The layoffs have begun. Defense contractors are bracing themselves for significant downsizing and assembly-line closures as Congress bickers over the federal deficit. If lawmakers fail to repeal the draconian sequestration law or reach consensus on the deficit, they will trigger the “doomsday switch” on Jan. 2, 2013, resulting in $600 billion in automatic Pentagon spending cuts and hundreds of thousands of jobs lost across the defense technology sector.
Defense and aerospace companies across the United States are putting employees and suppliers on notice for the coming canceled contracts and mass layoffs. Sequestration has effectively become a runaway train, with Congress unwilling or unable to stop it.
Technology firms must plan months, if not years, ahead. Waiting for the lame-duck session of Congress or the next session will be too late for folks spread across America’s high-tech defense landscape, from the assembly lines through to workshops and laboratories.
Deputy Secretary of Defense Ashton B. Carter recently criticized Congress broadly over defense sequestration and its potential to devastate industry. Pressure will continue to build on lawmakers as sequestration and the inevitable layoffs butt up against the election cycle.
Planning needs a rational basis - sequester was designed to be inherently irrational. It is flawed public policy. Fundamentally, the debate over cuts and additions to the 2013 budget is moot unless lawmakers determine a way forward on sequestration.
Mr. Carter said the Pentagon doesn’t want to cut funding for new advanced programs. He singled out cyberdefense, science and technology, and space and unmanned systems as mission-critical. Many in the defense-technology industry are discouraged by congressional mandates that restore funding to older, less capable weapons systems at the expense of needed new technology.
From a pure national security perspective, the gap between the U.S. military and our closest rivals will collapse with sequestration. The weapons systems now rolling off foreign assembly lines are roughly equivalent to the platforms being retired at home - a scenario expected to enhance the technology gapin favor of the United States. In most instances, we enjoy a lead in technology of one or, in many cases, two generations. This American technology advantage will evaporate with sequestration.
There is no sound association between the programs facing mandatory cuts and the strategic situation confronted by the U.S. Britain faced a similar dilemma in 1998-99 when its defense budget was gutted. The cuts affected national security so dramatically that they were undone three years later - but the effects are still felt today.
Sequestration will see the U.S. military shrink to the smallest ground force since 1940. A 230-ship Navy would be the smallest fleet since World War I, and the Air Force would have the fewest tactical fighters in its history. For example, the F-35 Joint Strike Fighter program will be stripped, if not canceled - heralding dramatic strategic consequences for key allies, including Britain, Australia and Canada. The B-1B bomber’s replacement will be terminated or delayed, as will the littoral combat ship and the ground-combat vehicle.
The chairman of TechAmerica’s defense committee, Vice Adm. Lou Crenshaw, summed it up, saying sequestration is analogous to a short circuit where current seeks the path of least resistance with predictable and disastrous consequences. He said Congress must take the path of responsibility, not least resistance, and fix sequestration - ideally by repealing it.
The cuts will be devastating, with grave consequences coupled with vicious and undiscerning implementation. If Congress does not act quickly, it likely will be a decade or more before any new weapons systems enter the U.S. arsenal. By then, it will be too late. The jobs will be gone, the intellectual capital sapped away, and the weapons-technology gap will have snapped closed.
Gregory P. Keeley is vice president for defense, intelligence and homeland security policy at TechAmerica.