As Automatic Budget Cuts Loom, The Pilot Light for Our Future is Flickering

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The March 1st deadline for indiscriminate budget cuts required by the Budget Control Act of 2011 is bearing down on us quickly.  You have probably heard of this referred to as sequestration.   It’s a shame that our politicians have procrastinated and not done the job we pay them to do.  If they cannot agree on a plan to pay off our debt and get us living within our means by March 1st, havoc will be wreaked on our economy and the pilot light of our future snuffed out due the indiscriminate nature of the budget cuts.

I’m most concerned about the impact on the Department of Defense (DoD).  We are in a very precarious situation with global instability and very real threats that exist.  As such we will not be able to significantly cut back on the ongoing operations.  So where will the DoD cut?  The bulk of the cuts would come from reductions in research and development, funding of new weapons systems and infrastructure creation.

DoD funded research and projects have proved critical to not only maintaining our military superiority but also to our commercial economy.  For example, the interstate highway system, air traffic control system and even the Internet were the result of DoD projects.  Much of the technology that is commonplace today in manufacturing, advanced materials, software and electronics originated as projects sponsored by the DoD.   The DoD has historically funded technology development and infrastructure build out that no commercial enterprise would have been able to make a business case to justify.  Our military and economic superiority has benefited tremendously from this approach.

What could happen if we allow the indiscriminate cuts of sequestration to go into effect?

  • Our enemies will catch up to our level of military technology quickly and we will find our warfighters fighting a fair fight.  If we send our soldiers off to fight a fair fight, we will have failed them.  We cannot allow that to happen.
  • The loss of funding for new weapon systems will further degrade our manufacturing capability and we will lose even more of the skill set to produce aircraft and ships.  In the future we will find ourselves outsourcing the production of our weapon systems to contractors in foreign nations.  The United Kingdom let their shipbuilding industry die and is now contracting the building of their warships to Daewoo in South Korea.  We cannot put ourselves in a position where we have no choice but to outsource our defense to foreign nations.  A healthy industrial base is critical for national security.
  • The research and development engine that has propelled the U.S. economy will be seriously impaired.  We have already experienced a tremendous erosion of our manufacturing industry, a major cause of our depressed economy and high unemployment rate.   If we have any chance of reviving our economy and providing a bright future for our children we must find a way to maintain DoD funded advanced research and infrastructure creation.

As a CEO, I well understand what it means to make strategic budget cuts while increasing revenue and paying off debt.  I have had to do this in commercial businesses that I have run, it is not fun and everyone involved feels some pain.  It has to be done in a thoughtful way that preserves the key assets, protects the brand and allows for the development of next generation products that , in turn, allows the company to not only survive, but also gives the company a future.

When it comes to our country’s serious fiscal problems we need an immediate pragmatic business oriented approach, less ego and less politics.


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