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Committee Leaders Diverge in Response to Impact of Defense Cuts

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  • October 26, 2011
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During a hearing Wednesday on the potential economic impact of additional cuts to the Pentagon’s budget, House Armed Services Committee (HASC) Republicans and Democrats differed over whether the congressional deficit reduction committee should rely on taxes to shield DOD from further cuts.

The panel was responding to an analysis released Tuesday by one of its witnesses, Stephen Fuller, director of the Center for Regional Analysis at George Mason University, which concluded that the economy would lose more than 1 million jobs nationwide if automatic spending cuts kick in and force DOD to find $1 trillion in savings over the next decade.

“As a fiscal conservative, I tend to oppose increasing government spending for the purpose of job creation,” HASC Chairman Howard “Buck” McKeon (R-Calif.) said in his opening statement. ”But I think we must understand that the defense industry is unique in that it relies entirely on federal government dollars. We don’t spend money on defense to create jobs. But defense cuts are certainly a path to job loss, especially among our high-skilled workforces. There is no private sector alternative to compensate for the government’s investment.”

But, while McKeon has called for the supercommittee to leave tax increases off the table, Adam Smith (D-Wash.), the committee’s ranking member, took the opposing viewpoint, reported the Washington Post.

“If you are concerned about the size of the impacts of the defense cuts, then you have to be prepared to make sure that there’s enough money available to make sure that you don’t do that,” Smith said. “So I believe that balance needs to be struck.”

Fuller’s analysis is based on a worst-case scenario in which Congress fails to enact at least $1.2 trillion in government-wide spending reductions before the end of the year, triggering cuts of an equal amount split between defense and non-defense programs. Of the 1 million jobs he forecast the economy would lose, 350,000 would fall on defense workers, while the effects of induced spending would displace 650,000 workers in other sectors of the economy. Ten states would account for nearly 60 percent of the job losses.

To watch a webcast of the hearing or to read the testimony of Fuller and the other witnesses, visit the committee’s website.

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