Official warns of continued spending cuts in next fiscal year

5 Sep 2013 | Nick Simeone

With the new fiscal year less than a month away, a senior Defense Department official delivered a warning Sept, 4, at a defense cooperation conference here: expect the current spending cuts triggered by sequestration to be part of the budget landscape for the foreseeable future.

Elana Broitman, acting deputy assistant secretary of defense for manufacturing and industrial base policy, told an audience of defense industry and government officials -- including those from some of America's closest allies -- that there's no indication Congress is prepared to pass a new budget that would end sequestration when the new fiscal year begins Oct. 1.

"You know the sequestration story will largely not go away in the coming fiscal year," she said in her prepared remarks, an indication of more belt tightening likely to affect defense contractors and the industrial base. "In [fiscal year 2014], we don't have a choice but to take a hard look at investments as well."

Senior leaders in the military and the office of the secretary of defense "will continue to take an unsparing look across their portfolios to uncover ways to cut or trim programs that have become bloated, no longer serve their original purpose or have become such an exquisite option they no longer fit with either fiscal or strategic realities," Broitman said.

She cautioned however, that if not carefully considered, cuts to defense-related research and development risk affecting more than just jobs and contracts within the defense establishment.

"If we get it wrong, we jeopardize lives, and the longer-term national security interests of over 300 million fellow citizens as well as the hundreds of millions more around the globe who depend upon our unique and storied institutions," she said.

Broitman warned that the Pentagon "won't have the luxury of continuing every program, or starting every new one," and said she is concerned that the continued cutbacks rippling through the defense industry could mean companies that the department relies upon, especially medium and small suppliers, won't invest in research and development, and therefore would leave the defense establishment with vulnerabilities in the supply chain.

That could be especially pernicious, she suggested, given the kinds of challenges the Pentagon is facing, not only geopolitically, but from the likelihood of continually shrinking budgets.

"We cannot afford to sleepwalk through a period of tighter fiscal belts, and wake up to a lack of new and advanced systems in a few years," Broitman said. "International security and the fiscal realities the United States faces in the years to come [are] quite different and much more difficult than many past eras." This, she added, leads to hard choices for the foreseeable future.

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