The structure of the debt ceiling deal greatly undermines the super committee’s ability to engage in sound budgetary planning in several fundamental ways.
First, the agreement requires reductions of up to $350 billion over ten years for national security spending beginning October 1, without waiting for recommendations from a study initiated of strategic requirements by former Defense Secretary Robert Gates. Of course, the study can inform decisions in later years but right now, policymakers are arbitrarily setting spending targets without any thought to how cuts will affect our national security and military strategy.
Second, the deal dictates that the Defense Department will absorb an as-yet-unspecified portion of an additional $1.5 trillion in spending reductions that Congress is to approve by the end of this year. If there is no agreement on how to allocate those cuts, there will be an automatic reduction of $1.2 trillion over ten years starting in 2013, with $600 billion of that total to come from defense and other national security accounts. This approach introduces extreme uncertainty for those serving our nation in uniform and for the skilled employees in our defense industry. It’s the equivalent of playing roulette with our nation’s defense posture, but we don’t yet know where the ball will fall.
Third, the deal detracts from another great national goal: maintaining highly skilled jobs and bolstering the industrial base and technical know-how that support and sustain these jobs. With growing international demand for American defense and commercial aerospace products, the U.S. ran a $51.2 billion trade surplus in this sector in 2010 alone at a time when the nation is running trade deficits totaling almost $600 billion annually. Yet in the last few years, our aerospace trade surplus has dropped and employment in the industry has steadily declined from 936,000 in 1992 to 624,000 at the end of last year.
That leads to the fourth problem posed by the debt ceiling deal. Declining employment opportunities and looming budget cuts have triggered a commensurate drop in the number of young Americans choosing to pursue technical degrees. While other industries can cope with skills shortages by outsourcing work around the globe, government security requirements demand that U.S. citizens perform most of the work on military systems.
Moreover, maintaining the nation’s industrial base and a technically skilled workforce are essential not only to our national security but also to our economic security, directly supporting some two million middle-class jobs in 30 companies in all 50 states and indirectly supporting millions more in communities all across the country.
The super committee should refrain from further defense cuts without a clear analysis of exactly how those cuts will affect our national and economic security.
Additionally, congressional conferees should encourage prompt action on export control reforms and similar initiatives to ensure that the U.S. aerospace and defense industry can compete on a level footing in international markets.
Sensible budgeting sets priorities and leverages wisdom. Policymakers must remember that the aerospace and defense industry is the source of much of our technical preeminence. It has given us access to space, a safe and efficient air transportation system, and products and technologies like GPS that have become essential to our quality of life.
For all our sakes, we hope the owls prevail in the months ahead.
Marion Blakey is president and CEO of the Aerospace Industries Association.