welcome to "this week in defense news." i'm vago muradian. to date almost 350,000 troops have been wounded in iraq and afghanistan, we take a look at what the paralyzed veterans of america is doing to help them. but first, congress has left washington for five weeks of vacation and campaigning before the november elections without resolving the single biggest issue over u.s. defense. sequestration. unless congress enacts a deal by january 2nd another $500 billion will be cut over the next decade on top of nearly $500 billion already cut. officials summoned congress and industry leaders say that would devastate national security. instead of the deal however lawmakers proposed a continuing resolution to keep the military funded for the first six months

of the fiscal year that started october 1. what's the outlook for sequestration and what will it lean for the pentagon and industry? to discuss that and more is the round table with rick mays the congressional editor for the times newspapers, todd harrison with the center, mackenzie england an, and david. lady, gentlemen. welcome. rick let me start with you and we're going to get to sequestration, but what about the continuing resolution? there's not a sense it's a continuing resolution at all. what have they done? >> pretty much nothing. they'll wait and pass something temporary in a temporary fashion good through april 1st so they don't have a fight between now and the elections but they don't know the ingredients.

it doesn't sound like a regular continuing resolution where the budgets are flat and you can't start any new programs. it sounds like it will be different than that. it won't just be the defense department and there's a possibility it will be new starts and other things in it. >> this is the kind of thing where the devil is in the details and it really could fall apart at the last-minute and we could be facing the threat of a government shutdown. >> but congress is only in for two more weeks between now and the election. they need to figure this out. >> ultimately you only need a day to do a continuing resolution. we've never had two months and so -- this is going to be a real surprise of what gets in here. but it has generated a lot of activity with what kind of anomalies that is the things that the language you want to get in the continuing resolution. people have way for time to work on this and it will cause trouble. >> the million dollar question in washington which is sequestration does it happen and if so what does its mean? david? >> fill i think the dirty little sweat about sequestration is we might be able to do and not collapse as

a nation. and nobody wants to come to grips with that question. the second problem -- >> at which would seem to me to make sense for everybody at the end of the day. >> but we're not going to get to the end of the day until end of the cay. the chance of anything happening to resolve this between now and the election are zero. does anything happen on november 6th to change the dynamics? you want mat the back end about where we are right now but with less time to fix it. >> vago we've been talking about this for a year. not much as changed. i think we're headed on the course of sequestration happening and then trying to reverse it in january. the big thing that i keep saying over and over again is it's not the magnitude of the cuts that's the really big challenge here. it's the fact that you have no flexibility in how you allocate the cuts. it's a uniform cut across all accounts if they can get rid of that single provision, that changes the game altogether. >> that's right because mine just to bring everything up to speed what basically the president has done is exempted military personnel, exempted veterans and exempted --

wartime operation costs which means that a 10% cut is hit on every program project or activity irrespective of the size. >> that's the way the law was written. they should have known it when they passed the law that that was in there. >> mackenzie? >> they will get that flexibility because it's the single defining feature that everybody truly hates in washington. even only ute laterally they will give it to the pentagon. the outcome here is a partial sequestration depending on its flexibility they split the baby on the amount instead of another $50 billion, say take half of that. both parties will claim victory. the defense will say we got more on defense cuts and the republicans will say we saved defense. >> it will depend on the election. if by some chance romney wins and the senate turns republican i don't think there'll be a deal. i think a sequester will happen and they'll have to fix it then later. if the status quo remains, there's no incentive for them

to put off until next year what they can do now and you might get a deal at the last-minute and puts it off for a year. >> not entirely but a one year delay and try again on -- >> one important additional feature. and that's the potential cost of a punt. because of course congress likes to punt. but because you have the -- debt rating of the american nation, at stake here and the ratings agencies could downgrade us if we punt. the cost of punting could be actually greater than the cost of sequestration. >> that's a very important thing to bear in mind. the reason we were downgraded on the debt was not the size of the debt which could have been significantly larger. was for the first time the ratings agencies thought oh my god the united states for the first in 236 years -- first time in 236 years was willing to default. members were actually welcoming it. >> there's another cost and david is right. there's a huge cost not removing the uncertainty. it's wrapped up in the tax debate. and punting -- and not providing industry any more certainty a year from now is

