Close to 7,000 Inland jobs could hang in the balance as the government “supercommittee” works to avert deep, automatic cuts to the nation’s defense industry and operations.

BEN GOAD
STAFF WRITER
bgoad@pe.com

Published: 31 October 2011 05:17 PM

WASHINGTON — Close to 7,000 Inland jobs could hang in the balance as the House-Senate “supercommittee” works against time to avert deep, automatic cuts to the nation’s defense industry and operations.

The bipartisan panel, created earlier this year during the debt ceiling crisis that threatened to lead to national default, has until Thanksgiving to recommend at least $1.2 trillion in federal spending cuts over the next decade. Congress then has until just before Christmas to approve or reject the proposal. Failure to pass a deficit reduction package would trigger $1.2 trillion in automatic cuts, much of which would come out of defense and national security accounts that have already seen recent reductions.

The cumulative defense losses would total $882 billion over the next decade, Congressional Budget Office director Doug Elmendorf told the committee during a hearing last week. As he spoke, lawmakers and experts at another hearing on the other side of Capitol Hill warned that the automatic cuts could take a devastating toll on the sputtering job market.

“Wherever we have military, wherever we have civilian military (support) and wherever we have defense contractors, we’re going to suffer job losses,” said House Armed Services Committee chairman Buck McKeon, a Republican who represents part of San Bernardino County’s High Desert. “We see that California is going to be hit very hard by these cuts — they’ll be all across the spectrum.”

Indeed, California would suffer more than any other state if the committee fails to accomplish its cost-cutting goals, said Dr. Stephen Fuller, director of the Center for Regional Analysis at George Mason University. Fuller said the state could lose nearly 126,000 jobs as a result of the automatic cuts; the country would lose more than 1 million in total.

The threatened jobs include a mix of people paid directly by the Defense Department, and other sectors that would suffer indirectly from a large cut in military spending, Fuller told the Armed Services Committee.

Defense contractors’ decreased payrolls and purchasing power “will spread the economic pain of these cutbacks to a far larger population and business base than generally appreciated,” Fuller testified.

“Each $1 decrease in DOD equipment purchases will generate an additional $2.64 in lost sales elsewhere, with 71 percent of these losses resulting from decreased spending by workers having lost their jobs,” he said.

INLAND CUTS SEEN

Inland Southern California would not be spared, according to Fuller’s estimates, which assume the cuts would be spread evenly among states and counties based on their current percent of Defense Department spending. The cuts would slash more than $400 million from payroll earnings.

To read entire story, click here.