in our army if we allowed sequestration to go forward. with 50% of that reduction coming from the garden reserve. and i think this is an issue that governors aren't aware of fully yet. although, elected officials at all levels in this country are becoming aware of it. in fact, the council of mayors recently issued a resolution on the effects of sequestration, urging congress to come to an agreement on it. think about it. 100,000, 50,000 from the garden reserve, and the function that our garden reserve play. we couldn't have fought in iraq or afghanistan without the guard or reserve, and they also play a very important homeland function for our security as well as responding to natural disasters for our governors. let's talk about the marine corps. under the initial reductions that are likely to happen, the marine corps is going to be reduced at this point by 20,000. . if sequestration goes forward, they will face an additional 18,000 in reduction in our marine corps. here's the thing that keeps me up at night. the assistant come candidate

we're on this suit now of sequestration. we made a promise and i would say we disagree -- i do agree with we ought to make decisions and we elect people to make wide decisions and that would be 2.1 trillion including 900 billion we got last year and it's only a down payment so there is some progress so let's give a little credit even though they backed off and want someone else's fingerprints on it rather than the committee. it still is a move in the right direction. all things considered, it's a lousy way to do thing, but we have to do it and not only that, we have to do a lot more of it and there will be big, political repercussions either way. in the long run, if we continue to kick the can down the road then there will be repercussions down the road if you take big steps now there will be repercussions now and the worst thing about the way we're doing it now is we'll take a big hit on public dissatisfaction and defense contractors and so forth and then we'll have to come back and do it again, and come back and do it agai

i asked him about the impacts of sequestration, and he said this. sequestration would render the marines incapable of conducting a single major contingency operation. think about it, our marine corps. that to me is a shocking statement and one that cries out for us on a bipartisan basis to resolve this issue. and if the department of defense chooses to protect manpower accounts when the army and marine corps would have to cut even more deeply than into training, maintenance and modernization funds which, of course, would have a negative impact on industry, which we're going to talk about in a minute, secretary panetta has said that sequestration would result in us having the navy bring us back to 1915, ground forces back to 1940 before where we were before world war ii, and the smallest air force in the history of our country. we would have to potentially undermine contracts and agreements that we have, including the joint strike fighter, the kc-46a super tanker and many of our modernization efforts that are under way right now that are very, very i

i asked him about the impacts of sequestration and he said this, sequestration would render the marines incapable of conducting a single major contingency operation. think about it. our marine corp. that to me is a shocking statement. and one that cries out for us on a bipartisan to resolve this issue fch the department of defense chooses to protect manpower accounts when the army and marine corp. would have to cut more deeply than into training, maintenance and modernization funds which of course would have a negative impact on industry, which we're going to talk about in a minute. it would result in us having a navy bringing us back to 1915. ground forces back to 1940 before world war ii, and the smallest air force many the history of our country. many of our modernization efforts that are underway right now that are very, very important to making sure that our men and women in uniform have the very best equipment to protect our country. but in conjunction with this, no one would say that the department of defense is an area where it's a jobs program. but the reality is that sequestra

>> on sequestration? >> on ways to avoid se kwe sequestrati sequestration? >> there's been so much written. many of you with the paralysis one sees on the industry side. there's i don't know how many hundreds of billions or trillions of dollars or cash on corporate balance sheets. and the reality is that corporations aren't going to invest in capital until they get some sense of the environment that they're investing into. and so this continued turmoil and uncertainty of continued paralysis. and if we're really looking for private sector investment to have a major role in bringing our committee back, we need to create an environment where business can at least understand the environment in which it is expected to do business. and therefore be willing to -- to invest. so, you know, all of what senator levin is talking about is just another color on this continued confusion and uncertainty, which has business standing on the sidelines waiting to see what will happen. and to expect business to act before they see that is simply foolish. it won't happen. >> gene

