Pentagon Does Not See Big Cancellation Fees From Cuts

September 20, 2012

The Pentagon's top money man again urged Congress to stop across-the-board budget cuts that he said would devastate the U.S. military, but downplayed the prospect of billions of dollars in contract termination fees forecast by some in industry.

Undersecretary of Defense Robert Hale said on Thursday piling $500 billion in additional cuts on top of $487 billion already planned for the next decade would hit operations and training, procurement and civilian personnel accounts particularly hard.

He told members of the House Armed Services Committee that the Pentagon faced $52.3 billion in spending cuts in fiscal 2013, with every budget category except military personnel facing a 9.4 percent reduction.

That meant the Pentagon would be able to buy fewer weapons and those it could buy would cost more, while work on ships and other bigger weapons systems would likely be delayed.

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