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Military Spending Cuts Loom Over Imperial Beach Companies, Report Suggests

Pentagon budget cuts of $500 billion could hit San Diego County hard, including Imperial Beach businesses.

Updated 2:55 p.m. Wednesday to include additional information from Captain Gary Mayes and quotes from Congresswoman Susan Davis.

Members of Congress and business lobbyists have been sounding alarms about sequestration—looming Pentagon budget cuts that could exceed $500 billion over 10 years.

They could begin in January if lawmakers don’t deal with the so-called “fiscal cliff,” including the fallout of the 2011 Budget Control Act.

But what does that mean for Imperial Beach?

Besides the possible loss of military jobs, the cuts could trickle down to six local companies that did business with the Department of Defense last year to the tune of $3.46 million.

According to the Center for Defense Policy, which last week released updated data from several federal sources, these Imperial Beach companies did business with the Pentagon in 2011 (with the value of contracts noted):

  • Adept Process Sercvices, Inc. ($3,121,491) on Seacoast Drive in the category of "Ship Building and Repairing."
  • Coronado Distribution Company, Inc. ($34,347) on Dahlia Ave in the category of "Other Commercial Equipment Merchant Wholesalers."
  • Gomezllanos ($25,488) on Holly Avenue in the category of "Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)."
  • Shabazz Leander ($9,633) on Imperial Beach Boulevard in the category of "General Medical and Surgical Hospitals."
  • David Ward ($159,925) on Delaware Street in the category of "Office of Chiropractors."
  • William C. Weiber ($106,073) on Imperial Beach Boulevard in the category of "All Other Miscellaneous Wood Product Manufacturing."

If these six lost 18 percent of their U.S. contracts—the nationwide share of Pentagon cuts forecast under current plans—the local hit would be about $620,000.

Nobody knows where the budget ax would swing—and even how hard San Diego County and its large defense industry and military presence would be hit.

Sequestration is the word used to describe automatic cuts mandated by the August 2011 Budget Control Act, which came after the national debt ceiling debate and failure of the congressional “super committee” to reach a deal on deficit reduction.

San Diego County boasted more than 3,000 businesses and companies with defense contracts in 2011, according to a breakdown of the county’s five congressional districts by the Center for Security Policy.

These included 56 in Chula Vista, 55 in Poway, 28 in La Jolla, 23 in Santee, 19 in Encinitas, 19 in Coronado, 13 in La Mesa, 10 in Spring Valley, and six each in Ramona, Del Mar and Imperial Beach.

In early August, Frank Kendall, a Defense Department undersecretary, urged a San Diego Convention Center gathering “to keep reaching out to local leaders in Congress and letting them know the job cuts that could come to their districts as a result of sequestration,” according to the San Diego Daily Transcript.

“That seems to be getting their attention more than anything else right now,” Kendall was quoted as saying.

Congresswoman Susan Davis, who sits on the House Armed Service Committee and other military subcommittees, said a balance between cuts and spending is needed to prevent "putting our economic recovery at risk."

"Hopefully when election year politics are over the Congress will work together to reach a balanced and bipartisan agreement," she said.

Sequestration cuts could be devastating to San Diego's economy, she said.

Failing to reach a deal on sequestration could result in cuts to infrastructure improvements, nonprofits, education and biotech as well as housing, health care and public safety.

"Not only will these dramatic cuts make it harder for our economy to grow and create jobs, but we could see job losses in many sectors," Davis said.

At a community luncheon last week, Naval Base Coronado Commanding Officer Captain Gary Mayes said, "I haven't heard anything at my level regarding if we pass that deadline."

"This is just Captain Mayes speaking, but the Navy will continue to support the fleet. Where we would probably see a reduction is at the installation. It's a concern. I hope it doesn't come to that," he said.

According to a San Diego Militiary Advisory Council (SDMAC) study Mayes cited, one in four jobs in San Diego are related to the armed forces, resulting in 20.6 billion in direct spending annually.

Last Tuesday, the right-wing think tank Center for Security Policy posted congressional district reports to help estimate the potential local economic impacts of the cuts to the nation’s defense budget under sequestration. 

Reports citing 2011 data show the impact of 18 percent “sequestration cuts” for all U.S. states and territories, counties and cities.

The center, whose projects have been criticized as biased, projected that California would lose at least 141,130 jobs under sequestration, including 15,341 civilian Defense Department jobs and 125,789 private-sector jobs.

Reps. Duncan Hunter and Rep. J. Randy Forbes of Virginia have said 30,000 San Diego County jobs could be lost.

Hunter will host a “interactive public conference” Sept. 25 called San Diego and National Defense: Protecting Our Future.

The event is set for 7:30-10:30 a.m. at Hojel Hall of the Americas Auditorium at UC San Diego.

Citing the Aerospace Industries Association, the Center for Security Policy said: “Four out of five likely voters in critical battleground states want our leaders in Washington… to find an alternative to ‘sequestration’ budget cuts before the November elections take place, according to a Harris Interactive online poll.”

In 2007, a writer for Watching the Watchers said a column in a forum established by the Center for Security “called on President Bush to declare himself ‘President for Life’ and remove all Arabs from the Middle East so he can ‘repopulate the country with Americans.’ ”

But figures used in the center’s sequestration report appear to be unbiased.

The center said contract figures for the sequestration report “derived from public data at the Federal Procurement Data System based on queries from governmentcontractswon.com, and combined with public ZIP code data linked to congressional districts.”

San Diego Mayor Jerry Sanders made a trip to Washington in July to urge action before cuts are triggered.

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