>> of sequestration? there has been so much written by many of you about the paralysis that we see on the industry side. i don't know how many hundreds of billions are trillion dollars of cash on corporate balance sheets, and the reality is that corporations are not going to invest in capital until they get some sense as to the environment they are investing in two. this continued turmoil and uncertainty continues the paralysis. if we are really looking for private sector investment to have a major role in bringing our economy back, we need to create an environment where business can at least understand the environment in which it is expected to do business, and therefore be willing to invest. all of what senator lebanon's talking about is just another color of continued confusion and uncertainty that has had business standing on the sidelines waiting to see what is going to happen. to expect them to act before they see that certainty is just foolish. it will not happen. >> my sense is that there is a bit

they want to avoid sequestration. the big problem besides whether is when. is the greatest problem we face. i'm confident that we will avoid sequestration, but if it comes in a lame-duck session or thereafter, it could be too late in order to avoid a severe beginning of the economy, which results from the prospect of sequestration. business folks have got to plant. families have to plant. you cannot plan if you don't know whether or not there's going to be contracts coming in january or not. that uncertainty which is created by the threat of sequestration, i believe, is a real threat to this economy. not only must we avoid sequestration, but we must do it in time to avoid a severe weakening in this economy. that is the greater challenge that we face it, to see if we cannot possibly reach the kind of compromise which we know will be there at the end, but to do it in time to avoid this kind of mindless and very dangerous weakening of the economy. thanks. >> thank you, senator. we will open up to questions and answers fr

tax increases aren't going to pay down sequestration. that's just to get everyone at the table to talk about sequestration. there's no dollar for dollar offset here. same thing with obamacare, potentially. money is freeing up from the supreme court, for example. that depending on how they rule. well, let's dust off simpson/bowles, the president's commission because that's become a favorite position for a lot of members because there was a lot of work and thought that went into it. what it gives us on the defense side is the exact recipe senator levin has outlined, which is there are significantly more defense budget reductions beyond the $487 billion as part of the budget control act. if to you break down just the defense side, and i think it's always great to look at these in mass. it's important because it looks at the whole budget, just like rivlin/domenici. that's one play and that's key one. i'm glad that if we're going to dust off any plans, it's a plan to look across the federal government and federal spending writ large, but if i

i worry very much about sequestration. i want to talk about how we can avoid it, because i think we must. most of my colleagues, not all, but most of my colleagues in both parties see sequestration as a mindless kind of threat to a sensible budgeting process, threat to not just important defense priorities, but to a lot of other priorities of our nation, including education, including health care, transportation, environment and many other critically important challenges that we must meet, we must face. there's already, for instance, on the domestic discretionary side, been a 15% reduction from 2010 to 2012, 15% reduction, and that is unacceptable as well as mindless nonprioritized cuts in the defense budget. so how do we get out of the mess that we face. we've got to make hard choices and the only choice that really is an acceptable one, the correct one, one which is politically feasible, is to have a balanced solution. a solution which includes additional spending cuts but prioritized, prudent. no area can be exempt. gen

we're going to get past see sequestration. it would be devastating. it would be disasterrous. it would result in over 1 million jobs lost if we electric v. to tack on another $5 billion or $6 billion. >> as defense companies are already making clear given their legal obligations to start notifying people well in advance of layoffs. but originally, there was the contingency funds were not supposed to be part of it. now the guidance has come from omb that it's going to be part of it. what impact does that have, john, on the entire see sequestration mess? >> back to george's point. see sequestration is not supposed to happen, but yes, overseas congress is he funds are not going to continue to exist if there is a sequester. that could have a dramatic effect on the ability to resource the war in afghanistan. there's no question about that. and our position is, that's the last place we'd want to take resource as way from this department is for the troops that are on the line out there in afghanistan. >> senate arm services committee

