta is Deputy Defense Secretary Ashton Carter, who served for more than two years as Defense Department acquisition chief where he drove acquisition, logistics and efficiency reforms to generate savings to offset some of those cuts. Carter became the deputy in October 2011.
Q: You were an integral player in preparing all the guidance that’s gone out to prepare for budget cuts. The critics have said that this should’ve been done a long time ago, both to better prepare the cuts but also to glaringly illustrate to lawmakers why avoiding sequestration is the best thing. Why now? What changed?
A: What’s changed is that we’re coming up to the moment in time in which, first of all, sequestration [will take effect] in less than two months time. Also, we’re on a continuing resolution, which means we are stuck with the budget of last year category by category. And as the year goes on, then you have less and less time to adjust to that. Now, the reason not to make adjustments too early is these are not desirable things to do. They’re not good for defense, and you don’t want to do them until you have to. So we, for each one, are trying to balance acting too early against acting too late.
So let me give you an example. We are now starting to freeze hiring civilians. We hire in the department 1,000 people a week in order to keep our numbers up, and we would like to continue to do that. However, if I worry that I’m going to run short of money later this year, I’d better stop hiring. Now, that’s not a good thing. Forty-four percent of the people we hire are veterans, and we care about hiring veterans. Of course, most importantly, we care about getting the work done. These are not bureaucrats in Washington when I talk about civilians. These are shipyard workers; these are people who do important things. So we didn’t want to take that step until it became too late, until the balance of caution showed in another direction. And that’s why we waited to act until now.
Now we’ve been planning for some time and we’ve been doing that quietly because we haven’t wanted to act as though sequestration or any of these things was either inhibitable or certainly something that we could manage with ease. These are damaging and destructive things.
Q: Why are some of these cuts being implemented immediately?
A: Well, we’re taking every step that we think is prudent now [with] the expectation that the continuing resolution might be extended a whole year where sequestering might happen. So what we’re trying to do is take steps that are reversible that are harmful if they last the whole year. If I take them now, I’ll be better off later in the year. Let me give you an example. We’re canceling some maintenance of ships. I’m canceling those contracts. Now, if later in the year the money comes through and all of this disaster about sequestering doesn’t happen, I’ll go ahead and do that maintenance. But a cancellation for me is reversible. Later in the year, I’m going to have to do things that are irreversible, could [cause] irreversible harm. Obviously, you don’t want to do that, furloughing people, laying them off.
Reducing training will have the consequence in the near term that units won’t be ready to go to war. We’ll spare the ones going to Afghanistan, but the ones that are available for other contingencies, if it goes on long enough, it will do damage to readiness that will be difficult, take years to reverse. And so we don’t want to take that kind of step until we absolutely have to.
Q: With the $487 billion that was cut through the Budget Control Act in 2011, with the likelihood of other cuts on top of that, Panetta has repeatedly said no, that’s the plan, that’s what we’re going to plan for. But doesn’t prudence dictate that you start planning for that now?
A: We believe that we have now a strategy and resources that are well matched up, and we understand that people are wondering what’s going to be the next move in the overall budget. But we have a very solid matching of our program to what the country needs to the budget. And as people make decisions in the next round, they need to see what it is that the country needs for defense, and that’s what we’re showing them and it’s carefully thought out.
Q: By this point, you already would’ve been building the defense budget. It would be going to the Congress in the beginning of February. Obviously, that’s been delayed. How are you going through the process of building a 2014 budget plan at this point when you have basically no guidance coming to you?
A: We know that down the road the country’s going to be dealing with the fiscal cliff. We are building now our budget for next year according to a plan that was in the budget rollback, which took that $1 trillion out of defense. We’re building to that plan now. We will be ready for other contingencies. We’re very good at that in this department. But I think that when people see how much we already have absorbed in the way of budget cuts, including working to make the defense budget as efficient as we possibly can, they’ll see that there’s a real price.
Q: You’re going to have a new boss soon, you’re staying on. My understanding is President Obama has asked you to stay on. What are some of the roles you see? How do you see your role changing under Chuck Hagel if he’s confirmed?
A: Well, I had a great relationship with Secretary Panetta and I think, first of all, I’m his alter ego and that’s the job of the deputy, to be alter ego to Secretary Hagel, if he becomes Secretary Hagel. Secondly, I do a lot of the day-to-day management of the department for the secretary. And third, I try to organize his decision-making so that he and the president can make decisions on the basis of the best possible information. That’s what I do.
Q: One of your fullest priorities is to drive efficiencies in the department. And in the last budget, when you were acquisition chief, you worked this methodically, account by account by account, in order to sort of free money up to offset cuts that you were anticipating coming down the pike. There was $65 billion in this budget that you hope to be able to recoup. Where are we on that process?
A: Well, if we expect the taxpayer to give us the money that the country needs to defend itself, we can’t only be out there explaining what we need. We need to be showing that we’re using every single dollar well. That’s what this is all about. What we have done is identify funds that we think could be spent in a better way, and we’ve taken that money out of the budget. And so now, we’re going to have to execute to that adjusted budget. We’re going to have to walk the walk, not just talk the talk of savings. That’s cost discipline. Look at our fiscal situation, look at the overall national situation. Every defense dollar has to be used well.
Q: In the past, you have said that you were kind of on track with that. Where are you on the metrics?
A: We follow it. I have meetings on it in which everyone who has been given such a target has to come in and explain to me where are they in achieving that target. So we’re keeping the pressure on with each and every dollar. Because every dollar we save can be used somewhere else to buy an aircraft or a ship to operate somewhere in the world where forces are needed. So we have to do that.