800,000 Pentagon staff face unpaid leave

The “vast majority” of the Pentagon’s civilian personnel will be put on temporary unpaid leave if automatic spending cuts take effect on March 1, leaving 800,000 workers without pay for one day a week for more than five months.

In a letter to all US defence department employees, defence secretary Leon Panetta warned of “a serious erosion of readiness across our force” that would occur under sequestration – budget cuts worth $1.2tn over a decade under which military spending will take a big hit.

But Mr Panetta also said he was “deeply concerned” about the fate of Pentagon staff and their families. “We are doing everything possible to limit the worst effects on DoD personnel – but I regret that our flexibility within the law is extremely limited,” Mr Panetta said.

Military personnel will be exempt from the automatic cuts, but civilians will be affected – and beginning in April will be subject to a one day per week furlough for 22 weeks. Mr Panetta said employees would be given 30 days’ notice before the furloughs.

“We also will work to ensure that furloughs are executed in a consistent manner, and we will also engage in discussions with employee unions as appropriate,” Mr Panetta said.

The sequestration cuts are split evenly between defence and non-defence spending. Including spending reductions across other US government agencies, total federal furloughs could well exceed 1m workers.

Mr Panetta’s letter on Wednesday came as Democrats and Republicans continued to blame each other for the budgetary impasse that has led to the imposition of the automatic cuts, offering little chance of a last-minute agreement to unwind or delay the budget reductions.

Both President Barack Obama and congressional Republicans have said sequestration is bad policy, but they have been unable to agree on how to replace it with more targeted deficit reduction measures. Mr Obama and Democrats want to do so partly by curbing individual and corporate tax breaks, but Republicans are adamantly opposed to any new tax rises.

The scenario unfolding differs from the budgetary stand-offs of August 2011 and December last year respectively over raising the US debt limit and extending Bush-era tax rates, in which most congressional aides and policy makers expected some form of last-minute fix to be reached.

In this case, the expectation is that the US government will be under budget sequestration for at least a short time. If the cuts are implemented fully for the remainder of the year, it could hit gross domestic product by between 0.3 and 0.6 percentage points in 2013, according to economists.

This week the White House and congressional Republicans have been trading blows over the automatic cuts, which were designed in August 2011 in a vain effort to force Congress into a deficit deal by threatening a scenario that was too painful for both sides.

On Tuesday Mr Obama warned that the cuts were a “meat cleaver” approach to budget policy that would hurt the US military and “eviscerate” domestic investments. “Republicans in Congress face a simple choice,” Mr Obama said. “Are they willing to compromise to protect vital investments in education and healthcare and national security and all the jobs that depend on them, or would they rather put . . . our entire economy at risk to protect a few special interest loopholes?”

John Boehner, the Republican speaker of the House of Representatives, offered a lengthy retort in a Wall Street Journal opinion piece on Wednesday.

“Most Americans are just hearing about this Washington creation for the first time: the sequester. What they might not realise from Mr Obama’s statements is that it is a product of the president’s own failed leadership,” he wrote.