that is not sequestration. the room for error in the defense industry is actually much smaller than many people a few years ago would have told you. >> i'll end on three quick points. first, december piet a real diversity of folks on different panels, there has been a fair census around and the main one being the insanity of the predicament that we have placed ourselves into. placed ourselves into in the long term. but also place ourselves into in the short term. we may have disagreement on what to do next. but i think that's a big take away from me is that no one supporting this me ax-like approach. the second is the notion that these lean times will force politically painful choices. but not necessarily strategically painful. and that's why they call for leader shin. lead ir ship, which we've heard has been lacking in this context, is about two things. leadership is not only about making smart, strategic decision, but it's about making tough choices. and i hoech we hope we see that. and then the third is the

any form of sequestration. even when you exempt certain accounts, still take an up tick in unemployment. it just doesn't save much money. so then why would you do it on that as well, in my opinion. and what should happen. back to the three bigger plans that i referenced, like the super committee, or others, gang of six. it had a lot of things in there. senator coburn has a new budget to restore the american dream. there are lots of debt reduction plans out there. since we all know some -- any debt reduction plan will have to tackle something to do with taxes. however it turns out. all that work has to get done now. we should be doing the work on the the committee level in the congress now. other smart people on other panels, when we have talked about their experience on domestic spending and tax policy issues. when president reagan and the congress may cut multiple deal, unto include major tax overhaul, but it doesn't happen overnight. there have been four years of ground work that have been laid before the fin

and have sequestration? i mean, think of the logic of it. 30 or 40ers yoo a eryears ago w of the budget on programs we think are appropriate. now we're down to 35%. so there's been a huge shift of federal spending to the entitlements and we're not willing to do anything about entitlements. we're not willing to increase revenues so what do we do? we screw defense and come up with some idiot thing like sequestration. the money is good, but the focus this one area, because politicians are reluctant to tackle the heart of the problem, it just -- it doesn't make sense. one thing about the psychology of this that we want to ponder is meetings like this and comments like the senator made show that people are made aware that, wow, if we cut defense as much we could be jeopardized on security and the secretary of defense and all kind of powerful statements and the americans are listening to that and that's exactly what steve wanted to happen when he invented sequestration. he put so much pain on people and the threat

it's not just sequestration, and we voted earlier. the majority of us did, that sequestration be only if we were unable to reach consensus, and the understanding was put everything on the table. but now we find people who are calling for more military action on the parts of the world. at the same time, they do not want to consider any way of paying for it, unlike what we've always done in the past. what would be the impact of going to war again without committing to pay for that war with up front taxes. something we did not do in either iraq or afghanistan. for the first time in the history of the country. >> obviously, if we repeated the mistake of not paying for the war that we decide to engage in, whatever that might be, the result would be that you would simply add more to the deficit and to the debt of this country for the future. you just put that burden on our kids for the future. and, you know, look. i think we always have to be careful when we make the decision to put our men and women in uniform into harm's way. that's numbe

so sequestration is tough, then, and it's tough in its mechanics. as the first panel mentioned, sequestration means quite simply a cut, probably about 10%, to each account. that means in it's 06, 02, 8675390, spending $350 million on basic r & d and take-out laser, it's take out 10%. it's such a difficult way to go about cutting the defense budget that it's simply, i think most of us would agree, a non-starter in terms of sound, fiscal management. so i want to talk about two ways that we might see this unfold and tell you why we really need to avoid sequestration and get to the place we need to go, which is a strategy-driven, hard set of choices about our future defense budget. when we think about the worst case of sequestration, the image for me that comes to mind is a fire base in afghanistan or any place else that's not able to get its c-17 or c-130 airdrop of water, wood, blood, ammunition, whatever those troops have asked for, but there are other parts of the defense budget that are also likely to suffer. the one i want to talk about here is th