just going to keep the problems going. >> a wall street friend of mine said it's well like even the greeks and europeans figured out they have to solve the financial problem. >> you can only wait so long because there'll be another debt limit -- >> in march isn't it? >> march or april. just about the time this temporary funding bill -- the mysterious temporary funding bill runs out will be -- they'll have to face that too. >> over what the concrete impact is going to be. i mean if you listen to some literally you know it's almost out of like ghost busters you know. cats sleeping with dogs and rain falling up and total chaos is what's going to 457. if you look -- happen. but if you look at it. i mean is it going to be that bad? i mean are we going to be seeing factories closing and see the kind of layoffs of tens of thousands of people which is what some of the companies are suggesting which the labor department says -- is unnecessary? >> there's been a lot of loose rhetoric about this you know. there are a few things that will not happen. no one in the uniformed military is going to get a pink slip. we know this now. no one will get fired and no

pay or benefits will get cut because military a exempted. that is the certainty. no base closures because they don't have any authority to close the bases from this. it might work out better if they can close bases but they don't have that flexibility. in terms of industry you know, the sequestration adds some budget authority, about 10% immediate cut and budget authority but only be about a 6% cut in outlay for industry in the first year. yet you won't get to the full 10% reduction there outlays for another three, four years and not a huge immediate impact on industry either. >> look at what -- the department of labor put out a week ago on the warrant act notices if you will. that basically said you don't have to worry about sequestration, see footnote one and one lists all these important people who have said we need to fix sequestration. it fails to recognize two fundamental facts, one is sequestration is the law until something changes. that's not all that likely. the second thing it didn't to

was actually talk about what the contract auditors would say if in fact you failed to issue a warrant act notice. then incurred costs as a result of that. well, there's nobody going to keep dcaa from disallowing the costs in the event that you have a contract modification or contract termination. that's what industry has to pay attention to. >> mackenzie? >> it's not that there will be no impact on the basin. the small and medium sized businesses first. particularly those with port foal owings outside of dod or international customers to a great extent. but their suppliers and vendors and their long companies, those are the runs that will feel the -- ones that will feel the impact and there will be companies that go out of business as a result of this. but over the first six months of the jeer. >> there's flexibility. that's the thing to remember. although we keep talking about there's not because built into the law is a 20 day period after the sequester order is given where you can change it

and where congress has the power by resolution to modify and shift things around. anything really dire that was going to -- >> it requires congress cooperating. >> it doesn't require a congress to reach an agreement that can't reach an agreement. >> ultimately they have to do manager something about it. >> really bad things could be stopped. >> . the administration can't do it on their own though. i say you just submit a $54 billion reprogramming request you know. >> stay tuned for more with our round table k, and i was trapped.

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welcome back to our round table. todd, the house and the senate passedless that the president signed which was this sequestration transparency act. they have 30 days to tell congress how congress' rule would affect the administration effectively and i believe the deadline is going to be on the day that the president is accepting his party's nomination. what's going to happen at the end of the day? >> this is a bizarre situation where congress essentially passed a law asking the administration to plain to them how -- floodplain to them how -- explain to them how a law they passed will be implemented. really the only discretion was whether or not they exempt military personnel. they are already going to do that. all that's left to do is read them back the law and tell them what it says. >> there's actually a second thing the administration can do and that was maintain unnoble

gaited balances to reduce the -- unobligated balances to reduce the impact and pool of which sequestration could take. which will focus the cuts even more on fy 13. but the reason the administration can't answer the question is they can't answer a much more fundamental question. what kind of defense do we need going forward and how do we prioritize doing that? they're still in the process of evolving that. >> sequestration would be uniform across the board cuts and you cannot do any prioritization. they can't do the report anyway because the cuts are made on the 2013 budget that won't exist yet on the day the report is due. if they have a blank piece of paper that's going to be a full report of the cuts and what they're going to be. >> this is really an effort to continue the political game of chicken. both branches of government are playing it very well and congress wants the very dire picture painted the kind panetta talked about to come

