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Defense Contractors Brace For Military Spending Cuts

— Looming defense cuts are casting a long shadow over the biggest defense contracting conference on the West Coast. Nearly every session, discussion and panel at West 2013 has something to do with potential defense department cutbacks.

Hundreds of military contractors are gathered in San Diego for the largest trade show of its kind on the West Coast.

Photo by Erik Anderson

Budget cutters could trim up to $9 billion from the Pentagon budget this year alone. In 2011, the defense budget was $530 billion.

Some observers say the defense cutbacks are part of a new reality that will continue well beyond this year. One speaker at a panel discussing the current situation said the defense department will shrink.

"Everything that looks essential, or everything that looks like it can be delayed, will be declared non-essential and will be delayed," said Kori Schake, a fellow at Stanford University's Hoover Institute. She studies military policy and defense strategy.

"And so, businesses making the case that what we do is actually essential to what the department needs to successfully do, I think is the best approach to it," said Shalke.

Companies that can be flexible and market products outside the defense industry will have the best shot at survival, according to Shalke.

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