what is going to happen in sequestration? they will have 80% of the funds they would have needed to do the construction at the pace it was intended. does that mean they fired 20% of their work force and drive this because of the inefficiency they introduced? >> i do not know if there are any contract officers. the governor will probably save the determination and they will go and say we told do a subject to appropriations. we do not have it. the been the contractor will say we have a contract here. its as if you do this to us will be billion in damages. at some point you have to say how much will we save by cutting best? , is will we pay in damages because of the contract? we trying to do this now. define this. you're going to have to cut more than 500. you're going to pay substantial penalties for weapons systems that are half way through. because this kind of silly. >> if you could sum up anything that is on your mind. >> i agree that the government will shut down. if i did not agree, i will not say so out loud. we went thr

and sequestration is hard. one thing that i think would be cut pretty quickly are the partnership and cooperation activities. i think of exercises. all the services the marine and army do. all the exercises with international partners on a regular basis. i would expect to see that go away. that would be a real loss. those are things that have great value and help bond the coalitions that we all now rely on. it would be hard to see that go away. that would be a source of tension. there are probably larger issues in the transatlantic dialogue. but the budget thing is there really on both sides. so we'll all be working through that, almost regardless of the direction of sequestration. good question. >> okay, we have time for one last question if anyone would like to ask it. so with that, we want to offer each of you the opportunity for closing remarks. i want to emphasize the need for strategy sources. the number one thing we should not do is chase after tilted windmills and chase after the things -- go on a child

, why are we here in how sequestration? mean, think of the logic of it. 30 or 40 years ago we spent something like 55% of our budget on programs not appropriated. our denver something like 35%. this issue shift to the entitlements and were not willing to do anything about entitlements. we're not going to increase revenues, so what do we do? we come up with something like sequestration. the money is good. we've got to do this. we'll do it even broader, but the focus on this one area because politicians are like them to tackle the heart of the program just doesn't make sense. no one thing about the psychology we had to ponder his meeting site based on comments like the senator made show that people are aware, wow, it would cut defense is much cooler could jeopardize our national security. secretary of defense, generals make powerful statements that americans are listening to that and that is exactly what steve wanted to happen when infinite sequestration. he was supposed that so much pain on people that they'll do the right t

and i call the sequestration the biggest national security threat that you've never heard of. and the american people need to know this threat to their national security, to the protection of our country, which is our fundamental responsibility under the constitution. so i fully support the amendment that senator mccain has brought forward on the farm bill, that he championed along with senator levin on the defense authorization, because we can't aford to keep -- afford to keep hiding the details of what will happen to our department of defense and our military if sequestration goes forward. and just to be clear, as senator thune has already identified, the department of defense is taking significant reductions in the proposed 2013 budget from the president. the department will take approximately $487 billion in reductions over the next ten years. that already means a reduction of approximately 72,000 of our army, a reduction of 20,000 of our marine corps, but what we're here talking about today is an additional $500 billion to $00 billion in rye ducks coming in -- $500 billio

i cannot to the details, but i think that it is almost inedible result of sequestration. >> the we sequestration works right now is it takes the percentage possible out of every area of the defense budget. this means that -- it is an almost 20% cut in weapons systems. a 20% cut with regards to training and equipment. it would impact every area of the defense budget. that is the way it was designed. it was designed as a new tax. it was designed to be a disaster. the hope was that because it is such a disaster congress would respond and do what was right. i'm here to tell you -- yes, it would be a disaster. >> o the across-the-board cuts will not impact upon pay, health programs, anything else? >> it would. the president has the authority, mr. chairman, to exempt military personnel -- if that were the case, it would not affect military personnel. but other accounts would have to be cut by larger amounts. it would affect our ability to pay health care. it is in a separate account. meat axe cut -- to face a serious problem of not being able to pay all our bills. >> mr. chairman, could i add somethin

