Pentagon puts 650 000 on unpaid leave

2013-07-08 22:09
(Picture: AFP)

(Picture: AFP)

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Washington - Heavy US government spending cuts took a sharp swing on Monday as the Pentagon began putting about 650 000 civilian workers on unpaid leave.

The department of defence's civilian employees face leave of up to 11 days through the end of the fiscal year on 30 September.

The time off will slash their pay cheques by 20% at a time when the US economy is crawling at a modest pace four years after the Great 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.

Defence Secretary Chuck Hagel announced the move in May as part of the $37bn cut from the Pentagon's budget under the federal government's broad spending reduction, or sequestration, that took effect on 1 March.

The defence budget took the biggest hit under the $85bn in cuts through the current fiscal year, a drastic programme implemented after political parties failed to reach a compromise over longer-term deficit reduction.

The sequestration lowers government spending by five percent, and Pentagon spending by about eight percent.

Hagel said he had made the leave decision "very reluctantly" because of the disruption to workers' lives and the impact on defence operations.

Ill-designed

The move is expected to save approximately $1.8bn, 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 forced time off, which began on 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 14 June, the IMF said growth would be only 1.9% this year due to the sequestration, when it had the potential of growing as much as 1.75% 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."

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