Financial Impact of Defense Cutbacks in Virginia

With the failure of the congressional super committee to find more than one trillion dollars in budget cuts, deep spending reductions are slated to fall on the Defense budget, which could disproportionately impact Virginia.

More than half a trillion dollars is now slated to get cut from the Pentagon’s budget – that’s on top of a previous agreement to trim its budget by $450 billion dollars. Virginia Beach Republican Congressman Scott Riggell says that would be a terrible day for national security and the state of Virginia.

“That amount triggered from one day to the next, you know it just pivots. It goes from one level to the next in one day, the reduction. I think that would be, what I’d would refer to as I refer to as a violent course correction for the Department of Defense,” said Riggell.

Experts say the cuts are unlikely to fall on the tens of thousands of troops stationed in Virginia, but contractors who contribute a lot to the state’s economy could take a big hit. Northern Virginia Democratic Congressman Jim Moran says the budget cuts currently written into law would hit Virginia harder than any other region of the nation.

“We don’t build weapon systems but we do the things that make our military the smartest in the world with information technology, cyber security, battlefield simulation, all the research and development, most of it is anchored in Northern Virginia,” said Moran.

Cutting half a trillion dollars from the Pentagon’s budget isn’t something Virginia lawmakers want to see, even those Republicans who ran on trimming the federal debt. Critics say that’s hypocrisy, but many in the GOP, such as Chesapeake Congressman Randy Forbes, opposed the compromise measure that set up the super committee. He says automatic cuts to the Pentagon’s budget should never have been a part of the mix.

The president has threatened to veto any attempt to blunt the budget cuts. Virginia Democratic Senator Mark Warner agrees, even though he knows the cuts will be painful for Virginians. “But the notion that we would somehow remove the consequences of failing to start taking down our debt is just unacceptable,” said Warner.

Analysts think the budget cuts would fall hardest on Northern Virginia’s economy, but the south may face a different problem. Defense Secretary Leon Panetta recently announced he wants to move four ballistic missile ships to Europe to provide a shield against a potential nuclear attack.

Congressman Forbes, who is the Chairman of the House Armed Services Readiness Subcommittee, fears three of those could be sent from the naval base at Norfolk. “Those destroyers we didn’t give the Navy any additional money for assets, so at least three of those destroyers, very likely could come out of Virginia to be land based over there,” says Forbes.

The potential combination of moving those ships and slicing hundreds of billions of dollars from the Pentagon’s budget has the state’s lawmakers looking for alternatives but also, oddly enough, looking to partisan gridlock as a sign of hope. If the law isn’t changed the steep budget cuts will start hitting the state in 2013.

In the mean time Virginia’s lawmakers in Washington are working to unwind or redirect those cuts.

— Matt Laslo

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