Military presence makes Washington vulnerable to cuts
TACOMA, Wash. — Defense spending soared in Washington state last year, even as the specter of long-anticipated budget cuts drew closer.
The Pentagon steered $9.2 billion worth of work on military contracts to the Evergreen State in the 2012 budget year, up from $8.1 billion in 2011, according to records at the federal spending database usaspending.gov.
Lawmakers and industry representatives delighted in the region’s success, but they could not say whether they anticipate a similar run this year.
Too much remains unsettled about Congress’ plans for the defense budget, which could lose $500 billion over 10 years if lawmakers fail to prevent the so-called automatic “sequestration” this spring. The Defense Department would have to cut almost $50 billion immediately – money that could come from the ranks of civilian employees, weapons systems or base construction.
Officials have not defined how they’d implement those sudden cuts, but Washington state is vulnerable because of its concentration of military installations and defense industries.
Congress’ New Year’s deal to prevent the “fiscal cliff” merely delayed the defense reductions until March. Lawmakers say they want to make a compromise that would take the sequester off the table permanently.
“The next two months are going to be very telling,” said Rep. Rick Larsen, D-Everett, a member of the House Armed Services Committee. He favors raising some revenue in addition to making defense cuts as part of a long-term deficit reduction plan.
“If it’s just going to be spending cuts, honestly, the Pentagon will get hurt more than otherwise,” he said.
The amount of cash flowing to Washington’s defense manufacturers climbed in the past two years because the Pentagon opened the checkbook to replace aging fleets of Air Force and Navy jets. Boeing is working on contracts for both services.
The company won nearly $4 billion worth of work in the 2012 budget year on the Navy P-8A, a submarine-hunting jet that’s replacing the decades-old P3. Some P-8A jets are expected to be stationed at Naval Air Station Whidbey Island.
So far, the Navy has ordered 24 of the aircraft and India has bought eight. The Navy anticipates building a fleet of 117 P-8As and Boeing could receive another major contract to round out that order in the next year.
Boeing also is developing a new Air Force tanker, the KC-46A. That aircraft could be stationed at Fairchild Air Force Base near Spokane, the Pentagon announced this week.
At Boeing Field last week, four P-8A jets were lined up in the company’s Mission Systems Installation and Checkout Facility, awaiting sensitive military equipment. Three of the jets in the hangar are bound for Naval Air Station Jacksonville in Florida, One is set to join India’s fleet.
The P-8A essentially looks like a Boeing 737, but it’s fitted with equipment to spot and disrupt enemy submarines. Spirit builds the airframes in Kansas, and they’re finished at Boeing’s 737 production line in Renton.
Five completed jets have been delivered for testing to Jacksonville.
Charles Rainey, spokesman for Boeing’s P-8A program, said the company expects to finish about one jet a month for the foreseeable future.
The new jet should enable the Navy to target suspected submarines more quickly than its predecessor; its updated surveillance gear empowers sailors to share information more easily, Rainey said.
“It is early still, but the Navy is very excited,” Rainey said.
Washington’s congressional delegation helped make a case for such projects in recent years, but it has lost a champion for the region’s defense industry. Rep. Norm Dicks, D-Belfair, retired this year after a 36-year career in which he helped steer more than $2 billion worth of federal earmarks to the state.
He played a key role in persuading the Defense Department to select Boeing’s bid for the $35 billion KC-46A tanker program by showing its longterm maintenance costs would be less expensive than the competition.
Other lawmakers say they’ll continue to advocate for local companies and military installations when their interests align with the Pentagon’s goals. Dicks’ successor, Rep. Derek Kilmer, D-Gig Harbor, gained a seat on a defense-related committee in part for that purpose.
“One of the reasons I joined House Armed Services was to be a voice for military families and a voice for national security,” said Kilmer, who spent much of Thursday and Friday meeting with officers at Joint Base Lewis-McChord and Naval Base Kitsap. “All of us here are very conscious of the important role local bases play.”
Defense spending in Washington state stayed below $5.8 billion a year for much of the past decade even as the Army poured money into renovations for an expanding Lewis-McChord. Since 2001, the Army spent more than $1.7 billion improving the base.
A recent Army Corps of Engineers presentation to the state’s Associated General Contractors showed that 2013 could see hundreds of millions of dollars in more work at the base south of Tacoma. Renovations of aging headquarters likely will be up for bid, as well as a large waste-water treatment project.
Meanwhile, the Navy is moving forward with a $700 million expansion of its submarine wharf at Naval Base Kitsap.
Lawmakers say those investments show the Defense Department remains committed to Washington state as the Pentagon heads into a period of post-war reductions. They say President Barack Obama’s call to shift the military’s attention should work in the region’s favor.
“Due in part to the U.S. posture refocusing on the Pacific, Washington state will play a critical role in our national defense, and that may be reflected in future defense budgets,” said Rep. Adam Smith, D-Bellevue, the ranking member of the House Armed Services Committee.
So far, the state has not lost any major units from its Air Force, Navy and Army installations. Defense Secretary Leon Panetta last year said the Navy bases in the Puget Sound should remain busy in the years ahead, and the Army has not signaled significant reductions at Lewis-McChord.
Lawmakers say they’re not taking the state’s recent fortunes for granted. They praised Gov. Chris Gregoire for setting aside money in her final budget proposal to focus on military issues and for calling together an alliance of local agencies to support the armed forces.
“We do a lot of things in the state to take care of the families that move here,” Larsen said. “That’s an important ethic for us to continue to have, and it gives us an edge over the rest of the country.”
Industry advocates remain anxious, citing Congress’ inability to agree on a path to deficit reduction. They contend the uncertainty is holding up private investment because companies don’t know how the cuts will unfold.
“Most are still concerned with sequestration,” said Gary Brackett, business and political manager of the Tacoma-Pierce County Chamber of the Commerce.
“That was kicked down the road, and so that remains a big point,” he said. “In some respects the deal that was cut earlier this month has made that whole issue worse” because major questions remain unsettled.