Will New Military Budget Prolong Recession?

None of those communities would be happy if the Pentagon scraps the program, as Gates proposed.

"It is unacceptable that this administration wants to eliminate 2,000 jobs in Marietta and potentially 95,000 jobs nationwide at a time when unemployment rates are rising across the country," Sen. Johnny Isakson, R-Ga., said in response to the announcement.

But not all of the news is bad for Georgia. While he may want to end the F-22, Gates also wants to ramp up production of the F-35 Joint Strike Fighter.

That plane is also assembled in Georgia.

And people in Forth Worth, Texas, could gain as many as 10,000 workers in the long term, also for assembling the F-35.

St. Louis looks like it got hit hard with Gates' announcement that it would no longer buy any more Boeing C-17 transport planes. About 1,800 people in the area work on the C-17 and another 4,000 work on the F/A-18s.

But the C-17's biggest victim might be Long Beach, Calif. where its demise could cost the area about 5,000 jobs.

Gates also announced that plans to build a new helicopter for the president and a helicopter to rescue downed pilots would be canceled. A new communications satellite would be scrapped and the program for a new Air Force transport plane would end.

Wall Street also liked the changes, in part because they weren't as deep and drastic as investors had feared. Many defense stocks jumped Monday even as the overall market fell. Shares of Lockheed Martin and Northrop Grumman each rose nearly 9 percent.

Growing Defense Budget

Todd Harrison, fellow of defense budget studies at the Center for Strategic and Budgetary Assessments, noted that the overall defense budget is not a cut.

"It's actually growing by 4 percent over last year's," Harrison said.

In fact, defense spending accounts for roughly one out of every five tax dollars spent by the federal government. This budget won't reduce that at all.

Harrison said the real factor is deciding which programs -- and, therefore, which communities -- get hit is going to be Congress. Like everything else, some districts will suffer and some will gain. The question remains, which politician is more powerful.

"There are really some tough decisions that have been put off for a while and Secretary Gates was really cleaning up some loose ends," Harrison said. "I think he's sending a really strong message that poor-performing programs are going to be held accountable and that spending is not unlimited. Politically, it looks like the White House has put a lot of confidence in him and the question is whether or not Congress is going to back him up."

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