1. Preserve the Industrial Base Carol A. Cash, Chair Aeronautics Subcommittee VP, Public Policy

2. 2 Assuring the Viability of the US Aerospace and Defense Industrial Base Background US Aerospace A&D industrial base is critical to our economy, national security, infrastructure and future workforce –Supports 3.5 million jobs –Contributes 2.23% of GDP –Small businesses generate almost half of private sector jobs, 64% of net new private sector jobs, 43% of high tech employment and 33% of exports* –Highly skilled, highly paid workforce –Possesses unique capabilities and expertise *AIA Second to None, 2012

3. Assuring the Viability of the US Aerospace and Defense Industrial Base Non-DOD impacts* –NASA »8.2% cut to agencys budget in 2013 »potential loss of 20,500 private sector jobs in 2013 »Significant impact to states with aerospace clusters (FL, MD, AL, TX, CA, CO, VA, OH, etc) –NOAA »8.2% cut to agencys budget in 2013 – loss of more than $154 million »Potential loss of 2,500 jobs in 2013 »Impact to replacement weather satellites 3 *Economic Impact of Sequestration on Civil Space Programs, AIA Second to None, December 2012

4. Assuring the Viability of the US Aerospace and Defense Industrial Base Budget Control Act (BCA) of 2011: –Congress has postponed major impacts until March –Sequestration will mandate ~10% cuts to all USG agencies –Additional cuts over next 10 years –Result in reduction of nations GDP by $215B, decrease workforce personal earnings by $109.4B and cost 2.14M jobs (1.5% increase in unemployment)* Other budget decisions in March –Continuing Resolution –Debt Ceiling 4 *AIA Second to None, 2012

5. Assuring the Viability of the US Aerospace and Defense Industrial Base BCA 10-year impact –DOD $800 billion –Non-DOD $700 billion – including $200 billion in mandatory programs (mainly from Medicare) 5 BCA Total Spending Reductions (DOD and Non-DOD – in millions of nominal $s* Report for AIA by Stephen S. Fuller, Ph.D., George mason University, July 17, 2012

6. Assuring the Viability of the US Aerospace and Defense Industrial Base Recommendations Carefully consider the impact of budget cuts on continued viability of Industrial Base (especially small businesses) Eliminate automatic across-the-board defense budget reductions Provide assurances of continuity and sustainability of key programs and budgets 6

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