Aerospace industry campaigns against further defense cuts

The defense-aerospace sector is lobbying supercommittee members not to make any additional Pentagon budget cuts, saying they could hinder America’s national security, force thousands of job losses and further erode the nation's economic viability.

But defense-aerospace firms’ lobbying push will extend far beyond the Capitol Hill offices of the 12 lawmakers that make up the bipartisan panel charged with finding a minimum of $1.2 trillion in federal spending cuts.

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The Aerospace Industries Association (AIA) unveiled a sweeping persuasion campaign Wednesday — funded by defense and aerospace firms — that will target lawmakers, Obama administration officials and the American public.

James Albaugh, Boeing’s commercial aviation chief and AIA’s board of governors chairman, summed up the lobbying effort by calling the defense industrial base an “arsenal of freedom” that is vital to America’s economy.

But he said he is no longer so sure many on Capitol Hill agree with that.

AIA officials and industry brass met with Defense Secretary Leon Panetta, saying the Pentagon chief at a Tuesday meeting indicated he is determined to “protect” the U.S. industrial base as annual military budgets shrink.

The trade association and defense-aerospace executives also already are making the rounds with supercommittee members, having already met or scheduled to huddle soon with Reps. Pat Toomey (R-Pa.) and James Clyburn (D-S.C.), as well as Sens. Patty Murray (D-Wash.) and Jon Kyl (R-Ariz.).

But “we’re reaching out to every member we can” because when Congress takes up measures that could force more Pentagon budget cuts, “every members’ vote will count,” AIA President and CEO Marion Blakey told reporters Wednesday.

The association and its defense-aerospace members will take a multi-pronged message to lawmakers, administration officials and the American people.

There will be an emphasis on the “hundreds of thousands” of jobs that industry executives told reporters defense companies large and small would have to terminate if more Defense cuts are enacted.

Additional Pentagon spending cuts could increase the nation’s already high unemployment rate by “one percentage point,” Albaugh said.

While many Americans think about corporate giants like Lockheed Martin, Boeing and Raytheon when the defense sector is mentioned, the lobbying effort will make the case that many medium-sized and smaller supplier firms also will be affected by deeper Pentagon cuts.

“These are Main Street USA companies,” Blakey said, previewing the kind of rhetoric that will be a part of AIA’s pitch.

The lobbying effort also will warn decision-makers and citizens what would happen to the industrial base if the military’s annual budget is cut by nearly $1 trillion over a decade, Blakey and defense executives said.

Industry officials are particularly concerned about retaining their ability to design new combat platforms like sophisticated fighter aircraft.

For instance, Albaugh said, there might be multiple manufacturers building planes for the U.S. military today, but few have the in-house engineering brainpower to design a new combat aircraft from scratch.

Dawne Hickton, president and CEO of RTI International Metals, compared companies’ design teams to a light switch, saying once they are “turned off” it can take years to turn them back on.

The White House and most lawmakers say the August debt deal will trigger $350 billion in defense budget cuts over a decade. Blakey told reporters that actual reduction, when coupled with past cuts, will fall between $460 billion and $480 billion through 2023.

“Our position is, no more,” Blakey said, echoing the hard line many pro-defense Republican lawmakers have taken in recent weeks. Kyl last week went so far as to threaten walking away from the special panel if additional defense cuts are even considered.

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If the supercommittee fails, a provision in the August debt deal would be enacted that calls for $600 billion in additional national security spending cuts over a decade.

The military would be asked to absorb half of that cut, or $300 billion, House Armed Services Committee Chairman Buck McKeon (R-Calif.) said Monday.

Blakey said she does not worry the defense community’s tough stance — as opposed to being open to a lesser amount of military cuts from the super-panel to avoid the automatic trigger cuts — will thrust the process toward the very scenario it collectively warns would “hollow out” America’s fighting force.

Citing conversations with supercommittee members, Blakey said the special panel is determined to reach a deal and avoid the enactment of the trigger cuts.

While executives are fretting and readying their counter punch, some defense analysts and industry insiders counter that the heartburn is a bit overdone.

Republicans appear poised to take a larger share of the House next year and likely regain control of the Senate, Lexington Institute COO and industry consultant Loren Thompson said Tuesday during a forum on Capitol Hill.

And with polls showing the White House is very much up for grabs as well, Republicans could be at the helm of all three come January 2013, Thompson said. And research has shown Defense spending is strongest when the GOP controls the House and White House, he noted.

Under Thompson’s forecast, a GOP-controlled Congress would quickly “repeal” any legislation requiring big Pentagon budget reductions.