over in great detail so they can wave it and say this is how bad it really is. the problem is it's not going to be as scary as they think. >> if you hype it too much you run the risk that if sequestration does happen and the sky doesn't fall, then what do you say to people? >> the sky didn't fall. sorry. >> this would all be funny if it was really not very funny. but it's not very funny. >> the thing is, they're betting that the whole bet is that people in the public are going to care so much about cutting december it's going to -- defense it's going to make a difference in the election and the polls show that's not true. 76% of the americans think the defense budget ought to be cut. >> quickly to -- as much as i do want to talk about this and the impact of the dysfunctionalty, i think one of the examples of this dysfunctionalty was on the cyber legislation we saw last week. senate voted down the cyber bill 52-46 and it -- senator lieberman's worked on this for year in order to try to do it. largely it was you know even

after stripping the provision that businesses would not be required to pay the cost of government wouldn't make the requirements. it failed. don't we need a cyber bill and what was all that wrong about -- you know a bill that everybody at the end of the day recognized that companies are going to have to pay more money in order to protect their networks? sort of like fire safety. >> in some ways the bill wiz watered-down so much that it wouldn't have had the desired result even if passed. the defense department has already cut a deal with defense industry to create voluntary cyber security standards at least as strong as would have been in this bill and have put it in place without legislation. that's a model to all look at going forward. >> you say watered-down but some people say not watered- down. internet service providers would have had the chance to look into e-mails to screen them and i think that on a large ground you lose democratic votes just on that civil liberties sort of issue. >> but they do that now. i mean -- >> but you were saying it in law and that's a whole

different thing. >> isn't it better to be in law than in a clandestine fashion through intelligence services? >> i think that's not the political answer. >> the real problem is that thank goodness that the defense department is doing this on their own and president obama is end kates he's going to take more action through executive authority. the problem is now it sets congress up to only deal with this after a major crisis. the american people how vulnerable we really are and when congress reacts to a crisis we know how that's going to go and the legislation will turn out. >> i agree that's going to be a reactive situation and congress is inherently is reactive body. but we have to remember this is basically a new war fighting domain and it extends i don't understand just dod. it's -- beyond just dod. it's the national critical and we aren't serious about protecting that yet. >> do we think that there's any other -- is there going to be any chance for legislative resolution here at all? >> there's a pocket after that this -- possibility that after

the election there could be a compromise reached and pass both houses. >> i can see it being carried on some sort of defense bill. the piece of its critical pieces of it can be picked up and put on that. >> everybody is going to have to -- stay tune today see what it is that happens in a lame, lame, lame duck session. >> actually it's been called the mother of all lame ducks. >> guys, thank you very much. next a profile of the paralyzed veterans of amer

since 1946, the paralyzed veterans of america has fought for better health care for its members, as well as empowering vets to get better jobs and engage them with sports programs. my next guest, sherman gillams retired from a military career after being paralyzed and he was preparing to go to afghanistan with the first

marine division. and the accident ended his service career but not his call to service and joined the paralyzed veterans of america and now servez at the executive director for veterans benefits. sherman, it is an honor. welcome to the show. >> thank you. >> many service organizations have been created over the past decades but you guys are different. how was the organization founded and what have you achieved over the years? >> paralyzed veterans of america began out of a desire of veterans who did not want to wait on society to build quality of life. these were paralyzed veteran, following world war ii, who didn't have the available technology and equipment, the ability to apply to society at that time, and then decided they would have to work for themselves and thus began a movement. we now today, we now recognize today as the paralyzed veterans of america and it is a movement to ensure a greater quality of

