JACKSONVILLE, Florida (REUTERS) - Defence Secretary Chuck Hagel said on Tuesday that a new round of automatic spending cuts next year would force the department to cut personnel and that he already has decided to reduce jobs in the offices of the Pentagon's top leadership by 20 per cent.
Mr Hagel, speaking to aircraft maintenance workers at Naval Air Station Jacksonville, defended his decision to put civilian workers on unpaid leave for 11 days through the end of the fiscal year on Sept 30, saying further cuts in other areas could have jeopardized military readiness.
Some 6,900 civilians at the base had their first day of unpaid leave last week, including 2,700 at the maintenance facility, officials said. That amounts to an effective 20 per cent pay cut through the end of the fiscal year.
The defence secretary, who is on a three-day "listening tour" to talk to personnel at bases across the southern United States (US), painted a sobering picture of the uncertainty hanging over the department as a result of automatic budget cuts known as sequestration.
The cuts, ordered by the White House and the Congress, reduced Pentagon spending by US$37 billion this fiscal year, prompting the unpaid leave and other cuts. They are likely to cut US$52 billion (S$46.8 billion) from defence spending in fiscal 2014.
Responding to questions from the workers, Mr Hagel said an additional US$52 billion in cuts in fiscal 2014 would inevitably require a reduction in the Defence Department's workforce.
"This is not a good way to do it," he said. "You don't save any money at the front end when you RIF (reduction in force) people. In fact it costs you more money. It's just a dumb way to do things. Sequestration is an irresponsible deferral of policymaking. But we are where we are." Mr Hagel said he and Army General Martin Dempsey, the chairman of the Joint Chiefs of Staff, had decided to implement a "20 per cent across-the-top cut in our offices."
He said later the 20 per cent cut would also affect the staffs of the combatant commanders and would be implemented in the 2015-2019 time frame.
"That isn't going to fix the problem," he said. "But... everyone's got to do their part."
The secretary said cuts could eventually affect compensation packages, such as retirement benefits, healthcare and pay, which combined represent about half of the Defence Department's budget.
"That's not going to go untouched," he said. "You don't get the money in the overhead of the office of the secretary of the Defence Department. You need billions and billions of dollars."
Speaking later at a luncheon with members of the Jacksonville Chamber of Commerce, Mr Hagel said he was not optimistic about Congress and the White House reaching an agreement to avert the next round of budget cuts.
"I don't see a lot of hopeful signs that this is going to be resolved," he said.