This week the defense subcommittee of the Senate Appropriations Committee cut $26 billion from the Obama Administration’s fiscal 2012 budget request. The move is intended to align future Pentagon spending with the requirements of the recently enacted Budget Control Act. However, the cuts the subcommittee proposes to implement would destroy at least 200,000 jobs, and probably more at a time when the government is contemplating going deeper into debt to fund the president’s jobs bill.
Consider the $13.3 billion the appropriators propose to delete from military investment accounts — $9 billion for procurement and $4.3 billion for R&D. Let’s assume that every $200,000 in investment spending creates one direct job, either in the government or the private sector. At that rate, $13.3 billion in cuts would destroy 66,500 jobs. But that’s just the beginning, because economic models indicate that for every direct job created, two indirect jobs are also created in retail, construction, education and other activities made possible by the spending of defense workers. So the total hit to the economy from the proposed cuts is actually 66,500 times three, or 199,500 jobs.
Note that I have not included in this calculation job losses resulting from the $12.6 billion in other proposed cuts to the defense request, such as the $8.2 billion reduction in operations and maintenance. The latter cuts by themselves undoubtedly will destroy thousands of additional jobs.
These calculations illustrate that defense cuts are incompatible with the stated intention of both political parties to create jobs. If one congressional committee is considering spending billions of dollars on a jobs bill while another committee is cutting billions of dollars from defense that also would sustain jobs, where is the net gain to the economy? Does Washington really believe that building a new bridge in Kentucky creates jobs, but a defense plant or military base there does not?