US Defense Secretary Leon Panetta. (File photo)
The US Department of Defense (DOD) announced that 800,000 civilian employees are to be placed on unpaid leave if across-the-board budgets cuts take effect in March.
US Defense Secretary Leon Panetta told Congress on Wednesday that the Pentagon is to place nearly a million civilian defense employees on unpaid leave as congressionally mandated budget cuts worth USD 46 billion start on March 1.
"As a result, should sequestration occur and continue for a substantial period, DOD will be forced to place the vast majority of its civilian workforce on administrative furlough," Panetta said.
The plan aims to put most civilian workers on unpaid leave for one day a week for 22 weeks, starting in April and ending September 30 - the end of the fiscal year.
The furlough will cut the pay of civilian employees by 20 percent, and is expected to save up to USD 5 billion.
"The president has used his legal authority to exempt military personnel funding from sequestration, but we have no legal authority to exempt civilian personnel funding from reductions," Panetta said.
This comes as Washington state officials said on Wednesday that the region is struggling to cope with huge economic uncertainties posed by the massive federal spending cuts, which could place nearly 450,000 jobs at risk.
On Sunday, US Congressman Edward Markey said future automatic spending cuts will lead to a loss of 60,000 jobs and millions of dollars in funding for the state of Massachusetts.
The New England area is expected to lose as many as 80,000 jobs, with the US state of Virginia expected to lose about 207,000 jobs, following the cuts planned for March.
Democrats in the Senate support a USD 110-billion tax increase and spending cut plan that would postpone the scheduled cuts. However, Republicans are poised to let automatic cuts follow through - a move experts say would create another recession.
As lawmakers avoided the fiscal cliff about a month ago, deep spending cuts are expected to hit the Pentagon and federal agencies including the Internal Revenue Service (IRS), the Food and Drug Administration and the Department of Agriculture, as well as layoffs affecting teachers, federal agents and prosecutors.