Defense cuts bode ill for Nevada

Another study spells economic doom for Nevada if automatic defense cuts take hold to reduce the nation’s debt, and the Pentagon continues its drawdown on military spending and funding.

This most recent analysis, by the Southwest Defense Alliance, shows 17,000 jobs would be lost by 2017 in Nevada and output from defense installations and contractors would decrease by $900 million, a reduction of 0.8 percent of the state’s economy.

The 59-page report was prepared by a Sacramento, Calif.-based consulting firm, Andrew Chang and Company, for the alliance, a nonprofit, nonpartisan watchdog organization for preserving and enhancing defense missions in the Southwest states of Nevada, California, Arizona, New Mexico, Texas and Utah.

SEQUESTRATION

Ashley Hall, past chairman of the alliance and a retired Army brigadier general who is Nevada’s Army Reserve ambassador, sent copies of the report last week to Gov. Brian Sandoval and local elected officials in Clark County and rural counties in Southern Nevada to alert them about the automatic cuts, known as sequestration.

The across-the-board cuts will take effect in January if Congress and the Obama administration don’t agree on a pact to reduce the $16 trillion national debt. They would be in addition to already targeted cutbacks in defense programs.

"It would be a major impact if it goes through. I just want to make sure that the community knows what the sequestration concern is going to be and that it will impact Southwest states from Texas to California," Hall said Friday.

The report mirrors a nationwide study released earlier this year by a conservative think tank, the Center for Security Policy, that found Nevada’s military installations and defense contractors combined stand to lose hundreds of millions of dollars in funding and revenue, and 8,500 jobs if sequestration takes hold.

Under sequestration the deficit-reduction burden would be split between national security and non-security programs. That means the Department of Defense would be forced to lop an additional $492 billion from its expense accounts nationwide during the next 10 years.

The center’s report shows Clark County’s annual revenue alone would fall by $28.5 million annually under 9 percent cuts to defense programs from 2013 to 2021, or by $57.1 million per year under an 18 percent sequestration reduction.

With the specter of automatic budget cuts looming, production and delivery of F-35 Joint Strike Fighter jets to Nellis Air Force Base could be in jeopardy as well as government funding for the Aviation Nation air show at the base, the largest free public event in Nevada.

The study released in late November by Southwest Defense Alliance and the Southern California Leadership Council found that California would be hardest hit with $7 billion in mandated defense cuts plus $4 billion potential cuts under sequestration. That translates to 336,00 defense-related job losses in California through 2017 and $21 billion in economic output reductions.

In Nevada, the alliance’s study focused on impacts from cutbacks at four defense facilities: Nellis Air Force Base, Creech Air Force Base, Naval Air Station Fallon, and the Nevada National Security Site, formerly known as the Nevada Test Site, operated by National Nuclear Security Administration, a branch of the Department of Energy.

Among the study’s key findings were that after four years of defense spending increases of 13 percent per year through 2009, the ensuing eight years through 2017 show defense spending in Nevada would decrease at a rate of 17.3 percent, or $600 million total.

In addition, lost employment by 2017 would be 17,000 jobs, or an equivalent decrease in employment across the state of 1.1 percent from the drawdowns in defense spending and the potential effects of sequestration.

‘A WALK IN THE PARK’

Sequestration alone will account for 8,000 fewer jobs in Nevada through 2017, if it takes effect.

Moreover, output from national defense efforts in Nevada would decrease by $900 million in 2017, a reduction of the 0.8 percent of the state’s economy.

"Sequestration will make BRAC (Base Realignment and Closure) look like a walk in the park," according to Maj. Gen. Dennis Kenneally, executive director of the Southwest Defense Alliance.

"The president has directed that military personnel will not be cut so reductions will be in research and development, operations, training, maintenance – services that support boots on the ground. How effective can our men and women in the armed services be without this critical infrastructure?" Kenneally said in a news release.

Contact reporter Keith Rogers at krogers@reviewjournal.com or 702-383-0308.