U.S. Representative Mike Kelly (PA-03) responded to a report by the National Association of Manufacturers (NAM) that Pennsylvania will be one of the hardest hit states once the more than $500 billion in defense budget cuts take place in January 2013. According to the report, an estimated 1.2 million jobs will be lost as a result of the cuts, which are also known as "sequestration." NAM, which represents hundreds of employers throughout the Commonwealth, said that in addition to the 200,000 military jobs that will be lost in 2014, a million private sector jobs will be cut as well, including 130,000 in the manufacturing industry.
Calling the findings "sobering," Rep. Kelly said the report underscores the urgency of stopping the cuts before they wreak havoc on our nation's fragile economy and increase our already historically high rates of unemployment.
"I am deeply concerned that the cuts to our military will not only compromise our national security and the well-being of our troops, but they will also cause our economy to bleed even more jobs at a time when we're already facing record rates of unemployment and more Americans are sitting on the sidelines because there simply aren't the opportunities we used to have."
Rep. Kelly's concerns were echoed by Jerry Purcell, vice president of Penn United Technologies Inc., a manufacturing company headquartered in Butler County.
"Over the past several years we have continued to see more and more of our historical stable markets moving manufacturing overseas, with much of that business going to China," said Mr. Purcell. "One of the ways we have backfilled some of that exiting business has been through the U.S. defense market. With potential cuts on the defense budget coming, we can only see that hurting both our current defense business as well as any future growth in this key market. In addition, we understand China's new 5-year plan lists the next global industries they are strategically targeting. These include several that are important to our current and future business, which makes us even more vulnerable to these defense cut-backs, severely impacting our ability to grow in the near future."
Yesterday, Rep. Kelly voted in support of the Sequestration Transparency Act of 2012 (H.R. 5872), which would require President Obama to submit a report to Congress detailing how the administration plans to implement the budget sequestration cuts required to take place in January 2013 under current law. While the House has voted to replace the sequester, since the president and Senate haven't acted to stop the cuts, the House is seeking more information from the Office of Management and Budget to ensure it has a better understanding of the sequester's impact.
According to NAM, the 10 top states ranked by the magnitude of the job losses in 2014:
California -- (148,000)
Virginia -- (115,000)
Texas -- (109,000)
Florida -- (58,600)
New York -- (42,100)
Maryland -- (40,200)
Georgia -- (38,700)
Illinois -- (35,400)
Pennsylvania -- (34,700)
North Carolina -- (34,200)
The biggest proportional reductions will come within transportation equipment and instruments: Aerospace (3.4 percent job loss by 2015, 2.3 percent job loss by 2022), Ships and boats (3.3 percent job loss by 2014, 1.7 percent by 2022), Search and navigation equipment (9.3 percent job loss by 2016, 8.6 percent by 2022), according to the report.