. -- known as a sequestration.eginning on january 2, 2013, if the deficit reduction agreement is not reached, the department of defense will take a reduction of nearly $500 billion over the next 10 years. gentlemen, i look forward to having a candid dialogue this morning on this issue, as well as others i have highlighted. we sincerely appreciate your service to our nation and the dedication and sacrifices made daily by the men and women of our armed services. we could not be more grateful for what those who wear our nation's uniform and those who support our military to for our country each and every day. mr. secretary, general, your full statements will be made part of the record. i will now turn to the vice chairman for his opening remarks. coc senatehran. >> am pleased to join you to review the senate -- and the dip -- request for the department of defense and overview the challenges facing our national security interest. we thank you very much for your willingness to serve in these important positions. they re

i might also say the sequestration clearly it's hard may be too hard and too fast and the sequestration defense would end up with the same percentage of the gnp that it had when the budget was in balance. so my question to you is one to take a step back and go back to your history with the budget to. what is the ferre number for us when it comes to the defense of this country and security. i know we need every dollar it takes to be safe. but if we are going to cut back in health care and education to provide more money on the military side is that going to have an impact on the men and women who volunteer to serve in our military and whether they are qualified to serve? >> first, with regards to the defense budget, i do believe we have to play a role and the fact is that we are going to be cut in half a trillion dollars from the defense budget over the next ten years. and this is part addition to sequestration. >> if you have sequestration to that you're looking at another chunk of the $500 billion on top of it. so i think it does have to play a role and at the same time i think we have

if sequestration if sequestration dozed through it will probably affect all three services equally which will be a strategic disaster for the united states i think that most honest i want to say analysts would agree that you could cut the u.s. defense budget substantially even by sequestration levels if you also cut the strategic commitments of the united states. but sequestration isn't about cutting strategic commitments it's about an across the board cuts. doesn't involve some sort of fundamental reevaluation of american foreign policy priorities and so even people who think that it's ok to cut the defense budget should be a little bit wary about how exactly sequestration is going to go through because it's going to be a mess when all three services are being cut and you're not having any sort of sensible scalpel you're just you're sort of using a hatchet to cut the defense budget and that if they go through with it of course they're doing everything they can everything they possibly can to stop it robert thanks so much for joining us tonight thank you very much for having me. i coming

and the impact of possible automatic budget caughts called sequestration next january. he spoke at the american enterprise institute and called the automatic cuts completely irrational from management point of view. thomas donnelly, co-director of aei's center for security studies starts the hour 10 minute discussion. >> welcome everybody. my name is tom donnelly. i'm the co-director of the maryland center for security studies here at the american enterprise institute and i'm going to get off the stage as fast as i can because you have come to hear dr. ashton carter, the deputy secretary of defense, whom we are pleased to host today. it was secretary carter's idea that he'd come and talk to sous i just agreed immediately. knowing a good thing when i saw it and i look forward to his remarks. there was a squib in politico saying that dr. carter was going to vicariously defend the administration's defense plans. i don't know if that was our leak or his leak but i'm sure he is more than capable of doing that. when he's done, he's going to run his own meeting and we'll go di

>> sequestration is disastrous. across the board cuts with some formula divisions, the offense takes a horrific cut. i think we need to set priorities. house passed legislation to avert some of those cuts in sequestration. i understand as we are recording this that the senate has taken some action, calling on the administration to come back with some impacts with what the sequestration will beat. the administration, even though it is the law, has been unwilling to say how they would implement this law. we need to get that information. i think it is incumbent upon us to set priorities. our first priority is to do something to get this economy going. we have been in the situation of unemployment over 8% for 40 months. we have this very weak recovery. you get this bad economic news that comes out. we just had very low job creation in this last month. and so, our priority needs to be to take action to see this economy grow and that means that you have to get the private sector engaged and get them to create jobs. that a

