Pentagon on Furlough Notice as 'Unengaged' Obama Demands Tax Hikes

As President Obama has been focusing on the domestic side of looming mandatory sequestration cuts, warning of cuts to Head Start programs and food-safety inspections, the nation's military readiness is on the line as the Pentagon braces for losing more than half a trillion dollars from its budget.

Obama is trying to play chicken with Republicans on the cuts, demanding more tax hikes on the wealthy even as the GOP has passed a package of cuts and reforms to stop the sequester twice in the House.

"I know Democrats in the House and in the Senate have proposed such a plan -- a balanced plan, one that pairs more spending cuts with tax reform that closes special interest loopholes and makes sure that billionaires can’t pay a lower tax rate than their salary -- their secretaries," Obama said Tuesday. "And I know that Republicans have proposed some ideas, too. I have to say, though, that so far at least the ideas that the Republicans have proposed ask nothing of the wealthiest Americans or biggest corporations, so the burden is all on first responders or seniors or middle-class families."

But as Obama gave TV interviews today and lunched with Vice President Joe Biden at the White House, across the Potomac Defense Secretary Leon Panetta warned employees that the "vast majority" of the warfighting department's civilian workforce faces administrative furloughs if the March 1 sequester goes forward.

"In the event of sequestration we will do everything we can to be able to continue to perform our core mission of providing for the security of the United States, but there is no mistaking that the rigid nature of the cuts forced upon this department, and their scale, will result in a serious erosion of readiness across the force," Panetta said in a statement to the department.

Over at the Pentagon, Under Secretary of Defense and Chief Financial Officer Robert F. Hale said by the end of March the department could see a $46 billion reduction in the top line, including wartime accounts. In addition, the continuing resolution currently in place puts "too many dollars in the investment accounts and too few in operation and maintenance."

"The sum of all those effects means we are seriously short of operation and maintenance funds if sequestration goes into effect and the CR [continuing resolution] stays in effect. And this will have serious adverse effects on readiness," Hale told reporters.

If the sequestration and the CR continue through the year, he added, "we will have to cut back training, particularly for non-deployed units, and that will lead to actions such as about two-thirds of the Army combat and brigade teams being at unacceptable levels of readiness by the end of the year."

The furloughs will exempt civilians serving in combat zones, and must include another "slightly embarrassing" exception: Senate-confirmed political appointees are exempt by law. About 50,000 foreign nationals working for the Pentagon will also be exempt. It's not known yet if intelligence workers will be exempt.

The roughly 750,000 employees who could be subject to furloughs will receive 30-day notices in mid-March. The furloughs would amount to a 20 percent pay cut between late April and September.

"The effects of sequestration and the continuing resolution on our military personnel will be devastating. But on our civilians, it will be catastrophic. These critical members of our workforce, they work in our depots. They maintain and repair our tanks, our aircrafts, our ships," said Acting Under Secretary of Defense for Personnel and Readiness Jessica Lynn Wright.

"This is not a Beltway phenomenon. More than 80 percent of our civilians work outside of the D.C. metro area. They live and work in every state of the union."

The state economies hardest hit would be Virginia, California, Maryland, Texas, and Georgia.

Over at the White House, press secretary Jay Carney simply blamed Republicans who have "refused to go along with the American public on the simple notion that balance is the right approach to dealing with this problem."