The Defense Department’s Fiscal 2013 budget would be slashed by 23 percent if the Joint Select Committee on Deficit Reduction fails to reach an agreement on any deficit reduction measures by Thanksgiving and sequestration kicks in, Defense Secretary Leon Panetta told Sen. John McCain (R-Ariz.) and Sen. Lindsey Graham (R-S.C.). Under that scenario, the cuts would have to be applied evenly among the Pentagon’s major investment and construction programs, essentially rendering “most of our ship and construction projects unexecutable,” wrote Panetta in a letter to the two lawmakers Monday. A similar 23 percent cut in DOD’s weapons programs “would drive up unit costs and lead to reductions in quantity of one-third or more,” stated Panetta. If the maximum sequestration is imposed—an estimated $1 trillion over 10 years—DOD would be forced to cut $100 billion a year compared to the Fiscal 2012 budget. “Rough estimates suggest after 10 years of these cuts, we would have the smallest ground force since 1940, the smallest number of ships since 1915, and the smallest Air Force in its history,” wrote Panetta.
The Air Force and Boeing agreed to a nearly $2.4 billion contract for a new lot of KC-46 aerial tankers on Nov. 21. The deal, announced by the Pentagon, is for 15 new aircraft in Lot 11 at a cost of $2.389 billion—some $159 million per tail.