Sequestration Will Have Far Reaching Consequences, Warns Panetta

With the threat of sequestration looming, Defense Secretary Leon Panetta warned a Senate Appropriations subcommittee Wednesday that allowing the automatic defense cuts to take place will have consequences beyond a constrained military.

Although noting that “the Defense Department is not a jobs program,” Panetta acknowledged that the cuts could result in a one percent increase in the nation’s unemployment rate.

“That kind of sequestration cut across the board will have a serious impact, not only on our men and women in uniform, but our personnel and the contractors that serve the Defense establishment,” Panetta said.

The Secretary also confirmed that the lay-off notices from contractors would have to come at least 60 to 90 days before they take place, meaning they will arrive closer to the November Presidential election than many Democrats would like.

Panetta broadly described the cuts as an impending “disaster.”

“It was designed to be a disaster, because the hope was that it would be such a disaster that Congress would respond and do what was right,” Panetta said. “I’m just here to tell you, yes, it would be a disaster.”

Sequestration, which will guarantee half a trillion in cuts among Defense spending, was the byproduct of last summer’s debt ceiling negotiations. In order to prevent the U.S. from defaulting on its loans, Congress established a committee dedicated to finding $1.2 trillion in spending cuts or risk having across-the-board cuts in Defense and non-defense spending.

The committee failed to come to an agreement by their fixed deadline last November. The cuts are currently scheduled to take place in early 2013.

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