Disarming dilemma ahead for new president

TOMORROW is the traditional US Labour Day, which is celebrated the old-fashioned way - with parades, bands, and long-winded political speeches. In eight key states, however, there will be little cause for joy as they review new federal government figures that indicate a dramatic erosion of their labour base. Thanks to a report in the New York Times, we know that the Pentagon is quietly preparing dramatically larger military manpower reductions than had been expected. On top of stagnant economic growth, this comes as a shock to the eight most heavily defence-dependent states - California, Connecticut, Florida, Maryland, Texas, Virginia, Georgia and South Carolina.

The planned cuts foreshadow much larger reductions in military spending cuts after November, no matter who wins the presidential election. Pentagon officials are convinced that bigger reductions are inevitable. 'The difference is that under Clinton it will come faster, and under Bush it will be slower,' said a high-ranking official. Either president would need the funds from the defence savings, estimated by the Pentagon to be worth up to dollars 80bn by 1997, to pay for domestic programmes.

The bigger cuts will require annual defence budgets to shrink from current levels of dollars 280bn-dollars 290bn to dollars 240bn-dollars 250bn and even lower. The US Congress has already made this quite clear. The Bush Administration requested a total of dollars 291bn for defence spending this year but is likely to get only about dollars 271bn when Congress hammers out a final compromise this autumn. Pentagon planners are reluctantly looking at further manpower reductions to meet the expected spending targets in the fiscal 1994 budget, which the new president will submit early next year.

This is not only devastating news to the hardest-hit states, it is also far from certain that the overall US economy can absorb the cuts without sinking into another recession. A good gauge of the military's economic importance was the palpable relief last week of Florida's Governor, Lawton Chiles, on hearing President Bush's pledge to rebuild the hurricane-devastated Homestead Air Force Base. 'Without the base, that part of the state would die,' he said.

It is estimated that national defence accounted for about six million US jobs in 1991, or about 5 per cent of national employment. About two-thirds of these - almost four million jobs - were civilian, the bulk of them in defence-related industries. The independent US Office of Technology Assessment (OTA) estimates that by 1995, more than one million of these civilian jobs will vanish and that by 2001, 1.7 million could disappear.

Contrast this with General Motors' announcement that it would reduce its workforce by 74,000 - a plan that nearly spawned violent strikes last week - and the GM numbers seem less shocking.

In addition, there are two million jobs held by men and women in uniform. Their number is likely to shrink by 25 per cent. Consider the impact of these cuts on the Norwich-New London area of south-east Connecticut, where one in five workers holds a defence-related job.

In purely macro-economic terms, the size and speed of this defence rundown is less drastic than comparable reductions after the Korean and Vietnam wars. However, this time the cutbacks could eliminate companies and industries, which was not the case after previous military build-ups.

These realities raise a big policy question: should the US government simply walk away from its enormous investment in national defence, adopting a laissez-faire attitude that the market will determine the final outcome?

On this issue, the Bush Administration is ambivalent. Last May, it announced programmes to help affected workers and communities. These included adjustment assistance and retraining programmes, extra investment in civilian technology and an accelerated effort to transfer dual-use technology from government labs to the private sector. However, the steps were small and taken reluctantly. The Bush Administration prefers a more hands-off approach.

The US Congress is a different story. Whoever becomes president in November will face an 'activist' Congress on defence conversion, which will result in a 'managed' approach to living with less military spending.

The OTA points out that no other industrial country would undergo such a dramatic shift without benefit of government planning and assistance. In this respect, the US could learn much from France's experience in restructuring its defence industry.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'