By Kenric Ward
FREDERICKSBURG — Scary budget scenarios are flying over Virginia faster than F-15s over Afghanistan, but fiscal analysts say Chicken Little defenses are pointless, and off target.
“There is no doubt some communities will be hit by sequestration (cuts). But the Pentagon is making things worse for themselves,” said Veronique de Rugy, senior research fellow at the Mercatus Center at George Mason University.
“The military has had a year and a half to plan but continued to fight the fight for more spending. With the exception of 2014, defense outlays will be over $500 billion every year, not counting war spending,” de Rugy told Watchdog.org.
A state-by-state map by the Pew Center shows that defense-heavy Northern Virginia and Maryland stand to “lose” the most from a sequestration program that would cut an estimated $85 billion in overall federal spending. About half those automatic cuts would target defense.
To put $85 billion in perspective, de Rugy notes that Washington is spending $3.5 trillion annually, leaving a deficit of $845 billion for fiscal 2013.
The Congressional Budget Office shows that defense-related spending will continue to grow every year after 2013. (Note charts on Pages 25-26.)
Winslow Wheeler, an analyst for the Center for Defense Information, estimates that defense spending will revert to 2007 levels. Amid the sky-is-falling rhetoric from politicians and gullible media, Wheeler says a little belt-tightening can be curative.
“(The Pentagon’s) procurement and research and development show their distorted priorities. They have it exactly wrong. They need to get the junk out of the procurement budget,” he told the Washington Times.
An economist at the Stanford University-based Hoover Institution — no left-wing think tank — says provincial politicians must share the blame.
David Henderson noted the example of House Speaker John Boehner pushing for an alternate engine for the F-35 joint strike fighter over the objections of (then) Defense Secretary Robert Gates, who called it “a waste of nearly $3 billion.”
Yet Boehner continued to push because the engine’s manufacturer had about 1,000 employees working on the engine in a facility near his home base of Cincinnati at the time.
Only an effort by Rep. Tom Rooney, R-Fla., succeeded in halting the project.
Still, politicians of both parties — up to and including President Obama — continue to wave the bloody flag. The administration site projects that sequestration would furlough 90,000 civilian defense workers in Virginia and reduce gross pay by $648 million, the biggest hit among the 50 states.
U.S. Rep. Scott Rigell, R-Norfolk, traveling with Obama to Virginia’s naval bases on Tuesday, said he would support raising revenues via “tax reform” to avoid sequestration.
U.S. Rep. Randy Forbes, R-Chesapeake, wants to remove the Department of Defense from sequestration altogether.
“That would give lawmakers an opportunity to blunt the debilitating impact of the cuts on national defense,” Forbes said.
Obama appeared in the Navy town of Newport News to rouse resistance to sequestration’s mandatory cuts due to kick in Friday. Ramping up the rhetoric, the administration says the total reductions will total $1.2 trillion — a figure 14 times bigger than the CBO’s.
The Navy says it will scuttle maintenance work on 11 ships stationed in Hampton Roads, delay work on the USS Abraham Lincoln aircraft carrier and stall deployment of the USS Truman. Some 90,000 civilian furloughs have been threatened in the region.
Retired Army Lt. Col. Ralph Peters told the Washington Examiner the Navy’s actions were “ostentatious.”
Republican Gov. Bob McDonnell, joined this week with Democratic Maryland Gov. Martin O’Malley to warn that sequestration could send both states “into a recession.”
Susan Stimpson, chairman of the Stafford County Board of Supervisors and Republican candidate for lieutenant governor, told Watchdog: “Government has plenty of revenue and we need to cut spending, (but) sequestration is not the intelligent way to do it, and Republicans never should have put it on the table. But it’s what President Obama wanted, and congressional leaders agreed to.”
Though Stimpson favors making cuts in a more “targeted fashion,” she said the ‘sky-is-falling’ rhetoric is shameful.”
“Even with sequestration, the government is still spending more than it did last year, and out of a $3.6 trillion budget a cut of $44 billion is only about 1.2 percent. The administration’s apparent desire to mismanage the cuts to scare people into raising taxes is another divisive failure to lead,” Stimpson said.
De Rugy — whose primary research includes the U.S. economy, federal budget, homeland security — says the military-industrial complex is out of control.
“The money blasting out from Washington is notoriously — and predictably — misspent. Congress reliably fails to apply any kind of meaningful oversight over military spending, and it hasn’t even managed to pass a budget since 2009.
“Individual members of Congress make things worse by pushing for whatever weapons system or aircraft engine that can be produced in their district, regardless of whether the Pentagon wants it.”
Contrary to the doomsday scenarios garnering most of the headlines this week, deRugy and others say Northern Virginia contractors are positioning themselves for slightly downsized budgets.
“It’s not going to be an overall hit to the economy. You have high-skill labor, and resources can be shifted quickly,” she said.
“Most companies are diversifying their offerings to be competitive outside of federal contracts,” Robyn Burdett, a Re/Max realty vice president who serves on the Fairfax County Economic Advisory Commission, told the Washington Examiner last week.
And Tom Giovanetti, president of the Dallas-based Institute for Policy Innovation, reiterates that “defense spending will never fall below 2007 levels, and in fact will immediately begin increasing again, growing by 17 percent over the 10-year term of the sequester.”
Joe Grzeika, of Strategic Insight of Crystal City, told Watchdog that his defense-consulting company is keeping sequestration in perspective.
“I don’t think the world is going to end. I’m hoping that we (as an industry) can handle a $44 billion cut. If we lose a contract, we can rebound,” Grzeika said.
“The impact on economic growth will be small and short-lived,” de Rugy forecast, adding, “It is an incorrect assumption to say that whatever (federal defense dollars) are taken out, are just gone.
“Of course money will come out of defense –- that’s inevitable because we’re getting out of two wars. “But Defense Department money has been shifted into the commercial side before, and they’ll do it again.”
Contact Kenric Ward at kenric@watchdogvirginia.org or at (571) 319-9824. @Kenricward