Aug 10, 2010
DEVELOPING: DoD seeks spending cuts in VA
10 Aug 2010
Posted by VAR
Virginia’s economy stands to take a heavy blow if Secretary of Defense Robert Gates’s proposal to cut the Pentagon’s budget goes ahead as planned. And there’s little recourse for the Commonwealth’s political leaders who are obviously concerned about the proposed cuts: Congress doesn’t need to approve them. Here’s what’s at stake in the Commonwealth.
- The closing of the U.S. Joint Forces Command (JFCOM) in Hampton Roads, one of the Pentagon’s 10 combat installations, would eliminate 6,100 military, civilian and contractor jobs
- 10% cuts annually for three years on $35 billion in defense contracts (70% of which are awarded to Virginia companies according to a 2008 estimate) would likely have a major effect on employment, especially in Northern Virginia
However, Gates said that Virginia might actually benefit from the cuts if he can allocate the savings to other programs:
“If I can add a billion or two to the Navy’s shipbuilding budget,” he said, “Virginia might come out ahead with more than it loses.”
Virginia’s housing markets are still on rocky footing, and these proposed cuts could further jeopardize the Commonwealth’s economic recovery and housing markets. Governor McDonnell has already signed an executive order creating a commission to advise him on possible steps.
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