Transcript Strategic Plan Trends and Observations

Preserve the Industrial Base
Carol A. Cash, Chair
Aeronautics Subcommittee
VP, Public Policy
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 3.5 million jobs
– 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
 Non-DOD impacts*
– NASA
» 8.2% cut to agency’s budget in 2013
» potential loss of 20,500 private sector jobs in 2013
» Significant impact to states with aerospace “clusters” (FL, MD,
AL, TX, CA, CO, VA, OH, etc)
– NOAA
» 8.2% cut to agency’s budget in 2013 – loss of more than $154
million
» Potential loss of 2,500 jobs in 2013
» Impact to replacement weather satellites
*Economic Impact of Sequestration on Civil Space
Programs, AIA Second to None, December 2012
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Assuring the Viability of the US Aerospace and Defense
Industrial Base
 Budget Control Act (BCA) of 2011:
– Congress has postponed major impacts until March
– Sequestration will mandate ~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)*
 Other budget decisions in March
– Continuing Resolution
– Debt Ceiling
*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 Industrial Base (especially
small businesses)
 Eliminate automatic “across-the-board” defense
budget reductions
 Provide assurances of continuity and sustainability of
key programs and budgets
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