Constraints on Empire

It does cost money to maintain a large empire.

Budget strains force US to cut Persian Gulf presence

The USS John C. Stennis (file photo)

Potential deep budget cuts have forced the US military to reduce its aircraft carrier presence in the Persian Gulf from two carriers to one, Pentagon officials say.

Press TV,

6 February, 2013

Pentagon press secretary George Little said in a statement that Defense Secretary Leon Panetta ordered the reduction early Wednesday due to potential budget cuts that could kick in next month.

The US has steadily kept two aircraft carriers deployed in the Persian Gulf for much of the last two years.

“The secretary of defense has delayed the deployment of the USS Harry S. Truman, Norfolk, Va., and the [accompanying guided missile cruiser] USS Gettysburg, Mayport, Fla., which were scheduled to depart later this week for the US Central Command area of responsibility,” the statement said.

“Facing budget uncertainty -- including a continuing resolution and the looming potential for across-the-board sequestration cuts -- the US Navy made this request to the secretary and he approved. This prudent decision enables the US Navy to maintain these ships to deploy on short notice in the event they are needed to respond to national security contingencies,” it added. 

The USS John C. Stennis, which is currently deployed in the Persian Gulf, will return to the US when it is replaced later this month by the USS Dwight D. Eisenhower, which was brought home in December for maintenance.

According to US Navy officials, reducing the carrier presence in the region will save several hundred million dollars, including spending on fuel for the ships and the carrier's air wing, food and other supplies. The nuclear-powered US aircraft carriers each have crews of about 5,000.

The cutback in the number of the aircraft carriers represents one of the most significant effects of budget cuts on the US military presence overseas and is a result of automatic spending cuts, known as sequestration, passed by Congress during the summer of 2011.

The US Congress has not approved a budget for this fiscal year, and instead has been passing bills to continue the same level of spending as last year.

“We cut back to one carrier in the Persian Gulf region to save money now, or wait until sequestration and be forced to cut back to zero carriers,” an unnamed senior defense official said.

Under sequestration, the Navy would lose 4 billion US dollars over the next six months, the last half of fiscal year 2013. The Navy was already 4.6 billion US dollars in debt for this year because the continuing resolution for 2013 was budgeted at 2012 rates.

At a speech Wednesday, the outgoing secretary of defense criticized members of Congress as irresponsible and warned that the budget battles in Washington are putting the country at risk.

“The Department of Defense and other agencies across government have been living under a serious shadow -- the shadow of sequestration... Today, with another trigger for sequestration approaching on March 1st, the Department of Defense is facing the most serious readiness crisis in over a decade,” he told a crowd at Georgetown University.

“Make no mistake, if these cuts happen there will be a serious disruption in defense programs and a sharp decline in military readiness,” Panetta pointed out.

The decision to cancel the deployment orders for the Truman comes on the same day as news that Panetta is recommending military pay increases be limited to one percent in 2014. 

New US sanctions against Iran boost crude prices

Oil prices have jumped following new US sanctions against Iran, with Europe's benchmark Brent rising to $116.73 per barrel.

Press TV,

6 February, 2013

Oil prices rallied on Wednesday after the United States imposed new sanctions on Iran’s energy sector in a new attempt to force the Islamic Republic to halt its nuclear energy program. 

In London, the price of a barrel of European benchmark Brent closed at $116.73, up 21 cents from Tuesday.

New York's main contract, West Texas Intermediate (WTI) for delivery in March, closed at $96.62 on the New York Mercantile Exchange.

"The main mover this morning was the new US sanctions," said Rich Ilczyszyn at iiTrader.

"The market sold off pretty good this [Wednesday] morning and, on that story, came all the way back," the analyst added. 

On Wednesday, the US Treasury Department announced new sanctions targeting Iranian oil revenue. The sanctions prevent Iran from gaining access to earnings garnered from its crude exports.

The sanctions require the importing countries to keep their payments at home and only release them in return for purchases of goods from them by Iran, to effectively lock up Iranian oil revenue overseas.

Iran responded by condemning the measures as yet another act of hostility from the US government.

The US has spearheaded several rounds of Western sanctions against Iran in recent years, based on the unfounded accusation that Iran is pursuing non-civilian objectives in its nuclear energy program.

Iran rejects the allegations, arguing that as a committed signatory to the nuclear Non-Proliferation Treaty (NPT) and a member of the International Atomic Energy Agency (IAEA), it has the right to use nuclear technology for peaceful purposes.

In addition, the IAEA has conducted numerous inspections of Iran's nuclear facilities but has never found any evidence showing that Iran's civilian nuclear program has been diverted to nuclear weapons production.