Hearing of the Senate Budget Committee - The Impact of Sequestration on National Security and the Economy

Hearing

"This hearing will now come to order.

"I'd like to thank Ranking Member Sessions -- and all my colleagues here for joining me today.

"I would also like to thank our witnesses, Bob Work, CEO of the Center for a New American Security, Mark Klett, President and CEO of the Klett Consulting Group, Jennifer Green, a secretary at Madigan Army Medical Center in my home state of Washington, Baker Spring, F.M. Kirby Research Fellow in National Security Policy at the Heritage Foundation, and Tom Donnelly, Co-Director of the Marilyn Ware Center for Security Studies at the American Enterprise Institute.

"Thank you for joining us for this critical discussion today on the impact of sequestration on our economy and our national security. Sequestration is having serious impacts across the federal budget, but today I want to focus on the automatic cuts and future spending reductions that impact defense spending specifically.

"As the daughter of a World War II veteran, I believe we have a sacred obligation to keep the promises we've made to our men and women in uniform. They deserve our support while they serve, as well as when they come home.

"But unfortunately, the indiscriminate cuts from sequestration are threatening our fragile economic recovery, as well as our national security.

"At a time when too many Americans are still struggling to find work, civilian defense employees are being furloughed, and small businesses are struggling to stay afloat, our economic recovery and our military preparedness is suffering.

"While I believe there are responsible spending cuts to be made in defense programs--the current across-the-board cuts and future arbitrary spending reductions over the next 8 years as part of sequestration are not the answer.

"Especially during this time of global uncertainty, we need to maintain a strong national defense that allows us to meet today's international threats, and be prepared for those of the future.

"And, we need to be investing in job creation and long-term economic growth-- not causing furloughs that in turn will hurt families and the economy, as well as small businesses and service members alike all across the country.

"Defense sequestration is hurting small businesses like Mr. Klett's, which does work on critical areas like cyber security and the new aircraft carrier. Mr. Klett's company has lost a substantial portion of its income and has been forced to lay off 30 percent of the staff. He has even reduced his salary so he is now one of the lowest paid employees in his company, in order to keep his workers on payroll as long as possible. Even though his company is a service-disabled veteran owned small business, and even though they do work important to our national security efforts, they are not protected.

"Sequestration is also impacting people like Ms. Green. Ms. Green is dealing with furloughs and the loss of at least 20 percent of her income for the rest of the fiscal year, while still doing her own work as well as filling in for a second full-time position in another department. On top of all this, she is a single mother and a full-time college student dealing with high health insurance premiums, college costs that are not all covered by her Pell grants, and daycare on the base for her son that, because of sequestration, can't stay open late enough.

"Mr. Klett, Ms. Green, you are both sacrificing immensely and doing your best to get through some difficult times. We all thank you and admire your determination.

"I hope my colleagues take note of your examples, because there are other parents, students, and business owners struggling to make it through in every one of our home states. And if sequestration continues next year, there will be many more stories like yours.

"Sequestration isn't just impacting individuals and their families. Those cuts will also have serious national and international consequences if they are allowed to continue.

"Earlier this month Secretary Hagel sent a letter to the Armed Services Committee describing some of the expected impacts if sequestration happens in fiscal year 2014 and DoD is forced to cut another $52 billion. For DoD personnel, civilian employees would face continued furloughs or layoffs, and a hiring freeze could remain in effect. For military members--involuntary separations, a freeze on promotions, and other actions would be required.

"Training, which keeps our forces the most capable in the world, would also see dramatic cuts. For instance, earlier this year, the Air Force was forced to ground a third of its squadrons. They just managed to redirect some funds to get those squadrons flying again, but, under a fiscal year 2014 sequester, that work would be undone and an even larger percentage of Air Force squadrons would be grounded.

"Critical research and development of new tools to maintain our technological advantage and better protect our service members would also be cut dramatically. All while our competitors around the world increase their investment to try to reduce the advantage we have now.

