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Pentagon Budget Cuts Could Affect 23 Santee Companies, Report Suggests

Pentagon budget cuts of $500 billion could hammer San Diego County, including local business.

Members of Congress and business lobbyists have been sounding alarms about sequestration—looming Pentagon budget cuts that could exceed $500 billion over 10 years.

They could begin in January if lawmakers don’t deal with the so-called “fiscal cliff,” including the fallout of the 2011 Budget Control Act.

But what does that mean for Santee?

Although military jobs and pay would not be affected, the cuts could trickle down to 23 local companies that did business with the Department of Defense last year to the tune of $17 million.

According to the Center for Defense Policy, which this week released updated data from several federal sources, these Santee companies did more than $100,000 worth of business with the Pentagon in 2011 (with the value of contracts noted):

  • A&D Gc Inc. ($8,835,810) on Woodside Avenue in the category of “Commercial and Institutional Building Construction.”
  • A&D- Dorado Joint Venture Up ($6,152,338) on Woodside Avenue in the category of “Commercial and Institutional Building Construction.”
  •  ($410,535) on Stevens Road for  “Urethane and other foam product manufacturing.”
  • Alt Tool & Machine Inc. ($329,947) on Woodside Avenue for “MachineShop.”
  • Poncianno Construction Inc. ($872,046) on N Magnolia Avenue for “Commercial and Institutional Building Construction.”

Pentagon cuts of 18 percent over 10 years are forecast under current plans.

An analysis in late August by Todd Harrison of the Center for Strategic and Budgetary Assessments (see attached PDF) said cuts would not affect funding already obligated in contracts, but would lead to “reduction in new contract awards, contract extensions, options, etc. … and likely force DoD to renegotiate contracts to buy in smaller quantities and cause unit costs to rise.”

Who would decide on the cuts?

The Congressional Budget Office says: “The [Obama] administration’s Office of Management and Budget has sole authority to determine whether a sequestration is required and, if so, the proportional allocations of any necessary cuts.”

Sequestration is the word used to describe automatic cuts mandated by the August 2011 Budget Control Act, which came after the national debt ceiling debate and failure of the congressional “super committee” to reach a deal on deficit reduction.

Nobody knows where the budget ax would swing—and even how hard San Diego County and its large defense industry and military presence would be hit.

But in mid-June, Rep. J. Randy Forbes of Virginia was quoted by U-T San Diego as telling a University of San Diego audience that “this is something that ought to be in every congressional debate, as we go into the November election.”

In the Shiley Theater forum also attended by fellow Republican Rep. Duncan D. Hunter of Alpine, Forbes also said: “I think it’s a fair thing to say, ‘Where do you stand on defense cuts, and what’s your proposal to stop them?’”

San Diego County boasted more than 3,000 businesses and companies with defense contracts in 2011, according to a breakdown of the county’s five congressional districts by the Center for Security Policy.

These included 55 in Poway, 28 in La Jolla, 23 in Santee, 19 in Encinitas, 19 in Coronado, 13 in La Mesa, 10 in Spring Valley, and six each in Ramona, Del Mar and Imperial Beach.

In early August, Frank Kendall, a Defense Department undersecretary, urged a San Diego Convention Center gathering “to keep reaching out to local leaders in Congress and letting them know the job cuts that could come to their districts as a result of sequestration,” according to the San Diego Daily Transcript.

“That seems to be getting their attention more than anything else right now,” Kendall was quoted as saying.

On Tuesday, the right-wing think tank Center for Security Policy posted congressional district reports to help estimate the potential local economic impacts of the cuts to the nation’s defense budget under sequestration. 

Reports citing 2011 data showing the effect of 18 percent “sequestration cuts” for all U.S. states and territories, counties and cities.

The center, whose projects have criticized as biased controve projected that California would loses at least 141,130 jobs under sequestration, including 15,341 civilian Defense Department jobs and 125,789 private-sector jobs.

Reps. Hunter and Forbes have said 30,000 San Diego County jobs could be lost.

For his part, Hunter is keeping attention focused on the issue with a Sept. 25 “interactive public conference” called San Diego and National Defense: Protecting Our Future.

“Take advantage of this opportunity for the San Diego community to come together and discuss tangible strategies on how to protect our local defense industry, assets and resources,” a promotion for the event says. “Topics will include Procurement and Acquisition, Base Closing and Sequestration, Education and Workforce, Housing, and Small Business.”

The event is set for 7:30-10:30 a.m. at Hojel Hall of the Americas Auditorium at UC San Diego.

Citing the Aerospace Industries Association, the Center for Security Policy said: “Four out of five likely voters in critical battleground states want our leaders in Washington … to find an alternative to ‘sequestration’ budget cuts before the November elections take place, according to a Harris Interactive online poll.”

In 2007, a writer for Watching the Watchers said a column in a forum established by the Center for Security “called on President Bush to declare himself ‘President for Life’ and remove all Arabs from the Middle East so he can ‘repopulate the country with Americans.’ ”

But figures used in the center’s sequestration report appear to be unbiased.

The center said contract figures for the sequestration report “derived from public data at the Federal Procurement Data System based on queries from governmentcontractswon.com, and combined with public ZIP code data linked to congressional districts.”

PwmCwzy September 14, 2012 at 12:19 AM
The sequestration was caused by the obstructionist Republican House members because they wouldn’t reach a deal on the debt ceiling. The debt ceiling is nothing more than authorizing payment for what has already been approved. Like paying your credit card payment for what you already purchased. Because the previous administration bought tax cuts for the wealthy on the U.S. credit card, while waging two wars on that same credit card, and authorized prescription drug coverage be charged also. Now the U.S. credit card debt with interest is more than the U.S. can afford, so they have to borrow more money to make their payments. If the U.S. was a family with that kind of problem, they would have to figure out how to bring in more money to pay the bills. Obviously they would have to cut discretionary spending, but they still don’t have enough to pay their monthly commitments and the credit card bill. A second job is needed for additional revenue. Since the U.S. also needs more revenue, but the Republican majority have signed Grover Norquist’s pledge, they are unable agree on how to fix the problem. So now they agree to give the problem more time and if they can’t figure it out they loose something they want to keep. Like the bank finally foreclosing on the family’s house, Santee‘s businesses will be the scape-goats, because of the Republican party's obstructionism. We need to remove/replace the Republican Congressmen in our area.
Margie Logue September 14, 2012 at 04:27 PM
The Ryan budget wants to give another tax cut to those making more than $200,000/year and cut out the inheritance tax and capital gains tax.. It doesn't want to cut back on defense. It vows to spend less...like $897 Billion less. I call on Duncan Hunter or a representative from his office to explain where this money is coming from and it's effect on San Diego County. Just a nice little breakdown of what will be cut. Education? Pell Grants?, VA benefits?, medical research grants to find cures for diseases like cancer?, Head Start?, Nutrition programs for mothers and infants?,Department of Justice?, EPA?, National Parks?, Cuts to the FAA?, Food and water safety?, Agriculture? Infrastructure? What? So someone who has a half billion dollars can inherit another half billion and pay no taxes on it. But your everyday Joe who works 40 plus hours a week has to turn over about a third of his pay to taxes. Congressman Ryan states "We will not duck the tough issues." but he refuses to say where the $897 Billion is coming from exactly. I hope Congressman Hunter can explain it in terms we understand.
alvinaruby December 19, 2012 at 06:27 AM
Does the fact that it's familiar help them on the field? http://www.designerwatchesideas.com/fashion/how-one-can-discover-custom-made-luggage-for-the-wholesale-in-addition-to-affordable-charges.html

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