By: Lauren Sega
The New Political


The Obama Administration brought its 2013 budget before Congress, with projected defense budget cuts that could mean trouble for Ohio’s businesses.

In 2012, President Barack Obama limited the U.S. military capability to fighting one regional conflict and one holding conflict. Defense budgets for 2013-2021 were cut $487 billion — a 9 percent cut.

Sequestration, required by law in 2011, mandates $500 billion more in 2013-2021 defense cuts — an 18 percent cut.

Many are concerned for Ohio’s counties, cities and industries.

“Local employers, citizens and communities will bear the brunt of these cuts,” said Frank J. Gaffney Jr., President of the American Center for Security Policy in a press release. “The Defense Breakdown Economic Impact Reports will allow them to prepare for this impact and to enlist their elected officials in mitigating it.”

Public data for 2010 shows Ohio businesses earned over $6.62 billion supporting America’s defense. Under these 10-year defense cuts of 9 percent, Ohio annual business losses could be at least $596 million.

At the Sequestration level of 18 percent in defense cuts, Ohio annual business losses could be at least $1.19 billion.

“Drastic cuts to defense … will cause irreversible damage to America’s industrial base and R&D capabilities,” Gaffney continued.

These planned budget cuts could also hit small businesses.

From 2000-2010, 6,433 Ohio businesses provided goods and services for America’s national defense, 213 of which were minority owned, including 85 owned by Black Americans, 20 owned by Hispanic Americans, eight owned by Native Americans, 41 owned by Asian-Pacific Americans and 59 owned by other minority Americans.

Small businesses also include 210 woman-owned businesses and 261 veteran-owned businesses, including 65 owned by service disabled veterans.

However, post-secondary education remains a priority on the 2013 budget.

It expands access to college through Pell grants, maintaining the grant at $5,635 through 2014-2015, a $900 increase from 2008, which will ensure post-secondary education for up to 10 million students.

The budget would also give more aid to universities that keep tuition affordable, provide good value, help needy students and increase funding for work study jobs while shifting aid away from schools that fail to do so.

It offers a $1 billion investment that will challenge states to increase the affordability of higher education. It suspends the scheduled increase of subsidized Stafford loans, which are set to increase this summer from 3.4-6.8 percent; and makes the American Opportunity Tax Credit, a partially refundable tax credit, permanent.

The proposal includes an $8 billion investment in community colleges for training workers in high-growth industries. It would meet Obama’s goal of training 2 million unemployed Americans with skills to find a job.

A new Community College to Career Fund would also be created, providing grants to schools as incentive to partner with businesses and offer training in fields like health care and clean energy.

This fund is managed jointly by the Labor and Education departments and would provide paid internships for low-income students and financial assistance to small business entrepreneurs.

While defense cuts could cause trouble for Ohio’s economy, pushing more people into college and into the workforce could counteract this. His plans provide people of all incomes with the opportunity to gain a job.