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Possible Military Action Raises Concern Over Cuts

The possibility of U.S. military action in Syria has spurred concern among local defense industry executives that sequestration — the term for across-the-board cuts to the federal budget, including the Pentagon budget — threatens to inhibit the military’s ability to respond to this and future international crises.

It could also negatively impact defense maintenance contractors in San Diego, where private businesses keep ships in fighting shape in the absence of a Navy shipyard.

Derry Pence, president of the Port of San Diego Ship Repair Association, has heard estimates that under sequestration, the Navy may cut back on ship maintenance by 50 percent or more. And that has him concerned not so much about Syria — “The Syrian issue can probably be met,” he said — but rather the next crisis.

“There is talk of reducing the number of [aircraft] carriers, air wings, boots on the ground — Army and Marine Corps,” he said. “We have already reduced the carrier presence in the Indian Ocean. The Syrian issue raises the specter of our ability to respond and to put ordnance on target. … If the need to deploy ships later in [fiscal] 2014 becomes a reality, will there be ships to answer the call?”

Chief of Naval Operations Adm. Jonathan Greenert, speaking last week during an all-hands meeting at Naval Air Station North Island, said he expects sequestration to affect the fiscal 2014 budget. How many tens of billions of dollars may be cut from the Pentagon budget is not yet available. Congress has not yet passed a spending plan for fiscal 2014, which begins Oct. 1.

Meanwhile, of local concern is the amount of defense dollars flowing into San Diego’s economy. The San Diego Military Advisory Council estimated that the Pentagon spent $20.7 billion in San Diego County during 2012, and predicted that amount would stay flat in 2013. The 2012 estimate comprises $9.7 billion in procurement and $10.8 billion in salaries for uniformed and civilian employees, as well as retirement benefits.

The civic group is expected to update those figures this month.

Budget Debate Not Letting Up

Pence thinks that perhaps the situation in Syria — where allegations that the Assad regime attacked civilians with chemical weapons have prompted the U.S. to consider targeted military action — will spur lawmakers to reconsider Department of Defense funding for fiscal 2014.

Along those lines, retired Navy Adm. Ken Slaght, a defense industry executive and a leader in the local National Defense Industrial Association chapter, sees defense budget wrangling continuing regardless of how the U.S. responds in Syria, which he projects “will be fairly limited and shouldn’t be enough to break budgets.”

And while he doesn’t see any signs of the tug-of-war between military spending versus paying down the deficit letting up in 2014, nor does he see any indications that sequestration is crushing the military.

“There were a lot of people crying wolf over sequestration,” said Slaght, whose last Navy duty was leading the Space and Naval Warfare Systems Command in San Diego. “And while there has been some serious belt-tightening, we seemed to have managed not to fall off the cliff.”

One of Many Security Issues

Congressional negotiators fell back on sequestration — a 10-year plan to cut most accounts of the federal budget, including Pentagon spending — as a strategy of last resort after Republicans and Democrats could not agree on a program to reduce the federal deficit in 2011.

“I think that the greater issue is whether the members of Congress want to continue to use sequestration as an alternative to working on a balanced budget,” said Eric Basu, CEO of San Diego-based defense contractor Sentek Global Inc. “I think that Syria is one of many national security issues that sequestration limits our ability to respond to.”

Local defense industry executives and Pentagon observers, however, said it will take more than a single crisis to quiet the debate over federal spending and the growing federal deficit.

“I don’t think one action [in Syria] currently described as limited is going to change the current climate on budgeting in Washington, D.C.,” said Tony Nufer, a San Diego-based executive with Vector Planning and Services Inc., which has 60 employees here.

And Nufer believes that if the U.S. were to engage Syria to a further degree than announced, Congress would give the military the resources it needs.

Meanwhile, the Syrian situation has lawmakers like U.S. Rep. Buck McKeon, R-Palmdale, who is chairman of the House Armed Services Committee, growing impatient.

“We cannot keep asking the military to perform mission after mission with sequestration and military cuts hanging over their heads,” he said.


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