Published: 2012
Total Pages: 84
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In this report, the National Association of Manufacturers uses the Inforum Long-Term Interindustry Forecasting Tool (LIFT) model of the U.S. economy to determine the economic and employment impacts of specific alternative scenarios for federal defense spending from 2012 to 2022. The Budget Control Act of 2011 established two mechanisms that could result in large cuts to the federal defense budget, compared to previously projected defense spending. The cuts will include reductions in military and civilian personnel, the cancellation of planned procurement of weapons programs and other equipment, and declines in expenditures for operations and maintenance due to the withdrawal from the wars in Iraq and Afghanistan. Over the short term, these reductions will result in losses to domestic production and jobs, heightened because the U.S. economy is currently operating substantially below production potential and full employment.