"Secretary Hagel stated that if sequestration continues: "The Department will have to make sharp cuts with far reaching consequences, including limiting combat power, reducing readiness and undermining the national security interests of the United States.' He called on Congress to, "Pass a balanced deficit reduction package that the President can sign that would replace these deep and arbitrary cuts in FY 2014 and in future years.'

"Secretary Hagel also noted that this kind of comprehensive replacement would help not just DOD but many other agencies, including those with a role in supporting our troops and veterans. So I really hope that we can come together to address this in a bipartisan way.

"This is simply wrong--and it doesn't make sense. Our world remains a complex and dangerous place.

"With the end of the war in Afghanistan approaching, and the rebalance to Asia beginning--this is not the time to allow irresponsible defense cuts to impact our security.

"In Secretary Hagel's letter he warned that if sequestration remains in place for Fiscal Year 2014 and beyond -- "The size, readiness and technological superiority of our military will be reduced, placing at much greater risk the country's ability to meet our current national security commitments.'

"But it is critical to understand that we are only just beginning to see the impacts of these cuts. And as we all remember--they were never intended to be implemented. Sequestration was meant to be so terrible that both sides would come to the table and compromise.

"Democrats and Republicans spent a lot of time over the last two years talking about how devastating these cuts would be. A number of my Republican colleagues traveled around the country to talk about the ways that sequestration would "hollow out the military.'

"And Republican Members of this Committee joined Democrats in saying that the cuts from sequestration should be reexamined by Congress. But despite all of our efforts, and despite Democrats' willingness to make some tough decisions to find responsible savings to replace sequestration, we haven't come to an agreement yet.

"And if sequestration isn't replaced, the effects on our economy and our national security over the long-term will only get worse.

"Cuts to other parts of our budget also make us less secure. For example, our international trade not only helps the economy, but it also creates stability around the world. But sequester cuts to commerce and agriculture put that in jeopardy.

"Cuts to foreign affairs hurt critical work to build stability, create good will towards America, and defuse conflict. Ultimately, as experts like General Mattis have testified, and as we will hear more about today, that retreat from the world will make us more vulnerable.

"House Republicans will say they are adhering to the BCA with their budget, but we all know they're doing the opposite, and replacing sequestration only for defense.

Senate Democrats, on the other hand, have said if we replace sequestration for defense we also have to protect the Departments of Veterans Affairs and Homeland Security, the FBI and other law enforcement agencies, and vital efforts to ensure our competiveness through investments in education, innovation and infrastructure, from deep, unsustainable, and often arbitrary cuts over the next eight years.

"Both the House and Senate appropriation allocations require a replacement of sequestration to prevent another round of across the board cuts.

"So I hope my colleagues on both sides of the aisle are ready to work together to address this and end this arbitrary system that hurts our prosperity. Because we all know we can replace these cuts with smarter choices that are better for our national security and long-term growth, as well our fiscal health.

"And it should be clear that we need to work together to invest in keeping America strong and secure. And to keep the promises we've made to our veterans that their country will be there for them when they come home.

"We owe it to the American people to come together around a real and comprehensive solution to this problem that is hurting our economy, our national security, and our families and communities.

"We can't afford to keep these cuts around for ten more years. And we can't keep governing from crisis-to-crisis.

"I especially appreciate the views of members like Senator McCain, and so many others on his side of the aisle, who have joined us in that simple request -- that we return to regular order, start a bipartisan budget conference, and work together to tackle the challenges we face.

"There is bipartisan agreement that sequestration is the wrong way to cut spending--and bipartisan agreement that something needs to be done to fix it. So there is absolutely no reason for us to get closer and closer to October 1st--and closer and closer to another manufactured crisis--before getting to work on a solution.

"It won't be easy, but the families we represent are looking to us to end the constant artificial crises and political brinksmanship that is threatening our fragile economic recovery and our national security--and work together to replace sequestration responsibly.

"So I am glad we are able to have this important discussion today, and I thank all of you for being here to be a part this conversation. I'm going to have to step out to address a couple things on the Senate floor, so I will have to pass the gavel shortly.

"But these are critical issues, and we very much need your perspectives, so I am very much looking forward to your thoughts.

"But first, I will to turn it over to the ranking member, Senator Sessions, for his opening statement."

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