defined sequestration. guest: across the board cuts. host: wire we talking about this?y are we talking about this? guest: in 1985 the said we need to have process, and that is the first time i heard the word sequestration as across the board cuts. we have been signed into law by president reagan, but that was the first and only significant sequestration, so for 25 years it has been dormant. host: is a useful to study what happened to the economy after the first round of cuts? guest: probably not. we're in the middle of the recovery and not have the same problems. the united states was a superpower, so this is different. host: i am guessing that people watch this not work watch congress closely, but sequestration is discussed because of what sequence of events? guest: in 2011, the new congress came in and they wanted to cut spending, especially in the house and they passed a bill that they thought would save $33 billion. it only saves about 430 two million dollars. they were angry about that. -- 430 two million dollars. they were angry about that, especially in the repub

but sequestration isn't about cutting strategic agreements it's about an across the board. that you know doesn't involve some sort of fundamental reevaluation of american foreign policy priorities and so even people who think that it's ok to cut the defense budget should be a little bit wary about how exactly sequestration is going to go through because it's going to be a mess when all three services are being cut and you're not having any sort of sensible scalpel you're just you sort of using a hatchet to cut the treads budget and that's that if they get us there it is of course they're doing everything they can everything they possibly can to stop it robert thanks so much for joining us tonight thank you very much for having me. i coming up after the break you said i've got it and we'll tell you how much it'll cost you to play your favorite song and if you made your way to let's play it after the break. from the. video.

, at the end of the day under sequestration, defense would end up with the same percentage of the gnp that it had when the budget was in balance. so my question to you is one to take a step back, perhaps from your role and go back to your history with the budget. what is a fair number for us when it comes to the defense of this country and security. i know we need every dollar it takes to be safe. but if we are going to cut back in health care and education to provide more money on the military side, isn't that going to have an impact on the men and women who volunteer to serve in our military and whether they are qualified to serve? >> first and foremost, you know, with regards to the defense budget, i do believe we have to play a role. and the fact is that we're going to be cutting $500 billion from the defense budget over the next ten years. >> under sequest -- in addition to -- >> and then if you add sequestration to that, you are looking at another chunk, $500 billion on top of that. so it does have to play a role. at the same time we have a responsibility, obviously, to protect

i'm joining senator mclean shortly -- senator mccain shortly to see that all aspects of sequestration -- it calls for an amendment not only to the defense department, but the painful cuts to education and food safety and many of the programs that middle-class families and the most vulnerable americans depend on. i think this is a strong sign that both sides understand the pain that sequestration would inflation. both sides agree it is a terrible way to cut spending. my hope is that it will show both sides that we can and must work together to reach a bipartisan deal required to replace the automatic cuts responsibly and fairly. but where there are glimmers of hope and clear signs of bipartisanship here in the senate, there is this more of the same in the house. in fact, instead of working on passing a transportation jobs that passed the senate, or taking a bipartisan legislation to protect vulnerable women, or working with us to signify support on the job creating a farm bill, the house republicans went with none of the above. instead, they decided to create a partisan political theat

sequestration is tough. as a first panel mentioned, sequestration means a cut, probably 10%, to each account. if it is spending $51 million, take out 10%. it is such a difficult way. i want to talk about two ways we might see this unfold. i will tell you why we need to avoid sequestration and get to the place we need to go, which is a strategy-driven heart set of toys. -- hard set of choices. when we think about the worst case, what comes to mind is a place in afghanistan that is not able to get its share drop of water, ammunition. there are other parts of the are likelyget hyathat to suffer. you all know what the counts are about. they are put together for fy 2013. they comprise $70 billion. even if we have a stay of execution, one possibility is for congress to go back and say, we are not going to make you cut 10%. we'll give you a bogey of $50 billion. we will let you find a way to go at it. when you have $70 billion in r&d, maybe that is a tempting target. let's talk about the basic part of that. these a

