The Pentagon's top procurement official is confident that the Congressional sequestration manoeuvre mandated by the Budget Control Act can be averted before it goes into effect on 2 January, 2013. If the sequestration were to go into effect, it would mean that the US defence budget would be automatically cut by about $50 billion every year for the next 10 years.
"I do believe that it won't happen," says Pentagon procurement Chief Frank Kendall, speaking at a conference sponsored by Credit Suisse in New York. "I'm fairly confident that we'll avoid it."
What might happen, Kendall says, is that a temporary agreement might be reached in Congress which postpones the deadline. A final deal would then have to be worked out in January or February. "I would like to see it solved sooner," Kendall says.
Kendall is adamant that any further reduction to the US defence budget beyond the $487 billion already cut earlier in this budget cycle would have a "severe impact" on the Pentagon. In that case, the Department of Defense (DOD) would have to go back to the White House and ask for further guidance on which capabilities the US military would retain and which it could divest. The DOD has already been cut back as much as it can be without adversely affecting the country's fundamental military capabilities. "We're on the edge," Kendall says.
But if sequestration were to be enacted, it would immediately impact unobligated prior year balances and all fiscal year 2013 money, Kendall says. It would also impact every single account except military personnel pay. But it would not be akin to falling off a cliff. "It's not going to happen overnight," Kendall says.
But exactly how that would come into being has yet to be determined. The DOD is still waiting on guidance from the White House on how the sequester would be executed. "We have not done detailed planning," Kendall says.