Looming Defense Cuts Could Put Half A Million Small Business Jobs At Risk
Last year, Congress was the first to fail to put together a sound compromise between government spending and taxes. They then handed off the task to the not-so-Super Committee which also dropped the ball when it came to coming together on the same issue. The Super Committee had a deadline however and it missed it. As a result there are a series of mandatory spending cuts set to start at the end of this year. The budget reductions should total $1 trillion over the next nine years. Should no immediate deal or extension be created between now and then the cuts will occur and many small businesses might be hurt. One of the main areas where cuts will occur is defense spending. Although many people agree that the military may not need to be as big as it was during major wars the amount of small business on the hook is shocking. Indeed, the cuts as mandated by the Budget Control Act of 2011 could put nearly 1 million small business jobs at risk across the country. Over a half of these are expected to be in relation to defense contracts, according to new projections. Defense programs often depend on small businesses for supplies and some early estimates show that Virginia could lose 65,000 defense-related jobs, while California and Texas could lose a similar 64,532 and 47,240 small business jobs respectively, reports the Washington Post. They continue, “Last week, several small business owners told lawmakers that the mere possibility of spending cuts is already preventing them from planning effectively for future contracts.
“The threat of sequestration creates uncertainty, which paralyzes small businesses,” Mark Gross, chief executive of Raleigh, N.C.-based Oak Grove Technologies, testified during a House Small Business Committee hearing, later adding that “without reasonable assurances of future business, small businesses cannot plan for the future and are not likely to invest in the company’s growth by acquiring additional equipment, facilities, or personnel.” Gross’ Alexandria-based firm provides information technology services and training for special forces and other military agencies. Seventy percent of its employees are veterans, including Gross…”
Source - Washington Post