Navy, contractors have much to lose if automatic cuts kick in
By ED FRIEDRICH | Kitsap Sun | Published: November 5, 2012
BREMERTON, Wash. — The Navy stands to lose $12 billion next year in across-the-board cuts if Congress can't agree to a deficit-reduction plan by the end of the year.
Adm. Mark Ferguson, vice chief of naval operations, wrote Sept. 23 that the reductions, through a mechanism called sequestration, would mean fewer flying hours for Navy aircrews, fewer training days for ships and submarines, and less fleet maintenance.
"Potential cuts or reductions beyond those already taken in this year's proposed budget will result over time in a smaller force with less presence, longer response times and reduced ability to provide surge forces in support of our major war plans and other emergent needs," Ferguson, the second highest-ranking officer in the Navy, wrote in a blog post summarizing remarks he made before the House Armed Services Committee.
Ferguson said there would be "difficult choices" regarding fleet maintenance, ship purchases and base support services.
The Department of Defense will lose $487 billion over the next 10 years as part of the Budget Control Act of 2011 that seeks to harness a $17 trillion national debt. Sequestration would add $500 million on top of the $487 billion.
Sequestration was never meant to be implemented. It was intended to scare the congressional Joint Select Committee on Deficit Reduction into proposing how to reduce the deficit by $1.2 trillion, but the Republicans and Democrats couldn't reach a compromise.
The president was required to submit a report to Congress on potential sequestration cuts. The White House Office of Management and Budget released the report Sept. 14. It breaks down what accounts are exempt and nonexempt, and estimates required funding reductions.
Sequestration would result in a 9.4 percent reduction in defense funding, the report says. The president specifically exempted veterans and personnel accounts from cuts.
"The report leaves no question that the sequestration would be deeply destructive to national security," it reads.
"While the Department of Defense would be able to shift funds to ensure war fighting and critical military readiness capabilities were not degraded, sequestration would result in a reduction in readiness of many nondeployed units, delays in investments in new equipment and facilities, cutbacks in equipment repairs, declines in military research and development efforts, and reductions in base services for military families," the report states.
The Navy's largest sequestration cuts in fiscal year 2013 would be $4.3 billion for operations and maintenance, $2.2 billion to buy aircraft, $2.1 billion to build ships and $1.8 billion for research and development.
Total military cuts next year would be $54.7 billion, according to the 394-page report.
Many, including the military, which hasn't begun planning for the cuts, don't believe sequestration will happen. President Barack Obama said in a presidential debate that it won't. The OMG instructed agencies in July to continue normal spending and operations. But Congress, which is on a seven-week break for the November elections, won't be returning to work until the week of Nov. 10 and will have only a short time to reach a deal before the end of the year.
Ferguson, the vice chief, said Oct. 22 that the Navy will start planning for across-the-board sequestration cuts in late November or early December if Congress hasn't acted. They would go into effect on Jan. 2. Spending will continue normally until then, at which time cuts would hit each account evenly. He said there's little planning that can be done.
Mary Anne Mascianica, spokeswoman for Puget Sound Naval Shipyard and Intermediate Maintenance Facility, said the command hasn't received any guidance from headquarters about dealing with sequestration. Neither has Navy Region Northwest, said spokesman Sean Hughes.
"We're all working to the budgets we know," he said. "They've been established for fiscal year '13 and we're looking at '14 as we understand it now."
U.S. Rep. Norm Dicks, D-Belfair, said he's going to stop sequestration if it's the last thing he does, in Washington, D.C. He's retiring at the end of the year after 36 years in the job.
"This is kind of my last hurrah," he said. "I'm doing everything I can to try to work with Democrats and Republicans to see how we avoid this thing."
There's bipartisan agreement that sequestration would be a catastrophic mistake, Dicks said, but there's a problem with them agreeing how to avoid it. The Congressional Budget Office has said sequestration would send the country back into recession, Dicks said.
The Center for Security Policy, a nonprofit, nonpartisan national security organization, released a report Oct. 8 showing estimated local economic impacts from defense budget cuts under sequestration. It listed cuts by contracting office and by product or service.
Work and services contracted out of Kitsap County in fiscal year 2011 totaled $708.7 million, according to the report. A 9 percent sequestration cut would be $63.8 million. The largest reductions would be to Engineering Field Activity ($28.0 million), Puget Sound Naval Shipyard and Intermediate Maintenance Facility ($10.8 million), Fleet Industrial Supply Center Puget Sound ($5.3 million) and Naval Undersea Warfare Center ($3.7 million).
The major types of work would be non-nuclear ship repair ($10.1 million), facilities operations support services ($6.4 million), aircraft carriers ($2.7 million) and architect-engineering services ($2.6 million).
Guy Stitt, president of AMI International, a Bremerton-based naval market analysis and advisory firm, said the military cuts could result in the loss of half a million jobs, including PSNS & IMF workers. An inability to keep up on maintenance could affect deployment schedules.
"Right now we have an operating tempo in our submarine force that's really high," he said. "To cut back on maintenance for them right now would be very rough."
Submarine procurement could be canceled, and the replacement of Trident ballistic missile subs delayed. There's also a psychological effect.
"What does this tell our military leadership and our troops, that we as national leaders don't have the respect for what they're doing to give them a defense budget," he said. "This is a slap in the face of our military that this is the process they're going to take to save money because they can't meet in the middle, they can't find consensus."