Sequestration could worsen local outlook

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In two short weeks, sequestration is set to become reality. So far, the outlook has been grim: millions of jobs lost, hundreds of thousands more workers put on furlough and given pay cuts.

Almost everyone agrees that sequestration — designed to cut billions from the federal government starting March 1 — isn’t a good idea.

But no one has come up with an alternative to the across-the-board cuts, so federal agencies are preparing for the worst.

Secretary of Defense Leon Panetta has said 800,000 civilian workers will be put on 22 days of furlough a year, and face a 20 percent cut in pay. A report from George Mason University says the loss of jobs in aerospace and defense will have a ripple effect on the rest of the economy — a 0.6 rise in unemployment, a loss of $86 billion in gross domestic product and a reduction in economic growth from 2.3 percent to 1.7 percent.

No one is completely sure what sequestration cuts will look like — and that uncertainty is creating a difficult environment for everyone, especially the Department of Defense, which faces half the $85 billion in cuts this year.

Budgets were the topic of conversation at this year’s CyberSpace Symposium, hosted by the Armed Forces Communication and Electronics Association at The Broadmoor hotel.

“We have to get this budget thing fixed,” said Gen. William Shelton, commander of the Air Force Space Command at Schriever Air Force Base. “There are a lot of pressures on all of us — we’re having to make tough, tough decisions without a lot of good information. Right now, we have no information on the rest of the fiscal year, much less what 2014 and 2015 might look like.”

The sequester means the Department of Defense must cut about 10 percent of its programs, across the board. There is no room for negotiating or switching money from one program to another.

“Sustaining security in this atmosphere is tough,” Shelton said. “Lewis Carroll said, ‘If you don’t know where you’re going, any road will take you there.’ And we certainly feel like we’re in Wonderland in this environment.”

No way to plan

The uncertainty has paralyzed the Pentagon, analysts say. Because no one is sure if cuts will occur or how long they’ll last, DoD doesn’t know how to plan. Defense Secretary Leon Panetta signaled the seriousness of the situation earlier this month, when he said two aircraft carriers would not deploy to the Persian Gulf because of budget uncertainties.

The frustration felt by military leaders is echoed by private businesses that supply the government with technology solutions, contract workers and other services.

Symposium organizers saw an opportunity to save money using the private sector.

“This symposium is all about finding ways to do more with less, leveraging commercial technology to maintain and increase our defense posture despite cutbacks,” said Fred Mooney, chairman of Defending America Cyberspace and head of the Rocky Mountain chapter of AFCEA.

Mooney said technology could be used to save money because computers and computing devices were moving so much more quickly than in the past.

“Now more than ever, we need to leverage commercial information technology to deal with lower budgets,” he said. “And we need a robust industry-military partnership to secure cyber superiority.”

Businesses could benefit greatly from that partnership, despite the upcoming budget cuts. Cyber security is one area the government is investing in — announcing 4,000 new jobs for cyber commands in the Army, Air Force and Navy.

Shelton, addressing roughly 700 people, said there might be opportunities for the Air Force to cut its budget while giving some business to private industry.

“That’s our challenge,” he said. “We’ve made progress and now our job is to assess every piece and part of the programs, and outsource to industry where it makes sense to outsource. We need to figure out what industry can do to aid in cyber security in a way that best supports the war fighter.”

That’s exciting news for some defense contractors. Microsoft CEO Steve Ballmer pledged support, telling the crowd: “You are working in one of the most challenging budget environments. You have to do better with less expense. For what it’s worth, these are times of great flux, but times of great opportunity.”

Cloud computing’s role

The government can leverage the latest technologies to save money, he said. Cloud computing alone will make information delivery cheaper, he said.

“It’s a fundamental shift,” Ballmer said. “Through the cloud — both the public cloud and the private DoD cloud — you can send around software, upgrade devices and do it at less cost. The DoD is looking for efficiencies across the board, and mobile trends can help achieve those efficiencies. The cloud will save money.”

Ballmer said military personnel could be “on the go” and still have access to information inside forward operating bases. There are ways, he said, to provide efficiencies without sacrificing security.

“Thanks to mobile computing, there are concepts that make sense, new scenarios that didn’t make sense before — we can do now,” he said.

But even with mobile technology leading the way to cost savings — it won’t help save jobs and the economy, say companies that will be deeply affected by the March 1 sequestration.

“The danger that sequestration poses to the economy and our national security cannot be overstated,” said Aerospace Industries Association President and CEO Marion C. Blakey. “More than 2 million jobs are at stake from all sectors. Sequestration affects all Americans and we must pull together to set it aside.”