Ken Stone

Palos Verdes Patch

Members of Congress and business lobbyists have been sounding alarms aboutsequestration—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 the Palos Verdes Peninsula?

Although military jobs and pay would not be affected, the cuts could trickle down to 14 local businesses and individuals that did business with the Department of Defense last year to the tune of $49.6 million.

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

  • ABC Equipment Rental LLC (42 contracts for a total of $1,281,550) for “construction, mining and forestry machinery and equipment rental and leasing”
  • Advanced Arm Dynamics Group Incorporated (one contract for $12 million) for “all other miscellaneous ambulatory health care services”
  • Cox Communications Inc. (five contracts for a total of $45,578) for “wired telecommunications carriers”
  • Del-Jen Inc. (six contracts for a total of $33,695,079) for “facilities support services”
  • Emerson Company (36 contracts for a total of $630,142) for “other communication and energy wire manufacturing”
  • John H. Nunn (one contract for $42,500) for “other miscellaneous durable goods merchant wholesalers”
  • Novaspectra Inc. (one contract for $198,300) for “research and development in the physical, engineering and life sciences (except biotechnology)”
  • Roham International Inc. (one contract for $20,460) for “other services related to advertising”
  • Waikiki Beach Condominiums (one contract for $1,127,100) for “hotels (except casino hotels) and motels”
  • Jeffrey N. Younggren, PhD. (three contracts for a total of $35,250) for “offices of physicians, mental health specialists”
  • Artmoxm Inc. (one contract for $10,931) for “all other miscellaneous manufacturing”
  • Atlantic Training Inc. (one contract for $73,995) for “professional and management development training”
  • Composite Support & Solutions (two contracts for a total of $354,436) for unknown projects
  • LFK Technology Corp. (one contract for $99,156) for “research and development in the physical, engineering and life sciences (except biotechnology)”

Pentagon cuts of 18 percent over 10 years are forecast under current plans.

An analysis in late August by Todd Harrison of the Center for Strategic and Budgetary Assessments (see attached PDF) said cuts would not affect funding already obligated in contracts, but would lead to “reduction in new contract awards, contract extensions, options, etc. … and likely force DoD to renegotiate contracts to buy in smaller quantities and cause unit costs to rise.”

Who would decide on the cuts?

The Congressional Budget Office says: “The [Obama] administration’s Office of Management and Budget has sole authority to determine whether a sequestration is required and, if so, the proportional allocations of any necessary cuts.”

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.

Nobody knows where the budget ax would swing—or even how hard the South Bay and its large defense industry presence would be hit.

But in mid-June, Rep. J. Randy Forbes of Virginia was quoted by U-T San Diego as telling a University of San Diego audience that “this is something that ought to be in every congressional debate, as we go into the November election.”

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.

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

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

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

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, and combined with public ZIP code data linked to congressional districts.”

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