let me just say a few words about sequestration. obviously, this is a great concern. the doubling -- this would result in a doubling of cuts. another $500 billion that would have to be cut through this kind of formulaic meat ax approach that was designed into this process and it would guarantee we hollowed out our force and inflict severe damage on our national defense. i young all recognize that sequester would be entirely unacceptable. and i really urge both sides to work together to try to find the kind of comprehensive solution that would trigger sequester and try to do this way ahead of this potential disaster that we confront. i know the members of this committee are committed to working together to stop sequester, and i want you to know that we are prepared to work with you to try to do what is necessary to avoid that crisis. the last point i would make is on fiscal year 2012. we have some additional needs that have developed during fiscal year 2012. just to summarize a few. with regards to fuel costs. because of the increase in fuel costs, we're facing almost

do you get the feeling that some of these cuts don't make sense, sequestration kicks in.were looking for some guidance. they said what should we do? stick your head in the sand, forget about it, don't pay any attention to it. well, their attorneys say you can't do that. >> so let me ask you about how we're in that position. we're in this position because there was a deal struck after the debt ceiling last summer by speaker boehner. that deal was, look, we're going to find cuts. if we don't find cuts, we'll do these $1.2 trillion in automatic cuts, designed to be awful for democrats and republicans and cause a lot of lay-offs. but putting that scary bogeyman out there, the super committee will find cuts. they abysmally failed in doing that. here is what you had to say about john boehner and that vote recently. speaker john boehner came and met with our committee and >> we are going to repeal it and do everything we can over the course of how long it takes to stop this because it will ruin the best health care system. they have 126,000 employees. we're looking at, if this f

secretary, if we do not change the sequestration dilemma, if we don't do something before it before the election, when can we expect layoff notices to hit? >> obviously industries make that decision, but under the law they've got to do it 60 days and anywhere from 60 to 90 days before it takes effect. >> you have to lay off civilian employees as a result of sequestration. if, in fact, it ultimately takes effect we'll take the same thing. if you do the same thing, 60 and 90 days before, and i just want to say that it seems the bipartisanship that we've had in recent memory is to destroy the -- so the sooner you can tell us about the number of jobs to be lost and how it will affect during defense base, i think the better for the congress as a whole. you're telling us about track here. you're telling us you have a budget problem. when was the last time track premiums were adjusted for the retired force? >> '93. '93. members of this committee. i know we love our retired military members and i hope to be one one day, but isn't it unsustainable for you if we do not bring this program into som

they deserve better than the threat of sequestration. too often today the nation's problems are held hostage to the unwillingness to find consensus and compromise. and in the face of that gridlock, artificial devices like sequester are resorted to in order to somehow force action. but in the absence of action, sequester could very well threaten the very programs critical to our national security, both defense and domestic. let's not forget that sequester would also involve drastic cuts in domestic programs, as much as 12% across the board on vital programs that americans rely on. congress can't keep kicking the can down the road or avoid dealing with the debt and deficit problems that we face. men and women of this department and their families need to know with certainty that we will meet our commitments to them and to their families. our partners in the defense industry and their employees need to know that we are going to have the resources to implement the strategy that we have put forward and that they are not going to face the thre

sequestration. sequestration. ok. we also have pickle's just to balance things out.jubilee. us not what you said? wolf pulitzer. that is not a word, that is an epic event. blitzer. cotillon, you never hear that on hot 97. filibuster. let's get two more words. compromise. way back there in the glasses. sorry? segue. perfect. now i need something. there are a couple of guys that they are angry about everything. i am going to be angry right now, too. i am angry about something stupid. unmatched socks. something i am angry about. puppies. puppies and unmatched socks. why don't we do that. with all of my family from howard be able to come over here? or would that be a logistical nightmare? he is running, with the symbols -- with cymbals. ♪ look at that. you can skip with attitude. that is amazing. ♪ a hand-held for this one. hello, gentlemen, ladies. you guys follow with whatever he is playing. make this up on the spot. everybody over 50 is seeing you. ♪ puppies, mismatched socks, i am a bachelor i hate being a bachelor listen i cannot even cut my yard i just sit at home

