Cuts of roughly $1 trillion to the defense budget over the next 10 years would cost the nation more than one million jobs, slow US economic growth, and reverberate throughout non-defense sectors, said three noted academics Wednesday. “We’re talking about cuts in defense spending . . . in an environment in which the economy already has a 9 percent unemployment rate and many others who are on part time work. So we’re making worse the weakness of the American economy by cutting spending,” Martin Feldstein, Harvard University economics professor, told the House Armed Services Committee. He was discussing the impact of sequestration, the 2011 Budget Control Act’s provision that would take up to $100 billion from the Pentagon’s budget annually over that span if lawmakers cannot agree where to slash federal spending. Stephen Fuller, economics professor at George Mason University in Virginia, said in Fiscal 2013 alone, the projected growth of the nation’s GDP would fall by 25 percent from 2.3 percent to 1.7 percent. “More fundamentally, we are going to live in a world that is more hostile to our economic and democratic values,” said Peter Morici, University of Maryland economics professor, warning of the consequences of a weakened US military. (See also The Ugly Truth.) (Feldstein statement) (Fuller statement) (Morici statement)
The Air Force and Boeing agreed to a nearly $2.4 billion contract for a new lot of KC-46 aerial tankers on Nov. 21. The deal, announced by the Pentagon, is for 15 new aircraft in Lot 11 at a cost of $2.389 billion—some $159 million per tail.