life for veterans who suffer spinal cord injury and disease. >> and folks don't really think about it but there was not handicap accessibility and there was not the openness and there was a completely different view of paralyzed veterans at the time. >> let let's put it in context. a lot of people don't know that general george s. patten a world decorated war general, and survived world war one and two and died of a spinal cord injury. he survived 12 days. at that time, the life expectancy was two years for a paralyzed person. and of course, if you did survive that, you dealt with the social stigmas a misperceptions that often were a part of living with paralysis in society. >> let's talk a little bit about that. you guys have all of these programs for vets. but one of the important things you work on is research to try to cure paralysis, or to make progress on that. what are you guys doing? what is the overall program that you are working toward? >> well, our awareness campaign

is called mission able. and your viewers can find out more about it at mission-able .com. what mission able endeavors toward is creating a society where veterans can thrive, in the realms of jobs benefits and health care. and of course, research is part of that effort. we've donated about $1.4 million in research last year. and our other focus is involving greater job opportunities for veterans through our pay program, which stands for paving access, veterans employment, and our benefits services are also for veterans, and there is about $24 billion in benefits that go unclaimed every year. we strive to get more benefits. and raise awareness. >> equal opportunity. >> equal opportunity. and then in the health care realm, we perform site visits at all of the centers every year. and much of what we hope for is to restore the veteran whole in all areas of life. and some of that includes educating, society, and through the research and education

department. >> let me ask you this. this is kind of a long term challenge. when you go through wounded warriors, and paralyzed, there are initial costs and then later in life, it is kind of a long-term game and what are you guys doing to bank some of the resources so decades down the stream they will be there when your members need it. >> one major way we hope to invest in the future of paralyzed veterans, in a word, jobs. if we can make veterans more ployable, make them competitive, have them compete and give them the resources to compete in this economy, in the long run, what that portends for veterans 10, 20 years ago is, a self efficiency necessary to thrive in a community and that doesn't -- irrespective of disability. and what we're hoping now will pay dividends later on with our investment in creating more job opportunities for veterans. >> and are folks' perceptions of wound and paralyzed veterans changing do you think to the point it becomes almost irrelevant whether somebody is?

>> we're making incremental progress in that area but it still takes efforts like paralyzed veterans of america mission able campaign. as well as veterans like me to get out in society and participate in society, and assume pocks of leadership. and -- positions of leadership, and slow society that there really is -- show society that there was an ability where there once was a disability. for many. us. who want to participate and become members of society. in all levels. >> sure. thanks very much

over the years i've talk about the critical -- about the critical importance of protecting military capabilities and industrial competitiveness. pentagon, government and business networks are always

hacked. penetrated and raided with countless secrets and information stolen by criminal groups and foreign governments. and this is not just a pentagon problem. much of america remains too poorly guarded raising fears of a cyber attack crashing power, communication and banking. the senate had the opportunity to pass legislation to improve cyber security but even after much dilution the bill was voted down despite stripping a key provision that would have allowed the government to set key standards some were concerned the government would have imposed too much cost on businesses and exerted too much control over how businesses protect their computers and networks. businesses are always opposed to being forced into paying additional costs including for cyber security. but security is like fire safety. the expense of that protection is paid to safeguards one's own property as well as your neighbors and the community at large. we all benefit from the interconnected world but with that come greater responsibilities and vulnerabilities making

legislation that increases security for the common good imperative. thank you for joining us for "this week in defense news." i'm vago muradian. and before we go, i want to take a minute to say good-bye to someone very special to me and the success of this show from the very first episode. with boundless energy and good cheer, jesse eckert has produced more than 200 broadcasts whether from washington or paris, the decks of warships at sea to india and points in-between. logging many grueling hours of sometimes back-breaking work. jesse will be starting a new chapter in her life where she'll help many more people and she's going to georgetown university's nursing program to start a medical career. everyone at "this week in defense news" especially me will miss her very, very much and we wish her fair winds and following seas in all she does. i'll be back next week at the same time. until then have a great week.