The fiscal cliff 13 hrs and counting!

Discussion in 'Academy/Military News' started by Pima, Dec 31, 2012.

  1. Pima

    Pima Parent

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    Just curious if people believe we will go off the cliff, and if so what their assumptions will be regarding the impact on the military.

    If I am correct 59BN will have to be cut from this yrs defense budget.
    http://www.nationaljournal.com/congress-legacy/what-happens-if-we-go-over-the-fiscal-cliff-20121227
    My bet is a large chunk will come from man power attrition for AD and GS, and even slowing down promotion boards.
     
    Last edited by a moderator: Dec 31, 2012
  2. bruno

    bruno Retired Staff Member

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    That's not gonna do it. Approximately 1/4 of the Base Defense budget are for personnel costs- approximately $150 billion. Of that - about $90 Billion is direct pay and benefits and another $40 billion is for Health Care with the balance going to retirement accounts. So unless you are going to slash personnel by half- the immediate affect is mostly gonna come out of procurement, base operations and maintenance. On top of that- Panetta sent out a memo stipulating that the AD force would not be reduced in 2013 as a result of Sequestration. Long term though- pay raises for military personnel have gone up year after year unlike the civilian economy- that will stop. Tricare has been a gravy boat for a long time- it's a more lucrative plan than most of the rest of the country gets now - expecially for retirees ($3 copay for prescriptions? They could triple that and it is still better than what most folks pay now). 20 year retirement is pretty generous- it'll probably go too- though I think that they will be exceptionally sorry if they eliminate that as it is a huge component of retention (20% of the force stays for 20 years, which means that you get a relatively stable and well trained force compared to the Civilian world). But to get the kind of savings they are talking about immediately- my bet is that it's gonna be the Northrop Grummans,Lockheed Martins, Raytheons, etc who are going to be the first and most immediate big bill payer. I understand that the 800,000 DoD Civilian employees have been told to expect major immediate furloughs if this occurs though. It's gonna be ugly any way they do this.

    http://www.cbo.gov/publication/43574

    BTW- sorry for messing with PIMA's original post- I edited instead of quoted when posting my reply-:eek: I think I restored it as you originally posted
     
  3. bruno

    bruno Retired Staff Member

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  4. kinnem

    kinnem Moderator

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    In the light of New Years Day I think there is a 50-50 shot at not going over the cliff with at best a delay in sequestration. I too read that the Pentagon is informing its 800,000 civilian employees and contractors of furloughs, or at least planning to after Jan. 2 if the sequester is still in place.

    I think the House still has a good chance of screwing up a deal. I almost don't blame them. Spending has to be cut sometime, somewhere. If the sequester is delayed a couple months then it and other spending becomes part of the debt limit debate. So if we survive this cliff I'm almost certain we go over the next one because I see no where these two parties, houses of congress, and the president can agree on any cuts. We probably should be referring to these things as the fiscal rapids because we definitely have a series of them coming up. They will argue back and forth to the last minute and then throw up their hands and say there is not time to come to agreement on spending cuts. The debt limit itself may or may not be raised but without spending cuts included we've gone over the cliff as far as I'm concerned. There is no doubt in my mind if there are cuts a significant portion will be coming from the military in any case, for political reasons. The only way we'll dodge those cuts is if we're in another war... which is far from unlikely in today's world.
     
  5. Pima

    Pima Parent

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    I agree I see no meeting of the minds.

    Tricare premium increases can reduce the debt for DoD, but not enough to stave off jobs. Serb boards for O6+ will also reduce, but still not enough. Attrition can also impact the budget, yet overall with those 3 things, 59.5 BN will not occur for FY13.

    Canceling programs is where they have to go, and once the pipeline is closed it is hard to re-open.
     
  6. goaliedad

    goaliedad Parent

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    I was reading recently where it is suggested that it isn't smart for members of the house to compromise from a job security perspective. Basically, 90% of the seats in the house are "safe" for either one party or the other. Any sitting representative exposes him/herself to a greater risk of being "primaried" (voted out in a competitive primary) than being voted out in a general election.

    The various well-funded super pacs and other interests have demonstrated in the recent election cycle more money going to primary challengers who have more extreme views (both directions).

    I suggest that until we straighten out the re-apportionment processes on a national level (will probably take a Supreme Court ruling to show somebody getting disenfranchised or something like that) getting it out of the hands of elected officials (reinforcing the current polarizing effect) that we will continue to have a very hostile and contentious atmosphere in the House.

    The only other way that this polarization will break is that one party or the other actually wrests total control, which to me is a dangerous thing from the way our system was designed.

    I do agree that this kicking the sequestration can down the road is a bit of a cop-out, but quite frankly, expecting a deal out of a lame-duck congress is way too much considering how this congress has actually behaved the past 23 months.

    Unfortunately, I suspect the next congress won't perform much better given the dynamics I have mentioned.

    The American people don't quite get the idea that their own individual view of how things should work are not universally agreed to and that they can be angry a long time but that doesn't change the fact that everyone must compromise on most things to actually get the work of the country done.
     
  7. Packer

    Packer Member

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  8. kinnem

    kinnem Moderator

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    Given the remarks of the Chairman of Ways and Means on the House floor, and given they've agreed to an up or down vote on the bill it sure seems like it will pass the House tonight. So the can bounces down the road and we get two or three more months of this as we approach the next (and final?) set of rapids. I don't see any fiscal conservative leverage points after the debt ceiling vote so it's there or never on spending. Question is, who will blink?
     
  9. goaliedad

    goaliedad Parent

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    Unfortunately, the state of today's congress is much like Reality TV.

    You have "The Real Housewives of (fill in your favorite wealthy locale)" on Bravo.

    You have "The Real House members of the US Congress" on CSPAN.

    People watch because they seem to like to see the drama (Who is going to blink?). Honestly, I think all the actors on both shows would get along better if the cameras were absent. And if people would turn off the TV, the cameras wouldn't be there. We get exactly what the broadcasters think we will watch. Our representatives say exactly what will get them the best exposure on camera and as a result are trapped by their words.

    The first amendment allows us to say anything no matter how stupid. The media just wants the stupid.
     
  10. falconfamily

    falconfamily Member

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    The real test will come in 2 months.

    We simply kicked the can up the road a couple of months.
     

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