Secretary of Defense Leon Panetta testified Thursday before the House Armed Services Committee, promising audit-readiness sooner than expected and warning against defense spending cuts. (Austin Smith/MNS)
WASHINGTON — The Department of Defense, under fire for its unreliable financial accounting methods, will be ready for its first-ever audit by 2014, Defense Secretary Leon Panetta told Congress Thursday, promising to beat by three years a congressional mandate to be audit-ready by 2017.
“We owe it to the taxpayers to be transparent and accountable for how we spend their dollars, and under this plan we will move closer to fulfilling that responsibility,” Panetta told the House Armed Services Committee.
Congress in 1990 passed legislation that included a 2017 deadline for the Department of Defense to be ready for a full audit. The military has, for years, been under fire for its inability to accurately account for spending.
The Center for Public Integrity released a report this week that says the Pentagon’s books are “in worse shape than expected and it may need to spend a billion dollars more to make DOD’s financial accounting credible” according to defense officials and congressional sources.
Panetta also urged Congress to not allow any further cuts in defense spending.
“I don’t say it as a scare tactic. I don’t say it as a threat,” Panetta said. “It’s a reality.”
The hearing focused largely on budget issues.
Panetta was joined by Army Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff. The two offered stern warnings on further cuts to military budgets, which are on the chopping block as part of the debt reduction pact reached over the summer by House Republicans and the administration.
The defense budget decreases—$350 billion—created in the debt-ceiling agreement will “take us to the edge,” Panetta said. “More cuts will truly devastate our national defense.”
The Pentagon argues the number is closer to $450 billion because the debt reduction plan uses a different budget base line than the military.
The Deficit Reduction Supercommittee is working—mostly behind closed doors—to decide on $1.2 trillion in deficit reduction. If the committee does not come to an agreement before Dec. 23, that amount is set to automatically reduce from spending, split evenly between defense and all non-defense agencies.
Panetta also said President Barack Obama agrees with him that the defense budget cannot afford any cuts beyond those already in place.
Dozens of anti-war protesters came to Capitol Hill to speak out at the hearing. During the opening statements and Panetta’s testimony, several outbursts interrupted the hearing, leading to eight arrests.
Facing questions about the ongoing effort in Afghanistan—and the deaths and other costs that come with it—Panetta said good progress has been made in preventing Afghanistan from becoming the safe-haven for Al Qaeda that it once was.
Republican Rep. Walter Jones was not entirely satisfied with that answer.
“We got bin laden and Al Qaeda is dispersed all over the world. Lets bring them home,” the North Carolina representative said.
Committee members mostly agreed no further defense budget cuts should occur, and issued a recommendation to the supercommittee after the hearing.
If additional military spending cuts are implemented, the recommendation said, they “would pose a serious threat to the nation’s readiness to respond to current and future global security problems, break the back of out Armed Forces while slowing our economic recovery, and do little to resolve our debt crisis.”