Sequestration Or Not, U.S. Firms, DoD Will Take a HitSubmitted by emalvini on Mon, 11/26/2012 - 10:25
DefenseNews.com: Even if the U.S. Congress is able to hammer out a debt deal that avoids sequestration in January, the resulting agreement will likely result in billions of dollars in additional cuts to the Defense Department — perhaps as much as $25 billion — likely forcing the military to alter its roles and missions.
Internally, some of the nation’s largest defense companies are also planning for a possible $25 billion cut annually from current spending levels. That $25 billion is half of what DoD is expected to absorb annually under sequestration. This month, Boeing announced a major reduction among its executive ranks as it prepares for a decline in U.S. defense spending.
“If they come up with a deal to avert sequestration, I think the defense portion of that deal will be cuts [at] about half the level that sequestration would require,” said Todd Harrison, an analyst with the Center for Strategic and Budgetary Assessments.
But the cuts, under a debt deal, would likely be distributed differently than under sequestration.