August 09, 2011

Jobs Issue Plays Into Defense Cuts Argument

It's the Pentagon's job to argue in the interest of national security. But these days, as it protects a country reeling from economic problems, the Defense Department may need to argue for American jobs too.

Making his first appearance before the press since taking over the Pentagon, Defense Secretary Leon Panetta Thursday warned against the possibility of more cuts to his department's budget. Panetta and Joint Chiefs of Staff Chairman Mike Mullen focused their message on what future defense spending cuts might mean for national security. But, Panetta, putting on his “old budget hat” as the former budget director put it, and Mullen also touched on an important point: that soldiers and civilians who work in and around the defense community are employees who rely on a paycheck just like the rest of Americans.

"The Pentagon realizes how serious this is, and they are coming with their strongest message," says Travis Sharp, a fellow at the moderate Center for a New American Security. "A year and a half before an election which will largely turn on the issue of unemployment, for the defense secretary to come out and say [that] these defense cuts could potentially lead to greater unemployment is a shot across the bow and a warning that the Pentagon budget is not to be cut without consequences."

Panetta said Thursday that the long-term defense budget cuts reached by the recent debt ceiling deal were "within the ballpark" of his department's expectations. But there's a fear that if the congressional "supercommittee" in charge of slashing more spending later this year hits the Pentagon too aggressively, or, worse, if they don't reach an agreement at all and severe across the board cuts are triggered, there could be serious national security repercussions. And given the fact that further cuts would most certainly require reductions in military employees, weapons, or both, there's a strong likelihood that they could influence the nation's near-term economic outlook as well.

The economy figures to be top on voters' minds heading into next year's elections. So, for those, like Panetta, who want to maintain national security budgets, framing defense cuts as an employment issue could be politically effective, especially with lawmakers up for re-election. "Arguing against the negative scenario of rapid cuts in personnel makes sense, because obviously a lot of people are worried about our debt and deficit, but a lot of people are also worried about short-term to medium-term unemployment, and if you address the first by worsening the second, I'm not sure most Americans will see that as a net plus," says Michael O'Hanlon, a senior fellow at the left-leaning Brookings Institution.

If across-the-board cuts do come, Sharp guesses that military weapons and equipment, rather than personnel, will go first. "Members of Congress are really loathe to cut military personnel benefits or pay, especially when we're in the middle of two wars, and you've got a whole generation of service members who have signed up or reenlisted over the last decade with the expectation that their service was going to result in increased financial security," he says. "If that sacred trust were to be violated, particularly in an economic downturn, then the political consequences of that would be enormous for lawmakers."

Even so, any decrease to weapons and technology funding would be a blow to the military contractors in the private sector and the people they employ too. Top defense contractors, like Lockheed Martin, have already announced significant layoffs due to decreased defense funding. And O'Hanlon says that such a reduction in technology and weapons could be equally harmful from a national security perspective. "It's not as if, hypothetically, you could have your cake and eat it too by cutting the Pentagon budget, protecting all the official military jobs in and out of uniform, and then cutting weapons budgets precipitously. It's not as if that would work either, because that's going to drastically reduce all the contractor and private company jobs," he says. "Those capabilities are every bit as fragile as the excellence of our men and women in uniform."

Politically, by using the jobs argument, hawks on the right could very well get some Democrats, who are concerned with getting unemployment under control before the 2012 election, to ally with them in defense of Pentagon spending. Or, at the least, it could be a strong political attack against anyone, from either party, who is adamant about cutting national security funds.

Either way, the Pentagon has some tough decisions ahead as it cuts back its spending, and depending on the actions of Congress, they could get tougher.