If the debt panel produces less than $1.2 trillion in savings, automatic cuts are activated to make up the difference. So $800 billion in savings from the supercommittee would trigger $400 billion in automatic cuts.
By law, 18 percent of the automatic savings are assumed to come from interest costs the government would save from reducing the debt. If the supercommittee fails completely, out of the $1.2 trillion in automatic savings, $216 billion would be assumed interest savings.
That would leave $984 billion in automatic spending cuts. They are supposed to start in 2013 and be spread evenly over the next nine years, divided equally between defense and domestic programs. That works out to around $55 billion annually each from defense and domestic programs.
The Congressional Budget Office has estimated that for the Pentagon, that would mean a 10-percent cut in its $550 billion budget in 2013—a huge hit.
“Unless we act today, the dismantling of the greatest armed forces in history could begin tomorrow,” Rep. Howard P. McKeon, R-Calif., chairman of the House Armed Services Committee, wrote supercommittee leaders on Nov. 18 in a letter warning them of the consequences of the automatic defense reductions.
Senate Minority Leader Mitch McConnell, R-Ky., has said he wants to stick with the automatic cuts but would like to reshape them so they rely less heavily on defense.
Several lawmakers talked of the possibility of easing the impact of the automatic cuts on defense in interviews on Sunday news programs.
Rep. Jeb Hensarling, R-Texas, co-chairman of the supercommittee, said he hopes the current projected split of half defense, half domestic, for the automatic spending cuts will be changed in the event no deal emerges from his panel.
“But I am committed to ensuring that the American people get that deficit reduction that they were promised,” he said on Fox News Sunday. “But under the law, Congress will have 13 months to do that in a smarter, more prudent fashion.”
“Maybe sequestration is our only way we will get any kind of cuts,” Sen. Rand Paul, R-Ky., said on CNN’s “State of the Union.”
Rep. Jim McGovern, D-Mass., said on NBC’s “Meet the Press”: “If [Republicans are] going to try to protect defense, there’ll be pushback.”
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