The defense industry has found that the cuts from sequestration have been far less painful than their lobbying had claimed.


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Surprise, surprise! The defense industry has found that the cuts from sequestration have been far less painful than their lobbying had claimed.

Contractors seem pleasantly surprised that the automatic spending cuts are not hurting nearly as much as the industry’s lobbying arm warned they would in the months leading up to the sequester that took effect in March. [For example,] Lockheed Martin had predicted that sequestration would wipe out $825 million in revenue this year, but it no longer expects such a big hit. In fact, the company said, profit will be higher than initially projected. [emphasis mine]

The article specifically mentions the doomsday lobbying effort of the Aerospace Industries Association, As I noted back in December 2012, that lobbying was a lie. There is so much fat in the government that sequestration could have been three times bigger and it wouldn’t have done these contractors any serious harm. The inconsequential nature of those cuts now is illustrating the reality of this truth.

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4 comments

  • Pocono Chuck

    I am a Defense Contractor, and our biggest concerns are only now beginning to gel, as contracts are being finalized ahead of the FY. There remains a legitimate concern the contract period of performance for FY14 (beginning 1-Oct-13) will contain cuts. You may well be correct, but until we know where we stand in ’14, we’ll be concerned about Sequestration.

  • Publius 2

    I see, Robert, that you have fallen for the propaganda as well, calling the sequestration changes “cuts.” They are in no way cuts; they are reductions in the rate of growth of spending, and minor reductions as well. The only true cuts will occur when Congress — and it is unlikely that this current bunch will be courageous enough to do so — refuses to raise the debt ceiling again, thereby forcing the government to live within its means.

    You must understand that this administration and its congressional allies thrive on misinformation and confusion. An example: Congress has not enacted a budget since FY 2010, opting instead (Republicans as well as Democrats) for the so-called continuing resolutions. These allow the government to continue spending at current levels with built-in increases. Now, remember the $800 billion stimulus (another misrepresentation) that President Obama insisted be included in that budget? Because of the continuing resolutions, the stimulus has been built into federal spending for the past three fiscal years — representing the majority of the deficit. Remember also that the stimulus was supposed to be used for such badly needed items as road and bridge construction? You might want to ask where that money has gone and where the accounting is for it.

    This is a complex and difficult story to follow, but the fix is dead simple: Stop the borrowing. You stop the borrowing (and the ruinous currency expansion known as Quantitative Easing by the Federal Reserve) and you place the U.S. economy back on the road to sanity and solvency. But where are the politicians who are brave enough to demand it? And where is the righteous anger among the voters? Until both happen, the Rearranging-the-deck-chairs-on-the-Titanic analogy applies.

  • As far as I can tell, the budget mandates in sequestration relating to NASA, NOAA, and other science-related defense area budgets, the areas of which I am most familiar, were actual cuts, not reductions in the rate of growth. NASA’s budget actually did go down after sequestration. So did NOAA’s.

    The budget drop was quite minor, however, which is why I don’t really disagree with any of your points, and why I also noted that sequestration could have been 3x bigger and done little harm.

  • Joe

    The sequestration cuts were largely symbolic and meant to anger a certain part of the voting public and to create a backlash against the republican party.

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