Pentagon: More Spending Cuts Would Devastate Defense Industry

The defense industry could face shattering consequences if Congress fails to agree on a reasonable solution for reducing U.S. budget deficits by the end of the year, the Pentagon's industrial policy chief said on Tuesday.

The Department of Defense is already cutting $350 billion in spending this year as the result of debt reduction deal passed by Congress in August. In addition, the plan also calls for a bipartisan committee of lawmakers to come up with at least $1.2 trillion in additional spending cuts by late November. If Congress is unable to adopt those cuts, the measure forces up to $600 billion in additional defense cuts, along with equal spending cuts in non-defense programs.

Brett Lambert, the deputy assistant secretary of defense, manufacturing and industrial base policy, said any additional reductions to defense spending would result in uncertainty that would be harmful to the fledgling defense industry, Reuters reports.

The only certainty of that uncertainty is that it would be devastating to the department and to the industry if implemented as currently envisioned, he said, speaking at the Reuters Aerospace and Defense Summit in Washington.

Global weapons makers are reportedly preparing themselves for cuts in defense spending, which was sparked by a combination of the debt-ceiling deal as well as planned U.S. troop withdrawals from Afghanistan and Iraq.

However, the Congressional Budget Office has said that none of the defense cuts would include supplemental funding for the wars overseas or supply lines to troops in Afghanistan. Moreover, savings associated with the drawdown of troops from Afghanistan have reportedly been accounted for and will not count toward the debt reduction requirements.

Lambert said he anticipates the defense industry will adapt to its new challenges by creating more mergers and acquisitions to decrease costs. He said he expects the Defense Department to deal with more activity in the coming years, according to the source.

The U.S spent six times as much on defense spending as China in 2010, its nearest competitor, and more than the next 17 top-spending countries combined, according to figures compiled by the Stockholm International Peace Research Institute.

In August, Defense Secretary Leo Panetta said across-the-board cuts to military spending would be a doomsday mechanism that would be detrimental to national security.

I will do everything I can to ensure that further reductions in defense spending are not pursued in a hasty, ill-conceived way that would undermine the military's ability to protect America and its vital interests around the globe, he said.

Although some conservative lawmakers and Defense Department officials have claimed a hefty reduction in defense spending could jeopardize the safety of the U.S., Winslow Wheeler, an expert on military reform at the Center for Defense Information, told The Huffington Post that even with the cuts, the Pentagon's base budget would be about equal to what it was in 2007.

The rhetoric and hysteria about these levels, compared to what they are, is really quite stunning, Wheeler said. In terms of dollar amounts, even the 'doomsday mechanism' -- in Panetta's words -- would leave DOD flush with cash.