Industry executives and academics said mandatory budget cuts in the US are leading to job losses and could weaken the competitiveness of the US in the global economy, a Reuters report said. They asked the US Congress to reverse the cuts, which are also known as sequestration.
Weapons manufacturer Northrop Grumman Corp said the firm had cut back its workforce by 19% in the past few years. Chief Executive Officer Wes Bush told a news conference that more workforce reductions were in the offing unless Congress will halt the across-the-board reductions which are a requirement under the sequestration.
Bush says weapons manufacturers know that US military spending will go down with the end of the Iraq and Afghanistan wars. However, he said the added cuts that the Pentagon and other agencies of the US government have to contend with will also cause funding for research and development to be reduced. He said this could be detrimental to the US economy and even be a threat to national security in the coming years.
Reuters reported that Pentagon and its suppliers are preparing for USD 500 billion in sequestration budget cuts in the next ten years starting fiscal year 2013. This is in addition to the reductions worth USD 487 billion that were already previously planned.
Meanwhile, Association of American Universities President Hunter Rawlings told reporters that unless the cuts were reversed, future technology development would be put at a standstill. Rawlings held up his iPhone and told the those who attended the news conference, "This is a great Apple product ... but none - none - of the technological inventions that made this product possible were made by Apple. They came out of government-sponsored research."
According to National Association of Manufacturers Vice President Dorothy Coleman, the smaller firms that supply components to bigger weapons manufacturers will suffer if the sequestration will continue. Coleman said, "We're talking here about the nation's future economic development being hurt by a policy that is not only short-sighted, but totally wrong-headed."
Join the Conversation