By David Alexander
WASHINGTON (Reuters) - The Pentagon will have to put hundreds of thousands of civilian workers on unpaid leave, slash ship and aircraft maintenance and curtail training if $46 billion in scheduled spending cuts take effect in two weeks, Deputy Defense Secretary Ashton Carter said on Tuesday.
Carter, testifying before the Senate Armed Services Committee, urged Congress to delay the automatic across-the-board cuts known as sequestration, saying: "These devastating events are no longer distant problems. The wolf is at the door."
He said the military faced a crisis of readiness by the end of the year due to the $46 billion in cuts required by sequestration and by Congress' failure to appropriate defense funding for the 2013 fiscal year.
Carter was testifying alongside the military service chiefs and the Pentagon comptroller.
The Pentagon, which is five months into the 2013 fiscal year, is operating under a continuing resolution that has kept its base budget at 2012 levels. While the funding is approximately the same, the money is in the wrong accounts.
Carter told lawmakers that as a result of the converging financial problems, the Pentagon faced a $35 billion shortfall in its operations and maintenance accounts that it would have to make up in the remaining seven months of the fiscal year.
"In the near-term, these reductions would create an immediate crisis in military readiness," Carter said.
Sequestration is a legacy of a 2011 impasse between Obama and congressional Republicans over raising the nation's debt limit. Republicans, unhappy about the nation's deficit, wanted to match any increases in the borrowing cap with cuts to government spending.
Carter said if the $46 billion in budget cuts take place as currently required on March 1, the department would have to:
-- Put most of its 800,000 civilian employees on unpaid leave for one day a week for 22 weeks, a move that would save between $4 billion and $5 billion;
-- Curtail Army training and maintenance for units that are not scheduled to deploy to Afghanistan, a move that would leave about two-thirds of active duty units operating at reduced readiness;
-- Cut Air Force flying hours sharply and reduce weapons system maintenance funding by about 30 percent, leaving most flying units below readiness standards by the end of the fiscal year;
-- Reduce Navy and Marine Corps fleet operations, including reducing ship and aircraft operations in the Asia-Pacific region by about a third;
-- Cancel Navy ship and aircraft maintenance work in the third and fourth quarters, affecting about 25 ships and 470 aircraft.
"Overall these actions will seriously disrupt programs and sharply degrade readiness," Carter said.
The Pentagon would have to cut its spending on developing weapons and other systems -- about 2,500 investment line items -- by about 9 percent per program, a move Carter said would "disrupt programs, add to unit costs and damage the defense industry."
The action would hurt subcontractors, many of them small businesses that do not have the capital structure to withstand the turmoil and uncertainty, he said.
Carter told lawmakers the budget uncertainty has already had impacts on the department. Because of budget fears, the Pentagon already has frozen civilian hiring, which disproportionately affects veterans, who make up 44 percent of the department work force.
The department is taking steps to begin laying off a "significant portion" of its 46,000 temporary and term employees, and it is curtailing facilities maintenance by more than $10 billion, most of which will affect contractors and small businesses, he said.
(Reporting by David Alexander; Editing by David Storey)
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