By Jared Serbu
Reporter
Federal News Radio

Additional cuts to the Defense Department’s budget would force the Pentagon to consider “truly draconian” measures, the president’s nominee to be the department’s No. 2 official testified Tuesday.

The failsafe measures built into the agreement that created the Congressional budget “supercommittee” would trigger up to $600 billion in 10-year Defense spending cuts if members of the joint panel cannot agree on governmentwide cuts of at least $1.2 trillion.

Such spending reductions would press DoD to impose civilian employee furloughs, abandon major weapons systems and quickly curtail military training, said Ashton Carter, the undersecretary of defense for acquisition, technology and logistics, who is awaiting confirmation to become DoD’s deputy secretary.

Additionally, the triggered cut, which would come on top of $350 billion in defense cuts Congress has already agreed to make over the next 10 years, would take away DoD’s ability to plan ahead of time for reduced budgets, Carter said at his confirmation hearing before the Senate Armed Services Committee Tuesday.

“It’s across the board, and it would deprive us of the ability to make strategic choices,” Carter said. “It puts a haircut across everything. You can’t buy three- quarters of an aircraft carrier or a building.”

Carter testified on the same morning the supercommittee held its first meeting.

Sen. Carl Levin (D-Mich.), the Armed Services chairman, told Carter that if he is confirmed, his panel will need to begin hearing back from him almost immediately about DoD’s recommended approaches for the initial $350 billion reduction, as well as the consequences of the potential failsafe $600 billion cut, known as sequestration. The supercommittee has told Levin that it wants to hear the Armed Services committee’s recommendations with regard to defense spending by mid- October, he said.

DoD already is in the midst of a comprehensive budget review designed to outline the options and risks associated with taking $400 billion from previously-planned spending. Carter promised the committee the review would be finished and provided to Congress by the end of the year.

Carter also said DoD will need to take a different approach to the budget process this year, given its desperate need to avoid the sequestration outcome. “This is a circumstance that’s unprecedented, and we can’t get through it and do the right thing unless we’re in close consultation with the Congress,” he said. “That means, this year, we’re going to have to change the way we normally do budget business. Secretary (Leon) Panetta has made that quite clear, and I certainly pledge to you that close consultation.”

As DoD goes through its own budget assessment, all options are on the table, Carter said, including rebasing troops stationed in Europe to the United States, and the political third-rail issues involving military pay and benefits.

A preliminary report by the Defense Business Board this summer caused a stir when it recommended that DoD convert its 20-year pension system to a 401k-style savings plan. The board, which serves only in an advisory role to the Pentagon, is expected to deliver its final report sometime this month.

DoD also has tried repeatedly to increase the amount that working-age military retirees pay for their TRICARE health care premiums. The armed services committees of both houses of Congress have endorsed some of the TRICARE recommendations in their respective 2012 authorization bills for the department.

At the hearing, Sen. Lindsey Graham (R-S.C.), who is also an Air Force reservist, was a rare voice in favor of alterations to pay and benefits.

“When you want to reform retirement, count me in,” Graham said. “I want to do it in a humane, generous way, but it needs to change. When you want to change TRICARE premiums for people like myself, who are going to be retired colonels one day, count me in. Because even though you’ve served and you’ve sacrificed, you still have the ability to serve in retirement. We’re not going to ask more from the retired force than they can give, but change has to come.”

Carter said pay and benefits changes are among a host of issues Panetta is now seriously examining that would never have been considered, absent the threat of huge budget cuts. “Like everything else, compensation and benefits has to be on the table,” he said. But — and this is the only ‘but’ he’s made in that guidance to us — we can’t break faith with the force. And that would mean significant, abrupt changes that would affect the deal made between servicepeople and us when they entered service. That is not somewhere he wants to go.”

Panetta has said that any changes to retirement would be phased in over time and that current military members would be grandfathered in.

Although budget issues were front and center at Carter’s confirmation hearing, he also took some grilling from senators on the DoD acquisition process he currently oversees.

Sen. Kelly Ayotte (R-N.H.) wanted Carter to explain how the department would be able to find savings in contracting.

“I think a third year law student could negotiate better terms than we’ve been negotiating at the Department of Defense,” she said.

Carter said the department’s acquisition problems were multifaceted and acknowledged more work is needed. But he said the first focus should be on DoD’s acquisition workforce.

“There’s so much we can do,” he said. “I’d start with the people. When we back them up, and say we expect them to negotiate a better deal than a third year law student, they want to hear that. They want to do the right thing. They want to be backed up by us. And they know the ultimate power of the purse resides in the Congress, so when they hear you asking for the same thing, it helps us.”

With regard to the recently-released final report of the Commission on Wartime Contracting, Carter said he agreed with many of its findings. The panel found DoD lost up to $60 billion to contracting waste and fraud in Iraq and Afghanistan.

“It’s extremely well done,” he said of the panel. “We’ve been working with them side-by-side, and we’re working off of the same list of recommendations. It points to a problem that’s a very serious one, and almost all of their recommendations made a lot of sense. They were things that we either were doing or should have been doing.”

This story is part of Federal News Radio’s daily DoD Report. For more defense news, click here.

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