Defense told to delay contracts, prepare for furloughs amid budget uncertainty

January 10, 2013
leon panetta
Defense Secretary Leon Panetta (Mark Wilson/Getty Images)

Defense Secretary Leon Panetta said Thursday that he has told managers to freeze civilian hiring, cancel and delay some contracts, curtail training and some maintenance and prepare for unpaid furloughs because of uncertainty over the federal budget.

With the agency operating under a stopgap budget through at least March — which holds spending to fiscal 2012 levels — and the threat of drastic automatic spending cuts looming for almost two more months, the uncertainty is forcing short- and longer-term reductions, he said.

Panetta said the cuts should minimize effects on military readiness, but acknowledged that the Defense Department must prepare for the worst.

The Pentagon is facing a spending reduction of nearly $500 billion over a decade. An additional $110 billion in cuts to military and domestic programs will take effect in March if Congress and the White House cannot agree on a plan to take down the federal deficit beyond the tax increases they agreed to in the first hours of the new year.

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Josh Hicks | January 10, 2013