Transcript Defense Industrial Base Key Issue Deck

Assuring the Viability of the U.S.
Aerospace and Defense Industrial Base
Steve Howell
Director of Public Policy
AIAA
Assuring the Viability of the US Aerospace and Defense
Industrial Base
• Background
 US Aerospace A&D industrial base is critical to our
economy, national security, infrastructure and future
workforce
– Supports 1 million jobs directly, and another 2.5 million jobs
downstream.
– Contributes 2.23% of GDP
– Small businesses generate almost half of private sector jobs,
64% of net new private sector jobs, 43% of high tech
employment and 33% of exports*
– Highly skilled, highly paid workforce
– Possesses unique capabilities and expertise
*AIA Second to None, 2012
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Assuring the Viability of the US Aerospace and Defense
Industrial Base
 Budget Control Act (BCA) of 2011:
– Sequestration mandates~10% cuts to all USG agencies
– Additional cuts over next 10 years
– Result in reduction of nation’s GDP by $215B, decrease
workforce personal earnings by $109.4B and cost 2.14M
jobs (1.5% increase in unemployment)*
 FY2014 Budget Resolution (Bipartisan Budget Act) and
the FY2014 Continuing Resolution (Omnibus
Appropriations Act)
– Provides some relief from sequestration for FY2014&15
– Does not affect cuts projected for FY2016-22.
*AIA Second to None, 2012
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Assuring the Viability of the US Aerospace and Defense
Industrial Base
 BCA 10-year impact
– DOD $800 billion
– Non-DOD $700 billion – including $200 billion in
mandatory programs (mainly from Medicare)
BCA Total Spending
Reductions (DOD and
Non-DOD – in millions of
nominal $s*
Report for AIA by Stephen S. Fuller,
Ph.D., George mason University, July
17, 2012
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Assuring the Viability of the US Aerospace and Defense
Industrial Base
• Recommendations
 Carefully consider the impact of budget cuts on continued
viability of A&D industrial base and the ripple effects that has
on national and economic security.
 Eliminate automatic “across-the-board” defense budget
reductions.
 Reform federal acquisitions and procurement to allow for
multi-year appropriations for complex systems.
 Meet constitutional budget obligations which will provide
assurances of continuity and sustainability of key programs
and budgets.
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