San Diego in Crosshairs of Automatic Defense Cuts

San Diego's cut of the Pentagon pie could be reduced by $3.2 billion a year starting in January

By Gene Cubbison
|  Tuesday, Jul 17, 2012  |  Updated 9:39 PM PDT
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Leaders of San Diego's military affairs community are now sounding sharp warnings about a looming threat to the future of defense spending and manufacturing in this region.

Leaders of San Diego's military affairs community are now sounding sharp warnings about a looming threat to the future of defense spending and manufacturing in this region.

Leaders of San Diego's military affairs community are now sounding sharp warnings about a looming threat to the future of defense spending and manufacturing in this region.

Mayor Jerry Sanders was in Washington Tuesday to add urgency to the message.

For years, San Diego has enjoyed a kind of 'favored nation' status in the normal course of Pentagon planning and spending.

But there’s no such wiggle room under the automatic 10 percent, across-the-board budget reductions spelled out in the "sequestration" process that Congress has created -- and now has second thoughts about.

“We need to see this issue solved and solved immediately, because once the confidence stops, our economy's going to go right back to where we were,” Sanders said Tuesday at a Washington D.C. news conference sponsored by an aerospace industry trade group.

During that session, a leading economist unveiled a study that forecasts a potential nationwide hit of $215 billion in gross domestic product, and a loss of 2 million jobs next year -- pushing the unemployment rate up by one-and-a-half points.

Beyond the economic fallout, said U.S. Sen. Kelly Ayotte, (R-NH), who serves on the readiness and management support subcommittee of the Senate Armed Services Committee, "This decimates the finest military in the world and undermines the safety of the American people."

Studies by San Diego's Military Advisory Council cite a $32 billion dollar annual economic impact for defense-related spending in this region.

Simple math would suggest that San Diego's cut of the Pentagon pie could be reduced by $3.2 billion a year starting in January.

One out of every four jobs in this region has military connections, and ten percent of them – 3,1000 -- could be out the door, along with all sorts of defense-related research and development projects scaled back or put on hold.

The nation's largest concentration of military personnel is based here, along with a wide range of defense industry manufacturers.

Sanders noted that San Diego's "innovation" sector is the recipient of numerous Defense Dept. grants for research and development, while Homeland Security funding helps support border commerce that in turn benefits the area's tourism sector.

"All of those are critical to San Diego's economy,” Sanders said, “whether it's clean tech, high-tech, biotech or life sciences, or applied sciences, wireless ... and when those grants stop coming, then that research stops and the job production stops."

Local military affairs leaders are concerned that the situation leaves San Diego defense manufacturers unable to plan beyond year's end.

"I personally don't believe anything's going to get done before the election,” says Larry Blumberg, executive director of the San Diego Military Advisory Council. "General Dynamics, NASSCO, General Atomics, Northrup Grumman -- these companies are operating in the dark right now … the unknown is just overwhelming.”

Reports out of Washington Tuesday indicated that Congressional leaders are now talking about measures to set aside the automatic cuts for at least a year, and looking to reductions in the federal workforce and agency spending to offset the delayed savings that the automatic defense cuts would otherwise yield.
 

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