Clinton Defense Cuts Hurt State’s Economy and National Security

It is understandable that President Clinton tries to take credit for every dime of federal money coming to California. Administration officials come here to announce virtually every contract and grant--though, in fact, credit must be shared with the Congress and, in some cases, state officials, including Gov. Pete Wilson. Clinton would like us to focus on the pluses and ignore the minuses, such as the damage to California’s economy from his tax hikes and, especially, his defense cuts.

But once in awhile, the mask slips. At a brief stop in Sacramento earlier this month to address the state Democratic Party faithful, the President said, “California, when it gets through this terrible downturn caused by military cutbacks . . . .”

That statement was strangely confused. California has been in recovery for 18 months, albeit a modest one. The state’s unemployment rate is 3 percentage points below its peak, and Clinton’s own Labor Department last month announced a widely anticipated upward revision in its estimate of employment in California. (Curiously, that revision placed most of the upward revision in Southern California, and most of that in Los Angeles County, contrary to conventional wisdom).

President Clinton is exactly right when he pinpoints the military cutbacks as the prime cause of the terrible downturn. But how brazen to ignore his role in the military cutbacks that continue to slow California’s economy, not to mention the even more serious damage they do the nation’s security!

To be sure, the cutbacks began well before the President took office. Some of the job losses in defense and aerospace in California came from those earlier reductions.

But a prime issue confronting Californians in 1996 is what the next president is likely to do to California, as well as the nation. And nowhere is the record more stark than the deleterious effect of the Clinton defense cuts on California’s economy. Simply put, they dwarf even the large one-time infusion of disaster relief following the Northridge earthquake.

To place these numbers in perspective, the federal disaster relief pending for California is estimated at a little under $6 billion. That is a one-time addition to the state’s economy. (Alternatively, one can think of it being about a $400 million to $500 million annual infusion, given current interest rates.)

Now let’s look at the defense numbers. The Clinton drawdown is sucking about $10 billion out of the state’s economy every year, and the number is growing. Over five years, the loss will be 10 to 15 times the one-time assistance received for quake relief.

So, the President is basically saying we should thank him for giving us back--in an emergency situation--less than a dime on each dollar his policies are sucking out of the state.

The impact of these defense cuts on the state’s economy is revealed by estimates that half or more of the jobs lost in California have been defense or defense-related. The Labor Department estimates that on top of the 1.1 million jobs already lost, over the next few years there will be an additional 700,000 defense jobs lost nationally under the Clinton plan--with California topping the list.

The size and certainty of the defense budget will be one of the most important determinations of whether California succeeds in extending, expanding and strengthening its economic recovery.

California benefited substantially from the Reagan defense buildup and should expect a period of adjustment to a more normal level of defense now that the Cold War is over. By the end of the Clinton drawdown, however, the defense reductions will be several times as large as the Reagan buildup, leaving defense spending at its lowest relative level since the 1930s. The Reagan buildup stared down the Soviets and defeated communism. It created the best trained military with the best equipment in the world. It enabled President Bush et al. to succeed masterfully (and at mercifully low cost) in Desert Storm. But Clinton’s own Defense Department and the Congress’ General Accounting Office say that his defense budget is woefully inadequate to fund even his minimal defense strategy.

The nation’s interest in a strong defense--to maintain America’s leadership in a still dangerous and volatile world, where international terrorism and nuclear proliferation are but two of the continuing horrors we must confront--coincides with California’s interest in a slower defense consolidation and drawdown.

To be sure, the defense cuts--plus the Clinton team’s deception of shoving non-defense items into the defense budget--are how Clinton funds his social agenda. Reversing these policies means that other federal spending must be subject to even tighter control to move to a balanced budget. That won’t be easy. But we should all be pointing out to President Clinton--and other politicians of both parties--that Californians will not accept a radical defense drawdown that endangers our national security and which has the by-product of wreaking far more havoc on California’s economy than necessary.

Californians won’t be fooled by Clinton’s claims that he is helping the state’s economy based on a one-sided arithmetic looking only at what he is providing California. They will hold him equally responsible for what he is taking out of the state. All the visits, all the speeches, all the small grants, plus the disaster relief, add up to pennies on the dollar. California would be vastly better off--and the nation and world safer--if Clinton stayed in Washington and produced a more sensible defense budget. If he did that, he would have a more plausible case to make for California’s support in 1996.