STOCK MARKET WATCH -- Thursday, 21 February 2013

[Demeter]

13. Defense Cuts May No Longer Be Political Sacred Cow by Scott Horsley

Defense Secretary Leon Panetta warns the automatic spending cuts, due to hit the Pentagon and other branches of government next week, will damage U.S. national security. In a letter to Congress, Panetta warned those cuts would put the military on a path toward a "hollow force." But the warnings don't appear to be moving the needle with lawmakers or the American public.

The automatic spending cuts don't officially take effect until March 1, but they are already being felt. As President Obama noted this week, the Navy has decided not to send one of its aircraft carriers on a scheduled deployment to the Persian Gulf.

"As our military leaders have made clear, changes like this — not well thought through, not phased-in properly — changes like this affect our ability to respond to threats in unstable parts of the world," he said.

At one time, idling an aircraft carrier to save money would have been unthinkable. The White House thought that prospect would be so alarming to congressional Republicans that they'd never allow the automatic spending cuts to take effect...Some Republicans are alarmed. House Speaker John Boehner calls the military cuts "devastating." But Congressional expert Sarah Binder of the Brookings Institution says the GOP is no longer united when it comes to protecting the Pentagon.

"There's a defense wing of defense hawks, and they've been pretty vocal about the impact on the Defense Department and national security, generally," she said. "And we know there's a hard-core group as well that's opposed to any and all revenue increases.

"And between the two of those, there's no agreed upon path of what to do. And so it looks like they may prefer the sequester to any alternative. Certainly the alternatives the Democrats are offering up."

Obama is trying to enlist the public's help. He did a series of local TV interviews Wednesday, and he's planning to visit a military community outside Washington next week. White House spokesman Jay Carney says the idea is to ramp up pressure on lawmakers to suspend the automatic cuts. "The fact of the matter is, congressional Republicans are going to listen to the American people," Carney said. But the American people aren't necessarily convinced cutting the Pentagon budget is a bad idea.

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