DoD: How Looming Cuts To Defense Budget Would Bump National Unemploment Figure by 1%

Posted Nov 2, 2011 by Howard Altman

Updated Nov 2, 2011 at 10:35 PM

A couple of months ago I did a story about efforts to bring more military contracting to the area.

It’s a challenge made even more difficult by pending cuts to the defense budget that could become even bigger if the so-called congressional Super Committee doesn’t come to an agreement on reducing the deficit by Thanksgiving. That would trigger a half-trillion dollar cut in the Pentagon’s budget over a 10-year-period that comes on top of a $350 million decrease previously mandated by the White House.

At the time, I quoted DoD as saying that such a cut would bump up unemployment nationally by 1 percent.

Today the DoD – via email from spokesman George Little - explained how it came to that figure.

Here’s the process by which we arrived at the figure of a possible 1 percent bump in the national employment rate (up to 1.5 million jobs lost) if sequestration occurs.  That figure includes both DoD and defense industrial base jobs.

For the purpose of this analysis, the sequestration process was assumed to result in proportional, across-the-board spending cuts applied to DoD accounts to meet budgetary goals.

So there you have it…