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Hagel says more budget cuts will force Pentagon layoffs

U.S. Defense Secretary Chuck Hagel attends the opening ceremony of the Pentagon's permanent Korean War exhibition near Washington June 18, 2
U.S. Defense Secretary Chuck Hagel attends the opening ceremony of the Pentagon's permanent Korean War exhibition near Washington June 18, 2

By David Alexander

JACKSONVILLE, Florida (Reuters) - Defense Secretary Chuck Hagel said on Tuesday that a new round of automatic spending cuts next year would force the department to cut personnel and that he already has decided to reduce jobs in the offices of the Pentagon's top leadership by 20 percent.

Hagel, speaking to aircraft maintenance workers at Naval Air Station Jacksonville, defended his decision to put civilian workers on unpaid leave for 11 days through the end of the fiscal year on September 30, saying further cuts in other areas could have jeopardized military readiness.

Some 6,900 civilians at the base had their first day of unpaid leave last week, including 2,700 at the maintenance facility, officials said. That amounts to an effective 20 percent pay cut through the end of the fiscal year.

The defense secretary, who is on a three-day "listening tour" to talk to personnel at bases across the southern United States, painted a sobering picture of the uncertainty hanging over the department as a result of automatic budget cuts known as sequestration.

The cuts, ordered by the White House and the Congress, reduced Pentagon spending by $37 billion this fiscal year, prompting the unpaid leave and other cuts. They are likely to cut $52 billion from defense spending in fiscal 2014.

Responding to questions from the workers, Hagel said an additional $52 billion in cuts in fiscal 2014 would inevitably require a reduction in the Defense Department's workforce.

"This is not a good way to do it," he said. "You don't save any money at the front end when you RIF (reduction in force) people. In fact it costs you more money. It's just a dumb way to do things. Sequestration is an irresponsible deferral of policymaking. But we are where we are."

Hagel said he and Army General Martin Dempsey, the chairman of the Joint Chiefs of Staff, had decided to implement a "20 percent across-the-top cut in our offices." He said later the 20 percent cut would also affect the staffs of the combatant commanders and would be implemented in the 2015-2019 time frame.

"That isn't going to fix the problem," he said. "But ... everyone's got to do their part."

The secretary said cuts could eventually affect compensation packages, such as retirement benefits, healthcare and pay, which combined represent about half of the Defense Department's budget.

"That's not going to go untouched," he said. "You don't get the money in the overhead of the office of the secretary of the Defense Department. You need billions and billions of dollars."

Speaking later at a luncheon with members of the Jacksonville Chamber of Commerce, Hagel said he was not optimistic about Congress and the White House reaching an agreement to avert the next round of budget cuts.

"I don't see a lot of hopeful signs that this is going to be resolved," he said.

(Editing by Mohammad Zargham)

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