Pentagon, defense industry brace for looming spending cuts

With Washington so far unable to avert the looming fiscal crisis, much of the attention has been on the more than $500 billion in tax hikes set to take effect Jan. 1.

But failure to strike a deal also means the first wave of roughly $1.2 trillion in spending cuts will hit starting next month.

Of that, about $492 billion will be carved out of the Pentagon over the next decade -- that's about $55 billion a year starting in 2013. It was a scenario so dire that for months Defense Secretary Leon Panetta had claimed his department wasn't even planning for it. Now, it could be reality.

Retired Army Gen. Jack Keane said the implications for the military could be "very serious."

He said the Pentagon is "already in financial trouble because there's already been a $480 billion cut that's being applied right now as we speak. And it will make it more challenging for the military to maintain its troops, its equipment, and its preparedness, Keane said.  Full Article