one of the bigger issues is the sequestration. that is a 50% cut on defense, on domestic spending that is going to happen automatically on january 1. i do not think congress is capable of acting between l and the first of the year to avoid sequestration. the question is, how quickly can they act after the first saw the mitigate some of the problems? that is going to cause real problems in the defense industry. it is going to cause real problems on some domestic programs. i think congress will do something about that in the january, february, and march time frame. apart from whether there is some external economic problem, they have to deal with these automatic cuts. no one thought they were going to happen. everybody thought it would hang there. congress deadlocked and said, -- >> i think it is going to depend on the makeup of the new congress. if republicans take the presidency, the house, and the senate, they will wait to do something. they will do it their way. if you have continued divided government, they may get together and

-- prospect of sequestration. the secretary of defense has stated that sequestration would have a -- quote -- "devastating impact on our national security." we're talking about layoffs and some estimates are of as many as a million workers in the defense industry. we're looking at unknown effects of the strategic thinking that goes on as we plan to defend our nation's security. for example, our shift in emphasis from europe to asia-pacific, which requires significant air and naval assets, amongst other things. and i'd ask my colleague, i'm not sure that the american people are fully aware of the effects of something that is supposed to take, as i understand it, beginning of the next fiscal year, which would be the beginning of october of 2012. is that a correct statement, i'd ask my colleague? mr. graham: yes, it is. mr. mccain: so we're asking the defense department to plan on what our force structure will be, what our mission will be, what our capabilities will be beginning the 1st of october, and all i can see

under sequestration, the navy would be down to 250 ships. we'd have the smallest navy, the smallest air force in the history of the country and the army would go back to 1940 he feels will. do you believe the world has gotten that much safer are that we don't need a navy bigger than 1950, given the threats we're facing from iran, china, north korea? do you think now it's good time for the country to basically disarm, given the threats we face from radical terrorism throughout the whole globe? so here's what we're going to do. and our congressional leaders need to be on notice. about a million people would lose their jobs if we put these cuts in place and we would destroy the defense industrial base that provides good jobs to the economy and keeps us free and safe by giving our people technology better than the enemy has. three national guardsmen were killed in june in afghanistan. we've improved the national guard, but when we first started this war, national guard units were leaving to go to the fight with inferior equipment. they didn't ha

i think the sequestration and it's hard and fast -- hits hard and fast. at the end of the day, it is the same percentage of gdp as when it was in balance. perhaps you could go back to your history with the budget. what is a fair number for us when it comes to the defense of this country and security chris burrous i know we need every dollar it takes to be safe. if we are going to cut back on health care and education to provide more money on the military side, is that going to have an impact on the men and women who volunteered to serve in the military and whether they're qualified to serve? >> first and foremost with regards to the defense budget, i do believe we have to play a role. we will be cutting half a trillion dollars from the defense budget over the next 10 years. if you add sequestration, you are looking at another chunk, $500 billion on top. defense has to play a role. at the same time, we have a responsibility to protect the strongest military in the world and defended this country. -- and to defend this country. you know this as well as i do

it reveals less optimism sequestration would be avoided. tyler, in california alone, lockheed martin's payroll is $3.5 billion. that's a lot of taxes the state needs right now. all matter where you will make the cuts. we can't afford it all. >> you bet it is. jane wells reporting. >>> when you go to finance yahoo!.com today, you will see a cnbc poll. we ask which is the following is the biggest headwind facing the markets right now. the crisis in europe, upcoming fiscal cliff and uncertainty over health care. more than 20,000 of you have voted so far. right now, the crisis in europe is leading the way. 52% to 39% with just 9% fretting over the uncertainty about health care. we'll get another check later in the hour. for now, go vote at finance.yahoo!.co finance.yahoo!.com. >> it is anything but sunny these days. tropical storm debby is finally weakening after flooding parts of mississippi, alabama and florida and then it heads to georgia and headed north. some parts of georgia have been hit with 26 inches of rain. debby has also spawned tor