When the Republicans agreed to cut defense 50% of the budget super committee failed they walked into a trap – that’s what the Democrats wanted for years. For Fort Wayne, the risks are extraordinary with our concentration of defense electronics companies.
Will defense budget cuts collapse economy in Northeast Indiana?
Since 9/11, defense spending has boomed in our area. Federal defense spending and incredible job expansion at the Fort Wayne General Motors Assembly Plant have offset other recessionary job losses. They provided the core for health care, education and other service sector growth.
The federal government has obviously been digging our deficit spending hole for many years, but why this immediate crisis?
Federal debt limit debate: No member of Congress likes to raise the debt limit. To compare it to your personal credit card, this would be like the company allowing you to spend beyond your limit, but when it was time to pay you refused to do so. A debt limit increase is to cover what is already obligated by spending.
Last year’s final appropriations “deal” passed by voice vote, so those who vote against debt limits are rather hypocritical when refusing to pay for what they voted to spend. Neither side liked the agreement, but since Democrats control the presidency and the Senate, and the Republicans the House, there are no good options. Issuing press releases doesn’t change past election results.
Budget super committee: This nightmare of a creature was created to give “cover” for those who responsibly voted for the debt limit. However, Republicans should have known that Democrats would not slow down “mandatory” spending and thus “trigger” massive defense budget cuts. This has always been the liberal agenda.
Fort Wayne region’s defense spending: Basic military salaries, core equipment in each service, major bases and replacement parts will survive if this budget is implemented and Republicans don’t support more spending. In our area we do some replacement parts (e.g., BAE is the best example). However, most of our defense electronics are either developmental or are systems that required earmarking such as ITT’s SINCGARS radios and sonobuoys.
If any of our major companies shut down in this region, getting them to return would be very hard. Cuts will also impact our air base.
Controlling the budget cannot be done without controlling mandatory spending: Here is the ugly truth — federal revenue in fiscal 2011 was $2.3 trillion. Mandatory spending plus mandatory interest totaled $2.25 trillion. Furthermore, mandatory spending is going to rise rapidly unless changes are made now. Discretionary spending — everything Congress actually appropriates ($1.35 trillion) — is entirely debt. Defense, education, national parks, highways and all flexible spending is 100 percent debt. Any member who votes for a single bill is adding to the debt limit requirement.
For our area to survive, we need legislators who realize this will be a long battle and will require major changes in mandatory programs. You can’t do it overnight. Responsible governing also requires that they actually study the numbers and not just say what people want to hear.