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Leon Panetta: DOD cuts could up jobless rate by 1 point

September 16, 2011 12:00:00 AM PDT
Defense Secretary Leon Panetta said if lawmakers fail to agree on debt ceiling talks, they could add 1 percentage point to the nation's jobless rate.

The increase in unemployment would include government, military and private sectors jobs.

Under the current deficit reduction plan, the Pentagon must slash more than $400 billion in defense spending over the next decade.

If the deficit-cutting committee fails to reach a consensus, or if Congress rejects its plan, automatic cuts of $1 trillion would hit government accounts, with half coming from defense spending.

The trillion dollar total would be devastating for the military, forcing spending reductions that likely would necessitate shrinking the size of the Army, Air Force and Marine Corps to the smallest numbers in decades and also lead to the smallest Navy in nearly 100 years, said Pentagon press secretary George Little.

The Associated Press contributed to this story.