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End the specter of sequester for DoD budget

This month, the Pentagon released its fiscal year 2017 budget proposal — a document with profound implications for the Department of Defense's fight against global terrorism, the deterrence of emerging and re-emerging threats in Asia and Eastern Europe, and for the well-being of a defense-dependent Maryland economy.

Without question, the foundation of the FY17 budget is a welcome improvement over recent budgets that were produced under the constraints of the budget caps known as legislative sequester. It is now time for our elected officials to once and for all end the specter of sequester funding for the DoD.

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Such shortsightedness not only ties the hands of our nation's military leaders as they project power abroad, it creates uncertainty for the defense industrial base at home. Thousands of Maryland businesses provide contract support to the U.S. Armed Forces, and regular order in the budgeting process affords them with the confidence to make informed investment decisions regarding labor, manufacturing and capital infrastructure.

According to a 2015 study by Towson University's Regional Economic Studies Institute, military installations supported 410,219 jobs and contributed $57.4 billion — or 17 percent — of total economic output in the state in FY12, the most recent year in which data could be analyzed. What's more, the 2005 iteration of Base Realignment and Closure (BRAC) brought a significant influx of high paying defense contracting and federal jobs to Maryland that will remain here for the foreseeable future. Maryland legislators would be wise to create a business environment that allows the Free State's defense industrial base to remain a permanent catalyst for robust economic growth.

The FY17 budget requests $582.7 billion in total spending, an increase of 0.4 percent from the year prior and a top line reduction of 16 percent since spending peaked in 2010. Given the stabilization of the U.S. economy and annualized budget deficits since 2010, the FY17 DoD budget projects defense spending to increase steadily through 2021 to keep pace with inflation and assure military overmatch with our adversaries. However, U.S. military spending when measured as a percentage of the total goods produced and services provided in the country each year is at its lowest level in recent history. Even with the slight uptick in spending in the FY17 budget, the U.S. ranks just ninth in the world in defense spending as a percentage of its Gross Domestic Product (GDP), according to current data from the Central Intelligence Agency.

Still, the budget proposal is an ode to a world that has become increasingly dangerous with state and non-state actors challenging the United States on every front. It aspires to rise to the geopolitical challenges of the 21st century and significantly reduce expenditures across the DoD enterprise. This is evident in the increased spending in missile defense, space-based systems, and cyber defense juxtaposed with important reforms of military health care, retirement and family programs and the weapons acquisition process to ensure budget solvency in the years ahead.

As always, DoD must be postured to win decisively in any conflict, and it must stand ready to rise to the challenge of an increasingly multi-polar, global order. While fiscal realities demand that hard choices be made regarding excess infrastructure, health programs and the defense acquisition process, legislators must tread carefully when attempting to achieve cost avoidance.

Moving forward, Congress should embrace the core tenets of the FY17 DoD budget and look for areas where battlefield capability and force readiness can be further enhanced while providing clear signals to Maryland's defense industry that it is committed to fully funding the DoD and ending any future possibility of sequester.

Given Maryland's proximity to so many of this country's military and civilian defense installations and agencies, the state's defense contracting industry has a unique opportunity to play a central role in the success of this United States' collective national defense for generations to come.

Cognizant of this state's competitive advantages in defense, Maryland legislators should build on the DOD's FY17 budget request by seeking additional measures that enable our military to protect the homeland and advance vital U.S. interests abroad while creating the conditions necessary for the region's industrial base to contribute to economic growth in Maryland.

John Karabias is manager of strategy and corporate development at Engility Corporation at Aberdeen Proving Grounds. He is also co-founder of the Emerging Business Leaders at APG. He can be reached at john.karabias@engilitycorp.com.

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