Congressional action, not grandstanding, needed to avert fiscal cliff
by Marion C. Blakey, AIA President and CEO
Originally appeared in Washington Business Journal, February 07, 2013
For over a year the Aerospace Industries Association has warned that cuts to defense and other important federal programs will take a huge toll, not only on national security and our “seed corn” investments in technology, but to our economy right now. It’s time to end the political gamesmanship and put the national interest first.
We already have a clear warning of what’s to come. In just the last month, Washington Business Journal reported that more than half of 100 government contractors surveyed by Grant Thornton LLP experienced flat or declining revenue and plunging profits in 2012. And in recent weeks, aerospace and defense contractors announced new layoffs — all due to a downturn in government spending. And now, for the first time in four years, our Gross Domestic Product is going into negative territory.
As Washington Business Journal readers may recall, a study conducted last summer for AIA by Stephen Fuller, director of George Mason University’s Center for Regional Analysis, found that if sequestration goes forward 2.14 million defense and non-defense jobs will be at risk — including 957,000 small business jobs. That would lead to a 1.5 percent increase in the unemployment rate, a reduction of expected growth in GDP of $215 billion, and the likely tail-spinning of the economy into a new recession. Fuller’s analysis found that sequestration would hit our region particularly hard, with Virginia at risk for 207,571 job losses, Washington, DC for 127,407 pink slips and Maryland for 114,795 tickets to the unemployment line.
While the economic implications of sequestration are bad enough, there are other fundamental reasons why the White House and Congress should do their utmost to find a better solution to our debt and deficit problems than sequestration. Clearly we need to avoid eviscerating our national defense. In a rare Jan. 14 letter to congressional leaders, the Joint Chiefs of Staff weighed in on the urgent need to de-trigger sequestration by issuing a stark warning: “The readiness of our Armed Forces is at a tipping point.”
They noted the Defense Department will be forced to cut training, furlough up to nearly 800,000 defense civilians (many in this region) and raid the accounts used to invest in the capabilities that keep our military second to none. The Joint Chiefs concluded, “We are at grave risk of an imposed mismatch between the size of our Nation’s military force and the funding required to maintain its readiness, which will inevitably lead to a hollow force.”
Sequestration will also seriously impact the operations of our nation’s air transportation system. The Federal Aviation Administration would be forced to cut back on operations and reduce the number of airport control towers and air traffic controllers, and the Department of Homeland Security would need to reduce the number of security screeners and custom officials. The traveling public and cargo providers will suffer delays as a result.
And as AIA warned in a new study conducted by Fuller last fall, sequestration will hinder NASA’s ability to develop America’s next generation of launch vehicles and spacecraft and significantly delay federal work on vitally needed weather satellites. Other important government functions — everything from education, food inspections, law enforcement and border security and medical research — will also take a hit.
Sequestration is no way to run a great nation. The outlines of a balanced, bipartisan approach to our nation’s debt and deficit issues — a combination of targeted budget cuts, entitlement reforms and additional tax reforms — are well known. It’s time to act.
