Panetta: Curb Military Pay

Leon Panetta is poised to recommend that military salaries increase just 1% in 2014, thanks to "budget uncertainties," insiders tell CNN. This year, military pay was increased 1.7%, and last year, President Obama took military pay cuts off the table—so Panetta's recommendation will be interpreted as "cutting our pay," says an officer. Meanwhile, the outgoing defense chief raised alarm bells today regarding automatic cuts that could take effect next month, notes a separate CNN story.

Sequestration would prompt "the most serious readiness crisis" the military has seen in more than a decade, Panetta said. Some 46,000 jobs could be lost, Army training reduced, Navy and Air Force operations limited, and some 800,000 civilian workers furloughed, he said. "This is not a game. This is reality. These steps would seriously damage a fragile American economy and they would degrade our ability to respond to crisis precisely at a time of rising instability across the globe." (More Leon Panetta stories.)