I doubt many people realize the impact that President Barack Obama’s cuts to the military budget, not to mention sequestration stemming from an ill-advised agreement between Republicans and Democrats, will have on our country.
In the first instance, there will be a 9-percent budget cut. Sequestration would involve about 18-percent funding reduction between 2013 and 2021. Such cuts would affect not only on uniformed personnel but civilians as well. Military communities, including Manhattan and the surrounding area, could be hit very hard. Fort Riley already is working to make cuts wherever possible. T
Nationwide, Virginia, California and Texas would be most affected because they house the bulk of military related bases and production facilities.
Civilian companies — large and small — that do business with the Defense Department would suffer. For example, there are estimates that minority-owned businesses, which earned $33 billion in federal funds last year, would lose nearly $3 billion under the 9 percent reduction and nearly $6 billion under sequestration. No one knows how sequestration — officially the Budget Control Act — which would cut $500 billion, from planned defense spending over the next decade) will be administered. The only aspect that is clear is that the cuts would hurt the armed forces and their personnel and the businesses and their employees who provide goods and services for the military.
The problem for civilian corporations is that they have no idea how the cuts will affect them. Few of them will be hiring in coming months — at least until they know how they’ll be affected. We should also expect large-scale lay-offs if the bill is implemented. It is also worth noting that while some giant defense firms may make it through, many of their suppliers could end up bankrupt, thereby making it difficult for the giants to maintain production.
There is another significant problem associated with sequestration. Some defense workers operate in a special environment. Take, for example, workers who build submarines. They are highly skilled, and we have only two places where such boats can be built. To keep this expertise intact, the Navy has kept the two shipyards busy building at least one submarine at all times. These production personnel are a unique group with unique skills, and replacing them may be impossible.
We would not be the first country to go through such an experience. Russia is struggling with it. Russia let its military-industrial complex die on the vine. For practical purposes, Russia did not build any new weapons systems or equipment for 10 years; only three ships were built in the 1990s — using 1980s technology. Now Russia has to start from scratch. Most workers in Russia’s defense industrial field are over 60. The government is trying to lure qualified personnel back into the field, but it could take 10 years or more to get back in the weapons production business.
Sequestration wouldn’t just hurt production. Research, development, testing and evaluation of new weapons and equipment would also be set back. It takes a lot of money to move a ship from the drawing board to launch.
The journey to this point was ironic. The bill was originally passed both by Republicans and Democrats because its consequences were so horrendous that both sides had no alternative but to compromise. Unfortunately, the two sides’ positions have hardened.
In an effort to attract votes in the upcoming election, the president has said he will never agree to a budget bill unless it includes tax increases for the rich. The Republicans have refused to yield on that.
It is difficult to predict how this mess, created by Congress, will be resolved. A victory by either presidential candidate would not put him in position to resolve it; Congressional action is critical. Furthermore, we don’t know how the House and Senate elections will come out.
If one party should win the presidency as well as Congress, it would be in a position to resolve the crisis on its own. Otherwise, compromise will be necessary. Unfortunately, neither side appears willing to go that route.
Dale R. Herspring, a University Distinguished Professor is a member of the Council on Foreign Relations, and a retired U.S. diplomat and Navy captain.