TEXAS ECONOMY HURT BY OBAMA’S DEFENSE SEQUESTRATION CUTS

On May 9, President Obama will visit a high school and a technology company in Austin, Texas, reportedly to “draw attention to policies and programs that help spur the economy.” 

As background information on Obama’s other economic policies that affect the Texas economy, the Center for Security Policy is re-releasing the “Defense Breakdown Economic Impact Reports” for Texas detailing the harmful effects of sequestration defense budget cuts on Texas businesses and jobs. President Obama’s initiative for defense budget sequestration cuts originated in the White House.

The Defense Department has announced cuts across the country including lay-offs of temporary and contract workers, cuts in training, furloughs, reductions in force structure, longer deployments, maintenance delays, and contract cancellations.  Texas is one of the hardest-hit states:

• According to USA Today, Texas – with Fort Hood and Fort Bliss – may have a “$2.4 billion economic loss from the Army’s budget cuts” with furloughs for up to 30,000 Army civilian employees and pay losses of $180 million.
•  The Corpus Christi Army Depot in Texas could face $799 million in cuts.
•  Air Force cuts in Texas could reduce pay by $127 million.
•  Texas defense prime contractors earned over $35.97 billion in 2011 protecting America, but now they face approximately 18% revenue cuts, including 9% in sequestration cuts, starting in 2013.   Texas defense contractor revenue losses could be greater than $6.48 billion each year.
•  Several studies estimate that Texas could lose 98,979 defense related jobs, with $5.44 billion in lost earnings and a $7.92 billion decrease in the Gross State Product (GSP).

The “Defense Breakdown” reports detail baseline revenues and estimated local economic impacts from the defense budget cuts, using 2011 baseline contract data.  The Center will be releasing updated reports, with 2012 contract data, in early June.

The “Defense Breakdown” reports include 2011 defense contracts for each congressional district and bordering zip codes in Texas, with complete contract amount and contractor contact information, at www.forthecommondefense.org/districts .

Defense businesses face $500 billion in sequestration defense cuts – in addition to a separate earlier $487 billion of defense budget cuts already taken, starting in 2013.  In total, defense budget cuts are estimated to total 18% over nine years.

The reports are a project of the Center for Security Policy for the Coalition for the Common Defense, intended to educate and engage the American public on the importance of maintaining a strong national defense.  The reports are being used in dozens of communities across America by media, planners and elected officials, and are freely available at www.forthecommondefense.org/reports.

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