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  • Defense Cuts Will Cost Us in the Long Run

    As its January 2 deadline draws near, sequestration and the roughly $500 billion it will cut from defense have received increasing attention. While proponents of these dramatic cuts argue it shows fiscal restraint and will save the country money, the sensitive nature of Department of Defense (DOD) contracting could mean programs will cost more to the taxpayer in the long run if the cuts do indeed take place.

    The Office of Management and Budget reported last week that major defense accounts will each face reductions of 9.4 percent under sequestration, but failed to provide specifics. A blind cut of this degree could cause serious problems for DOD managers charged with running their programs efficiently.

    Many of these programs are already underway. The managers of these will find it quite difficult to administer a 9.4 percent cut when they have already spent significant time creating plans under previous assumptions. Long-term acquisition, operation, and maintenance programs often rely on long-lead purchases, which take advantage of locked-in prices and economies of scale. Aside from breached contract fees, program managers will also have to reevaluate how much they can afford immediately versus long-term planning, which may cause cost growth in the future.

    The U.S. Navy fleet demonstrates the need for steady and predictable budgeting. Aircraft carriers, for example, take roughly five years to construct. Sequestration will potentially lengthen this build rate by a year, causing uncertainty for the shipbuilders and the companies that supply them.

    The dilemma facing the suppliers particularly threatens national security forces for two reasons. First, many suppliers are extremely specialized, and in some cases are the sole provider of a product or service that goes into building a warship. Second, supplier companies are often small businesses. If their only customer is the U.S. Navy, and business is uncertain, they may have to exit the market. These are specialized capabilities and processes that sustain America’s naval superiority in the world.

    If the armed services lose such capabilities, what are the costs to find and secure contracts with a replacement? Will the loss of one supplier stall other components of their development? For how long will the military have to go without a certain capability necessary to executing its missions? These are all significant concerns facing acquisition officials, who currently do not know how the across-the-board cuts will be administered.

    The Obama Administration, through its congressionally mandated report and throughout this debate, has oversimplified the catastrophic effects sequestration will have on national security. Congress needs to fulfill its constitutional responsibility to provide for the common defense by responsibly funding security forces, rather than using it as a political tool as the President has done.

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    5 Responses to Defense Cuts Will Cost Us in the Long Run

    1. Brian says:

      Let us remember it was a bipartisan bill that forced the sequestration to occur. And let us also remember that it was a bipartisan committee that couldn't find any budget cuts. So now, Heritage thinks the only cuts that should NOT to happen are defense cuts??? Come on, get real. I know that the Heritage and Defense are in bed together, but this is ridiculous.

      • oldephardt says:

        Defense has always been vital but i this world of extremely troubling events popping up here and there, if America isn't to be the one bastion of freedom, then who will it be. The observable fact that we spend over three times as much on entitlements as we spend on defense clearly illustrates wrongful priorities and if all spending was tied to our GNP, pehaps some rational control might exist. To blindly gut defense while allowing the gross inefficiencies in Washington to remain is not simpy wrong, it is a most grevious error and will come to bite us.

    2. Rico Katt says:

      These sequestration cuts will require the government to terminate some contracts for the government's convenience; It will require termination payments to contractors that will cut into actual savings and will provide the country ZERO added defense value.

    3. Bobbie says:

      whatever happened to fiduciary obligation from the government with the peoples' money? Defense is all the tax payers should be funding. Where does it say tax payers have a moral responsibility to any other persons irresponsibilities? Like in housing, provisions and personal culture?

      Bush was 60 billion in debt? Is that right? And Obama is 16 trillion and counting? Is that right? who's criminal?

    4. Jeanne Stotler says:

      “A Nation is only as strong as it’s Military” If these cuts go through it will down spiral our economy, Virginia wil be greatly hurt, Pentegon, Ft. Myer, Ft. Belvoir, Quantico, Ft. A.P. Hill,Ft Monroe, Norfolk Naval, Jersey and Maryland ill also feel it, Obama has destroyed our honored Space program, now putting Military on a low not seen since PRE WWII. Stop him, vote and get all your friends about to put him out of office.

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