THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

‘Doomsday’ defense cuts directly affect panel members

Large military contractors are in their states

PERILOUS POSITION Senator John F. Kerry of Massachusetts represents a state that was fifth in the nation with $8.37 billion in defense contracts this year. PERILOUS POSITION
Senator John F. Kerry of Massachusetts represents a state that was fifth in the nation with $8.37 billion in defense contracts this year.
By Donna Cassata
Associated Press / August 15, 2011

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WASHINGTON - For the dozen lawmakers tasked with producing a deficit-cutting plan, the threatened “doomsday’’ defense cuts hit close to home.

The six Republicans and six Democrats represent states where the biggest military contractors - Lockheed Martin, General Dynamics Corp., Raytheon Co. and Boeing Co. - build missiles, aircraft, jet fighters, and tanks while employing tens of thousands of workers.

The potential for $500 billion more in defense cuts could force the Pentagon to cancel or scale back multibillion-dollar weapons programs. That could translate into significant layoffs in a fragile economy, generate millions less in tax revenues for local governments, and upend lucrative company contracts with foreign nations.

The cuts could hammer Everett, Wash., where some of the 30,000 Boeing employees are working on airborne refueling tankers for the Air Force, or Amarillo, Texas, where 1,100 Bell Helicopter Textron workers assemble the fuselage, wings, engines, and transmissions for the V-22 Osprey tilt-rotor aircraft.

Billions in defense cuts would be a blow to the hundreds working on upgrades to the Abrams tank for General Dynamics in Lima, Ohio, and to the employees of BAE Systems in Pennsylvania.

Senator John F. Kerry of Massachusetts, one of the Democratic members of the deficit-reduction committee, represents a state that was fifth in the nation with $8.37 billion in defense contracts this year, behind Virginia, California, Texas, and Connecticut, according to data on the federal government’s website USAspending.gov.

In Tewksbury and Andover, deep defense cuts could have serious ramifications for thousands of Raytheon employees working on the Patriot, the air and missile defense system. It was heralded for its effectiveness during the 1991 Persian Gulf War and is now sold to close to a dozen nations, including South Korea, Taiwan, and the United Arab Emirates.

Whatever decisions Kerry and the committee make will affect Raytheon, which was fourth in defense contracts this year at $7.3 billion, behind Lockheed Martin, Boeing, and General Dynamics. Raytheon also has operations in Arizona, home to another committee member, Republican Senator Jon Kyl.

“While some will argue there is peril in serving on this committee, we believe there is far greater peril in leaving these issues unaddressed,’’ Kerry said in a joint statement with fellow Democratic senators Patty Murray of Washington and Max Baucus of Montana, after they were selected by Senate majority leader Harry Reid of Nevada.

For committee members, the threat of Pentagon cuts is an incentive to come up with $1.5 trillion in savings over a decade. Failure would have brutal implications for hundreds of thousands workers back home.

“I think we all have very good reasons to try to prevent’’ the automatic cuts, Senator Pat Toomey, Republican of Pennsylvania, told reporters last week when pressed about the impact on Pennsylvania’s defense industry. “That is not the optimal outcome here, the much better outcome would be a successful product from this committee.’’

The panel has until Thanksgiving to come up with recommendations. If the lawmakers deadlock or if Congress rejects their proposal, $1.2 trillion in automatic, across-the-board cuts kick in. Up to $500 billion would hit the Pentagon.

Those cuts, starting in 2013, would be in addition to the 10-year, $350 billion reduction already dictated by the debt-limit bill approved by Congress and signed into law by President Obama this month.

Not surprisingly, Defense Secretary Leon Panetta has described the automatic cuts as the “doomsday mechanism.’’ He has warned that the prospect of nearly $1 trillion in reductions over a decade would seriously undermine the military’s ability to protect the United States.

For the Pentagon, “we’re talking about cuts of such magnitude that everything is reduced to some degree,’’ said Loren Thompson, a defense analyst at the Lexington Institute, a think tank. “At that rate, you’re eliminating the next generation of weapons.’’

In February, Murray celebrated when the Air Force awarded one of the biggest defense contracts ever, a $35 billion deal to build nearly 200 air refueling tankers, to Boeing, a mainstay in her home state. Boeing was fourth on the list of donors to Murray from 2007-2012, with its political action committee, employees, and family members contributing $102,610.

Michigan is home to two committee members, Republican Representatives Dave Camp and Fred Upton, and to General Dynamics’ work on the Abrams tank. The state is struggling with a 10.5 percent unemployment rate, which is above the national average.

Already facing the prospect of $350 billion in defense cuts over 10 years, the Pentagon could look to scale back some projects, such as the F-35 Joint Strike Fighter.

Lockheed Martin, in conjunction with Northrop Grumman and BAE Systems, is building 2,400 of the next generation fighter jet for the Air Force, Navy, and Marine Corps, as well as working with eight foreign countries. But the cost of the program has jumped from $233 billion to $385 billion.