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Cuts In Department of Defense Spending Could Hit San Diego’s Economy

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San Diego’s economy could take a hit from major federal defense spending cuts announced by Secretary of Defense Robert Gates. Studies show San Diego is one of the biggest recipients of DOD money in the nation.

San Diego’s economy could take a hit from major Federal defense spending cuts announced by Secretary of Defense, Robert Gates. Gates says he wants to cut $100 billion over the next five years, and reduce defense contracts by ten per cent.

Studies show San Diego is one of the biggest recipients of DOD money in the nation. Kelly Cunningham of National University’s Institute for Policy Research says some counties have a high number of active duty military and some have many big defense contractors, but San Diego has both.

A study by San Diego’s Military Advisory Council shows DOD spending in San Diego has risen from $11 to $17 billion in the last six years.

Cunningham says big military construction projects are ongoing in San Diego, but future cuts to defense contracts will affect high paying jobs.

“We’re still seeing military spending coming to San Diego for the next few years, and hopefully when we start to see a draw back in military spending, our economy otherwise has picked up enough and will continue growing,” he says. “But undoubtedly this will be a blow to our overall economy.”

Cunningham has covered the boom, bust cycle of military spending in San Diego over a century. He says during the recession, military spending has indirectly supported almost a quarter of San Diego’s jobs. But he says San Diego is less dependent on defense spending than it was in the 1950s when half of the region’s jobs were military related.

He hopes the impact of reduced military spending will not hit the community as hard as the manufacturing cut backs in the early 1990s, which devastated San Diego's economy.

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