Sarah Chacko

Defense News

Virginia, California and Texas stand to lose the most money in defense contracts under across-the-board budget cuts scheduled to take effect Jan. 2, a new report shows.

Small and minority-owned businesses also stand to lose billions of dollars in defense contracts under the reductions, known as sequestration, according to reports posted this week by the nonprofit Center for Security Policy.

The reports compare defense spending in 2011 to two potential budget cuts: a 9 percent reduction that the president proposed for the 2013-2021 defense budget and an 18 percent reduction that would occur under sequestration.

For example, companies in Virginia earned $54.8 billion in government contracts in 2011, the nationwide report shows. A 9 percent budget cut would reduce contract spending in the state by nearly $5 billion, and an 18 percent budget cut would reduce spending by close to $10 billion, the report shows.

In another example, minority-owned businesses, which earned $33 billion in federal contracts last year, would lose nearly $3 billion under a 9 percent reduction and nearly $6 billion under sequestration, the report shows.

The Center for Security Policy published the reports for the Coalition for the Common Defense, which is made up of several retired military officials as well as groups including the Lexington Institute, Heritage Foundation and Center for Military Readiness.

The Center for Security Policy also published congressional district reports that show the 2011 defense contracts in each congressional district.

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