Dayton Business Journal...
9/11 defense funding boom ending
by Joe Cogliano, DBJ Senior Reporter
Sunday, September 11, 2011 

On the heels of the Sept. 11 attacks, America’s defense budget boomed. 

Ten years later, annual defense spending has grown from nearly $320 billion to more than $680 billion, and many of those companies that support the government have seen a corresponding boost in sales, profit and employment. 

In the Dayton area alone, Wright-Patterson Air Force Base    has grown to 27,000 employees and its annual impact on the community has grown to more than $5 billion. In addition, thousands of defense contractor jobs outside the fence support Wright-Patt and other military bases across the country. 

Now, the U.S. government is gearing up to put the brakes on defense spending and the Dayton-area’s ability to adapt — or its failure to adapt — is expected to make a significant impact on the local economy. 

Congress is mandated to find $350 billion in spending cuts from the defense department spread throughout the next decade, but that does not limit the amount that can be spent in any individual year. The mandate was included in the August debt limit deal Congress cut with President Barack Obama. The situation for the defense industry could worsen though, because of a clause in the deal that says another $500 billion in defense spending cuts over 10 years would automatically kick in if the 12-person Supercommittee fails to reach a deficit-cutting deal by November. War spending also is expected to wind down. 

Reaching a deal is critical to the defense industry, and therefore the Dayton area, because any kind of compromise by the Supercommittee to reach a deal is better than the automatic cuts, said Michael Gessel, vice president of federal government programs for the Dayton Development Coalition    .

“The automatic trigger is stacked against defense spending,” Gessel said. 

The Dayton region may have at least one advocate on the committee as U.S. Sen Rob Portman, R-Ohio, is a member. 

Insiders say contractors are expected to be the hardest hit, as the Defense Department traditionally works to keep as many of its own employees as possible in cutbacks. 

Coalition officials are aggressively presenting the case on how Wright-Patt can be used most effectively to advance the U.S. Air Force mission. Locally, a significant amount of work centers around acquisitions. 

Gessel said a big key to how hard Wright-Patt, as well as the local defense industry, gets hit will be determined by the emphasis placed on buying as part of a long-term strategy to trim costs. 

“Will the government put more resources into acquisition work to improve efficiencies and make the acquisition process more cost effective?” he said. “If the Defense Department can get those costs under control or reduce them through smart buying, then they will save money in the long run.” 

In addition to their impact on the economy, the cuts also are expected to hamper long-term national security. 

When cuts were first proposed, the money was supposed to go toward funding modernization, but now doesn’t appear that will happen, said Dan Curtis, owner of Beavercreek-based Curtis Consulting. 

“We’ve spent more than a decade at war are and our warfighting equipment is worn and getting old,” Curtis said. “It’s a pretty serious problem now and will become a greater one in the future.” 

Read the rest of the story with links at the Dayton Business Journal