Defense cuts would hurt some states more than others
October 25th, 2011
04:31 PM ET

Defense cuts would hurt some states more than others

By CNN National Security Producer Jennifer Rizzo

The ripple effects of uniform cuts across the Defense Department budget wouldn't shake out equally across the country, according to a major defense industry trade association.

California, Virginia, and Texas would be hit with the brunt of job losses if hundreds of billions of dollars were axed from the Pentagon, according to a new study commissioned by the Aerospace Industries Association.

Out of a projected 1 million in job losses nationwide, California would take a hit of 125,000, Virginia 122,000, and Texas 91,000. Ten states in total would account for almost 60% of the job and income losses.

"The multiplied impact of aerospace and defense workers losing their job is very simple: purchase of consumer goods goes down overnight, homes become unaffordable and the housing crisis is compounded, and so forth," said Stephen Fuller, who conducted the analysis. He is the director of the Center for Regional Analysis at George Mason University and Economic Modeling Specialists Inc .

"The 10-year defense budget cut will be felt in terms of layoffs starting in 2012, escalate and conclude by 2014," he added.

The Defense Department is already required to cut $400 billion from its budget over 10 years as part of an agreement that allowed President Obama to raise the debt ceiling. The same deal created a congressional "super committee" tasked with finding another $1.5 trillion in government savings over the next decade.

If the commission cannot come to agreement on where the cuts should come from by the end of November, another $600 billion would automatically be axed over 10 years from the defense budget.

The analysis was based on a projected reduction of $45 billion a year from the Pentagon's military modernization accounts, which the study says the aerospace and defense industry derives its revenues from, and assumed job losses would be proportional to the number of aerospace and defense workers in each state.

Projected Job Losses By State: Top Ten
California 125,800
Virginia 122,800
Texas 91,600
Florida 39,200
Massachusetts 38,200
Maryland 36,200
Pennsylvania 36,200
Connecticut 34,200
Arizona 33,200
Missouri 31,200

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Filed under: Budget • Defense Spending
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