William Katz:  Urgent Agenda






THE REAL DAMAGE – AT 10:42 A.M. ET:  If no deal on the "fiscal cliff" is reached in the next few days, many things start happening automatically.  Among them are severe cuts to the Pentagon budget.  These are on top of cuts already put in place.  The damage to our country's defense, especially the loss of highly skilled personnel, can be severe.  I get the sense that some in the Obama administration wouldn't mind.  From Fox:

With Washington so far unable to avert the looming fiscal crisis, much of the attention has been on the more than $500 billion in tax hikes set to take effect Jan. 1.

But failure to strike a deal also means the first wave of roughly $1.2 trillion in spending cuts will hit starting next month.

Of that, about $492 billion will be carved out of the Pentagon over the next decade -- that's about $55 billion a year starting in 2013. It was a scenario so dire that for months Defense Secretary Leon Panetta had claimed his department wasn't even planning for it. Now, it could be reality.

Retired Army Gen. Jack Keane said the implications for the military could be "very serious."

He said the Pentagon is "already in financial trouble because there's already been a $480 billion cut that's being applied right now as we speak.

"To take another cut on top of that ... is devastating," he said.

And it will make it more challenging for the military to maintain its troops, its equipment, and its preparedness, Keane said.

The broader defense industry also will be hit -- this is part of the reason that budget forecasters say the fiscal crisis could cause another recession. Private companies that do work for the Pentagon may not get the government contracts to keep them in business, which in turn hurts security more.

COMMENT:  And once those devastating cuts take place, it may be very difficult to undo the damage.  How do you hire back service people who have been forced to go on to other employment?  How do you re-open a closed installation that's being used for a non-defense purpose.  Where do you get those engineers again, and skilled craftsmen?

This country is getting weaker, not stronger.  Will someone wake up?

December 29, 2012