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Assuring the Viability of the U.S. Aerospace and Defense Industrial Base

Assuring the Viability of the U.S. Aerospace and Defense Industrial Base. Steve Howell Director of Public Policy AIAA. Assuring the Viability of the US Aerospace and Defense Industrial Base. Background

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Assuring the Viability of the U.S. Aerospace and Defense Industrial Base

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  1. Assuring the Viability of the U.S. Aerospace and Defense Industrial Base Steve Howell Director of Public Policy AIAA

  2. Assuring the Viability of the US Aerospace and Defense Industrial Base • Background • US Aerospace A&D industrial base is critical to our economy, national security, infrastructure and future workforce • Supports 1 million jobs directly, and another 2.5 million jobs downstream. • Contributes 2.23% of GDP • Small businesses generate almost half of private sector jobs, 64% of net new private sector jobs, 43% of high tech employment and 33% of exports* • Highly skilled, highly paid workforce • Possesses unique capabilities and expertise *AIA Second to None, 2012

  3. Assuring the Viability of the US Aerospace and Defense Industrial Base • Budget Control Act (BCA) of 2011: • Sequestration mandates~10% cuts to all USG agencies • Additional cuts over next 10 years • Result in reduction of nation’s GDP by $215B, decrease workforce personal earnings by $109.4B and cost 2.14M jobs (1.5% increase in unemployment)* • FY2014 Budget Resolution (Bipartisan Budget Act) and the FY2014 Continuing Resolution (Omnibus Appropriations Act) • Provides some relief from sequestration for FY2014&15 • Does not affect cuts projected for FY2016-22. *AIA Second to None, 2012

  4. Assuring the Viability of the US Aerospace and Defense Industrial Base • BCA 10-year impact • DOD $800 billion • Non-DOD $700 billion – including $200 billion in mandatory programs (mainly from Medicare) BCA Total Spending Reductions (DOD and Non-DOD – in millions of nominal $s* Report for AIA by Stephen S. Fuller, Ph.D., George mason University, July 17, 2012

  5. Assuring the Viability of the US Aerospace and Defense Industrial Base • Recommendations • Carefully consider the impact of budget cuts on continued viability of A&D industrial base and the ripple effects that has on national and economic security. • Eliminate automatic “across-the-board” defense budget reductions. • Reform federal acquisitions and procurement to allow for multi-year appropriations for complex systems. • Meet constitutional budget obligations which will provide assurances of continuity and sustainability of key programs and budgets.

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