Hampton@: Fiscal Uncertainty is Harming National Security

Dear Robert,

Congress rang in the new year with a political compromise to avoid what had come to be known as the fiscal cliff. While we avoided a tax increase on most Americans, we also pushed off once again many of the tough decisions required to get our country back on a responsible fiscal path.

If Congress and the White House are unable to agree on debt reduction measures by March, America will face a triple threat: a congressional vote to raise the debt ceiling, across-the-board spending cuts required by the sequester and the expiration of the law that keeps the government funded.

The dysfunction in Washington continues to drag down our recovery. It has added to consumer and business uncertainty, and it's keeping the economy in low gear.

The indecision also poses a significant threat to our national security. As it is, the Pentagon is operating on last year's budget. And this white-knuckle game of chicken over the automatic sequester cuts, in particular, could require the Pentagon to ground aircraft and call ships back to port.

If Congress fails to step up, these fiscal challenges will require Pentagon budget planners to find billions of dollars in savings almost immediately, with hardly any flexibility to prioritize the cuts.

Defense Secretary Leon Panetta appropriately has ruled out cuts to ongoing combat operations in Afghanistan, as well as cuts in pay and benefits for our warfighters. But that means automatic sequester cuts will dig deeper into other programs. As Navy Secretary Ray Mabus recently told me, "How can a shipyard deliver 92 percent of a ship?"

In Hampton Roads, automatic cuts could mean an immediate, multibillion dollar shortfall in Navy operations and maintenance. Already, plans are being made by the Navy to defer maintenance, including canceling ship repairs, for the second half of the fiscal year.

Additionally, procurement in major combat systems could be canceled - along with the significant per-unit cost savings negotiated as part of these multi-year contracts. For instance, the Pentagon negotiated nearly $4.5 billion in savings through a multi-year contract to build Virginia-class submarines - and those savings could be lost if the Navy disrupts the terms of the agreement.

The sequester was intentionally designed to be an unacceptable financial tool - an option no reasonable policymaker would ever willingly choose to use. But by continually pushing off the day of reckoning, we essentially have further amplified its potentially destructive impact: Even deeper cuts may be required over an even shorter budget period.

The sequester's impact on military readiness could be disastrous. We will have fewer resources to keep our pilots trained or our warship crews capable of full combat operations. It will rob Army units of important training resources as they to prepare to deploy for combat.

Another area of deep concern is the potential layoffs of federal employees and private-sector contractors. Our civilian workforce is composed of hardworking individuals who deserve better. And Virginia's defense contractors cannot be expected to make smart decisions about their businesses if they lack clear guidance on the short- and mid-range budget outlook.

That's why I continue to push for a broad, bipartisan approach that, once and for all, strikes a responsible "grand bargain" on all of these fiscal challenges. If we can summon the political will, there is a path forward to begin reining in our nation's deficits and debt without lurching recklessly from crisis to crisis.

Over the past two years, our bipartisan "Gang of Six" in the Senate managed to move within sight of the goal line on a grand bargain, based on the framework spelled out by National Commission on Fiscal Responsibility and Reform, commonly called the Simpson-Bowles Commission.

We produced a balanced package of spending cuts, improvements to strengthen Social Security and Medicare, and broad-based tax reforms to generate additional revenue by making our tax code flatter and fairer.

Ultimately, congressional dysfunction and partisan politics short-circuited the work of the Gang of Six. But I firmly believe we can solve our deficit and debt challenges without threatening our national security, holding back our economic recovery or sacrificing investments in programs that will help our economy grow and create jobs.

As Congress prepares to enter yet another round of discussions about federal spending, the automatic cuts and raising the debt ceiling, I believe all of us should be able to agree at least on this much: The full faith and credit of the United States is not a bargaining chip.

Continuing to play games with America's fiscal future will cause both short- and long-term damage to our national security. And neither the safety nor the financial well-being of the American people should be used as leverage by politicians angling for temporary partisan advantage.

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Best Regards,