Transcript: Northrop Grumman CEO Wes Bush’s remarks on the impacts of sequestration
Partial transcript of remarks by Wes Bush, Chairman of Aerospace Industries Association and Chairman, Chief Executive Officer and President of Northrop Grumman Corporation, on the negative impacts of sequestration. The press briefing was held on Feb. 11, 2013.
…As we think about sequestration, this is really a decision. It’s a decision that our nation’s political leadership needs to make and the timeline is rapidly approaching for the conclusion of that decision. I thought it would be helpful to frame the decision space in the context of the broader U.S. economic model.
Our economic model in the United States works best when we have all of the pieces of that model working together. And the premise of our model is that there are certain roles that are best performed by companies such as ours; there are certain roles best performed by government; there are certain roles – very critical roles – played by other enterprises in our society, such as educational institutions, non-profit organizations, and many other enterprises.
Central, though, to that model – central to the functioning of our economy – is investment by the federal government in some key areas, such as providing for our national security, supporting education, and supporting research that fuels the innovation that our economy needs for our long-term growth. Supporting and providing for the public safety and for public health. There are many roles – we can take a long time and enumerate them all – these are all critical functions of government.
The funding for these core functions of our federal government is provided by the discretionary component of the federal budget. And while total federal spending represents about 23% of our Gross Domestic Product (GDP), the discretionary component of spending is only about 8% of GDP. The remaining components of federal spending are entitlements, representing about 14% of GDP, and interest payments on the debt, which are about 1.4%.
If we look at discretionary spending as a percentage of GDP over time…we already are on a track to be at the lowest point of discretionary spending in relation to our national economy in 50 years. This drastic change is happening already without sequestration…Already, we are slowly backing away from the long-term investments in our security, our research, our education, our infrastructure, our public health, our public safety, and many other core functions of government.
Now, that level of decline cannot be sustained is America is to be a global leader for the long-term…Trying to solve our country’s very serious fiscal challenges – and we all know they are very serious challenges – but trying to solve those issues solely on the back of the discretionary budget is the wrong answer for America.
We need our Congress and the administration to work together to create a balanced approach to reducing our long-term debt.
Now, will the discretionary budget play a role in that solution. Of course it will. But allowing the sequester to occur is absolutely the wrong way to go about this and it would produce severe economic consequences in both the near-term and the long-term.
The loss of jobs as our country struggles to recover from a devastating recession would be a real setback for our economy.
The loss of small businesses across America would drain us not only of their employment and their economic contributions but also their innovation and their growth potential.
The impact – the very real impact – on university research and student aid would haunt us for many, many years.
And the impacts on our public health and safety are simply unacceptable.
…We’re here to call for our political leadership to come together to act to stop sequestration and to come up with a solution that will continue to help America grow for many, many years.
- WhatTheFolly.com: Transcript: Press briefing remarks by Hunter Rawlings on the impacts of sequestration on federally-funded research & innovations
- WhatTheFolly.com: Transcript: Northrop Grumman CEO Wes Bush’s remarks on the impacts of sequestration
- WhatTheFolly.com: Transcript: Press briefing remarks by Marion Blakey on the impacts of sequestration on the aerospace industries
- WhatTheFolly.com: Transcript: Press briefing remarks by Peter McPherson on the impacts of sequestration on research at universities
- WhatTheFolly.com: Transcript: Press briefing remarks by Emily Holubowich of NDD United on the impacts of sequestration
- WhatTheFolly.com: Transcript: Press briefing Q&A on impacts of sequestration on non-defense discretionary funding
- Aerospace Industries Association: Media Advisory: Thousands of Organizations Unite to Protect America’s Economy and Innovation Leaders
- Aerospace Industries Association: The Economic Impact of Sequestration on Civil Space Programs (PDF)
- C-Span.org: Video of the NDD United, Aerospace Industries Association, and Task Force for American Innovation press conference on sequestration on Feb. 11, 2013
- WhatTheFolly.com: 5 key facts about sequestration
- WhatTheFolly.com: Analysis: Impact of sequestration on non-defense discretionary spending