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Sequestration Ax Looms Over 6 La Mesa Companies, Report Suggests

Pentagon budget cuts of $500 billion could hammer San Diego County, including local business.

Members of Congress and business lobbyists have been sounding alarms about sequestration—looming Pentagon budget cuts that could exceed $500 billion over 10 years.

They could begin in January if lawmakers don’t deal with the so-called “fiscal cliff,” including the fallout of the 2011 Budget Control Act.

But what does that mean for La Mesa?

Although military jobs and pay would not be affected, the cuts could trickle down to six local companies that did business with the Department of Defense last year to the tune of about $1.1 million.

According to the Center for Defense Policy, which this week released updated data from several federal sources, these La Mesa companies did business with the Pentagon in 2011 (with the value of contracts noted):

  • ($130,294) on El Cajon Boulevard in the category of “Environmental Consulting Services.”
  • . ($3,960) on El Cajon Boulevard for “Commercial and Industrial Building Construction.”
  • ($17,523) on Via Mercado for  “Custom Computer Programming Services.”
  • Pisces Seafood International Inc. ($304,018) on Grandview Drive for “Fresh and Frozen Seafood Processing.”
  • Stephen J. Wencho ($280,123) on Avenida Thomas for “General Medical and Surgical Hospitals.”
  • Turbo CM Inc. ($363,893) on La Mesa Boulevard for "Engineering Services."

Pentagon cuts of 18 percent over 10 years are forecast under current plans.

An analysis in late August by Todd Harrison of the Center for Strategic and Budgetary Assessments (see attached PDF) said cuts would not affect funding already obligated in contracts, but would lead to “reduction in new contract awards, contract extensions, options, etc. … and likely force DoD to renegotiate contracts to buy in smaller quantities and cause unit costs to rise.”

Who would decide on the cuts?

The Congressional Budget Office says: “The [Obama] administration’s Office of Management and Budget has sole authority to determine whether a sequestration is required and, if so, the proportional allocations of any necessary cuts.”

Sequestration is the word used to describe automatic cuts mandated by the August 2011 Budget Control Act, which came after the national debt ceiling debate and failure of the congressional “super committee” to reach a deal on deficit reduction.

Nobody knows where the budget ax would swing—and even how hard San Diego County and its large defense industry and military presence would be hit.

But in mid-June, Rep. J. Randy Forbes of Virginia was quoted by U-T San Diego as telling a University of San Diego audience that “this is something that ought to be in every congressional debate, as we go into the November election.”

In the Shiley Theater forum also attended by fellow Republican Rep. Duncan D. Hunter of Alpine, Forbes also said: “I think it’s a fair thing to say, ‘Where do you stand on defense cuts, and what’s your proposal to stop them?’”

San Diego County boasted more than 3,000 businesses and companies with defense contracts in 2011, according to a breakdown of the county’s five congressional districts by the Center for Security Policy.

These included 55 in Poway, 28 in La Jolla, 23 in Santee, 19 in Encinitas, 19 in Coronado 5 in Lemon Grove, 10 in Spring Valley, and six each in Ramona, Del Mar and Imperial Beach.

In early August, Frank Kendall, a Defense Department undersecretary, urged a San Diego Convention Center gathering “to keep reaching out to local leaders in Congress and letting them know the job cuts that could come to their districts as a result of sequestration,” according to the San Diego Daily Transcript.

“That seems to be getting their attention more than anything else right now,” Kendall was quoted as saying.

On Tuesday, the right-wing think tank Center for Security Policy posted congressional district reports to help estimate the potential local economic impacts of the cuts to the nation’s defense budget under sequestration. 

Reports citing 2011 data showing the effect of 18 percent “sequestration cuts” for all U.S. states and territories, counties and cities.

The center, whose projects have criticized as biased controve projected that California would loses at least 141,130 jobs under sequestration, including 15,341 civilian Defense Department jobs and 125,789 private-sector jobs.

Reps. Hunter and Forbes have said 30,000 San Diego County jobs could be lost.

For his part, Hunter is keeping attention focused on the issue with a Sept. 25 “interactive public conference” called San Diego and National Defense: Protecting Our Future.

“Take advantage of this opportunity for the San Diego community to come together and discuss tangible strategies on how to protect our local defense industry, assets and resources,” a promotion for the event says. “Topics will include Procurement and Acquisition, Base Closing and Sequestration, Education and Workforce, Housing, and Small Business.”

The event is set for 7:30-10:30 a.m. at Hojel Hall of the Americas Auditorium at UC San Diego.

Citing the Aerospace Industries Association, the Center for Security Policy said: “Four out of five likely voters in critical battleground states want our leaders in Washington … to find an alternative to ‘sequestration’ budget cuts before the November elections take place, according to a Harris Interactive online poll.”

In 2007, a writer for Watching the Watchers said a column in a forum established by the Center for Security “called on President Bush to declare himself ‘President for Life’ and remove all Arabs from the Middle East so he can ‘repopulate the country with Americans.’ ”

But figures used in the center’s sequestration report appear to be unbiased.

The center said contract figures for the sequestration report “derived from public data at the Federal Procurement Data System based on queries from governmentcontractswon.com, and combined with public ZIP code data linked to congressional districts.”

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