Sequester Will Likely Affect Military Spending In Alaska

Unless Congress creates and agrees to a viable plan to reduce trillions of dollars from the deficit, the federal government will face massive cuts January second. The cuts, known as the sequester, will slash $1.2 trillion from federal agencies.

The deeply-unpopular sequester will send ripples through virtually every element of government. The cuts at the Pentagon could shock military spending in Alaska – both in the public and private sectors.

As part of the Budget Control Act of 2011, the Pentagon lost $487 billion dollars. And it planned on that, crafting its defense policy to reflect leaner times.

There was a second part of the Budget Control Act – one that stipulated if the super-committee could not find agreement on deficit reduction, the federal government would cut an additional $1.2 trillion of spending. And about $500 billion of that sum will come from the Pentagon.

Secretary of Defense Leon Panetta has not hid his frustration, anger, and worry. Here he is speaking at a dinner in Washington in June.

“It will pose, if it happens, and I’ve made this clear, an unacceptable risk in our ability to defend this country. Make no mistake: It will hollow out our force, it will weaken us at the very moment the United States needs to remain the strongest military power on Earth,” Panetta said.

But many think the Pentagon could use a right-sizing of what they a call a bloated budget.
Ben Freeman is an investigator with the nonpartisan Project on Government Oversight. He says the cuts would reduce Defense spending by about $54 billion a year.

“We spend far more than any of our enemies or our would-be enemies. So to say that we’re just going to cut 10 percent off of our budget, we’re still going to spend more than any other country in the world,” Freeman said.

Still, Freeman says sequester is not the right approach.

Specifics of just what the cuts mean to military operations and base life are hard to come by. Representatives from JBER, Fort Wainwright and Eielson Air Force Base all said they are waiting on guidance from the Pentagon.

And Lieutenant Colonel Elizabeth Robbins, a Pentagon spokesperson, says Defense is waiting on guidance from the Office of Management and Budget. That could come as soon as Thursday.

“It will force the release of temporary civilian employees and impose at least a partial hiring freeze, and potentially unpaid furloughs for our Department of Defense civilian personnel,” Robbins said.

President Barack Obama exempted military personnel from the cuts. The 21,000 members of the military in Alaska will not lose their jobs or see a reduction in pay.

But the Pentagon still needs to plan on losing 10 percent of its budget. So the cuts to non-personnel spending will be even larger. Colonel Robbins says Congress needs to pass a law to stave off what she calls a disaster.

“We know that it will universally disrupt our acquisition programs and our training programs, reducing base support services, delaying payments to medical service providers,” Robbins said.

Much of that gets done outside government. The Department of Defense spent $3 billion last year in Alaska on private contracts. The biggest recipient was Crowley Petroleum Distribution. Its headquarters are in Florida, and the company supplies the military with fuel. Its Alaska contracts in 2012 are worth more than three hundred million dollars.

Eighty percent of Defense contracts in the state went to Alaska Native owned businesses, like Petro Star. Petro Star, a subsidiary of the Arctic Slope Regional Corporation, also supplies the military with fuel. Since the beginning of 2012, Petro Star has been awarded contracts worth $200 million.

No one from the companies was comfortable commenting on what potential cuts to the Pentagon would mean for business. Ben Freeman says more than half of the Pentagon budget is spent on contracting. And because of the exemption for military personnel, contractors can expect less business.

But he says even if all of the cuts went directly towards contracts, the industry would still take in more than $300 billion a year.

“If you think $300 billion a year is catastrophic, you need a wakeup call,” Freeman said.

It’s not just contractors who could feel the pinch. So could civilians who live near bases, from the cashier at the grocery store, to the carpenter who planned on doing work to a base employee’s house.

And weapons systems may come under even more scrutiny. In Alaska, Freeman says the F-22 should be in the sights of budget-cutters. It’s never flown in combat, it’s expensive, and pilots complain of the planes’ affects on their health.

“If you have a plane that you’re not really using to defend the nation, and it costs $50,000 an hour to fly, I think that’s certainly a ripe candidate for some budget cuts,” Freeman said.

But most think that’s not how the sequester will work. Top brass at the Pentagon may not go through and find wasteful programs. They may reduce each program by a flat rate. And anyone associated with the military – enlisted members, contractors and civilians – is likely to see changes; and until the Pentagon lays out what they are, everyone is left in the dark.

Download Audio