Pentagon puts 650,000 workers on unpaid leave due to cuts
Heavy US government spending cuts took a sharp swing as the Pentagon began putting about 650,000 civilian workers on unpaid leave.
The Department of Defense’s civilian employees face furloughs of up to 11 days through the end of the fiscal year on September 30.
The unpaid leave will slash their paychecks by 20 percent at a time when the US economy is crawling at a modest pace four years after the recession ended.
The pay pinch was expected to have the most immediate impact in areas with a large military presence, such as greater Washington DC, California and Texas.
Defense Secretary Chuck Hagel announced the furloughs in May as part of the $37 billion cut from the Pentagon’s budget under the federal government’s broad spending reduction, or sequestration, that took effect on March 1.
The defense budget took the biggest hit under the $85 billion in cuts through the current fiscal year, a drastic program implemented after political parties failed to reach a compromise over longer-term deficit reduction.
The cutbacks lower government spending by five percent, and Pentagon spending by about eight percent.
Hagel said he had made the furlough decision “very reluctantly” because of the disruption to workers’ lives and the impact on defense operations.
The furloughs are expected to save approximately $1.8 billion, according to the Pentagon.
The Pentagon already has been forced to reduce spending in a number of areas, including combat training, maintenance and deployments.
The furloughs that began Monday will be done at a rate of one day per week for most civilian personnel.
The International Monetary Fund last month assailed the sharp spending cuts as “excessively rapid and ill-designed.”
Releasing its annual report on the US economy on June 14, the IMF said growth would be only 1.9 percent this year due to the cutbacks, when it had the potential of growing as much as 1.75 percentage points faster.
“A slower pace of deficit reduction would help the recovery at a time when monetary policy has limited room to support it further.”