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Texas to see significant defense cuts in event of sequestration

Houston Chronicle

Thursday, February 21, 2013

They say everything is bigger in Texas and beginning March 1, that includes reductions in military spending.

Scheduled Army budget cuts could amount to an economic loss of around $2.4 billion for the Lone Star State, if Congress fails to pass a budget plan before the beginning of March. The cuts will induce furloughs and layoffs across the Department of Defense, and Texas is among the worst hit with a projected loss of $34,734 jobs, according to documents first obtained by USA Today and reviewed by Texas on the Potomac.

Steve Bell, senior directory of economic policy at the Bipartisan Policy Center says local communities with more defense economic involvement will see a bigger impact. The Corpus Christi Army Depot will face $799 million in reductions. Fort Hood and Fort Bliss — two of the largest military bases in the country — will face a reduction of $291 million and $ 136 million, respectively.

And spending is significant in Texas. The state is the third highest total recipient of Department of Defense spending — after Virginia and California — receiving $54 billion in 2010, according to a Consolidated Federal Funds report.

And per capita spending is higher in Texas at $2,157 per person, compared to the national average, $1,773 per person.

However, Bell says Texas’ “diverse economy” will help keep the state from enduring too much backlash.

“The biggest impact will be on Texas firms that will have large contracts with the Department of Defense,” he said.

2013-02-21 00:00:00
Houston Chronicle