Pentagon braces for budget cut hardship

February 4, 2013: 5:17 AM ET
pentagon budget cuts shipyards
The Navy has canceled maintenance of 30 ships at shipyards to prepare for March 1 budget cuts, according to the defense department, which is also letting go up to 46,000 temporary employees.
WASHINGTON (CNNMoney)

With no lifelines in sight, the Defense Department has started preparing for the reality of 9.4% budget cuts kicking in next month by laying off up to 46,000 temporary workers.

And the Pentagon says that's just the beginning.

Washington agencies are reluctantly dealing with the consequences of Congress' inability to stop massive spending cuts scheduled to begin March 1. The so-called "sequester" is expected to hit Defense particularly hard, slicing $490 billion from the department's budget over the next decade.

The defense industry has been preparing for the massive budget cuts for months -- a fact reflected by the 0.1% annual rate decline in the nation's economy in last year's fourth quarter. The contraction was largely due to a 22% drop in defense spending.

In March, the Pentagon will have to make due with $45 billion less, officials say.

Defense Secretary nominee Charles Hagel told a Senate confirmation hearing Thursday that the cuts threaten military readiness, calling them "very dangerous" to national security.

Related: U.S. can afford $500 billion in (smart) defense cuts -- opinion

In a recent briefing with reporters, Deputy Secretary of Defense Ashton Carter gave more details of Pentagon preparations. Besides laying off the temporary workers:

-- The department has a civilian hiring freeze in place, which is a big deal for an agency that hires 1,000 to 2,000 a week.

-- The Navy has canceled plans to tune up 30 ships scheduled for maintenance later this year.

-- The Air Force is only entering into short-term contracts for supplies.

-- The Navy has cut all conferences and nonessential travel, according to a Navy memo.

If the budget cuts actually kick in, some 800,000 employees will have to stay home -- and with no pay one day each week -- from late April through September. That amounts to a 20% pay cut for civilian workers.

"Obviously, this is a terrible thing to have to do to our employees and to the mission," Carter said. "But it's necessary, because it'll save $5 billion. We have to find that money."

When the budget ax falls in March, high-profile, popular military programs will likely be canceled through Sept. 30, including Blue Angel shows and Fleet Weeks, according to a Navy memo.

The cuts to some parts of Defense end up being higher than 9.4%, because President Obama has exempted military personnel and veterans' affairs from the sequester.

And Pentagon staff points out that the cuts and furloughs are devastating to veterans, who make up 44% of the agency's civilian workforce.

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