WASHINGTON — A congressional panel’s failure to propose at least $1.2 trillion in federal spending cuts this week has potentially major implications for Hawaii.

The so-called super committee’s impasse triggers an automatic cuts process known as sequestration that would slash $1 trillion in defense spending over the course of a decade beginning in January 2013. About half of that amount comes from cuts that the Defense Department agreed to make with or without sequestration.

A federal report released in September shows that Hawaii received $10 billion in defense spending1 last year, the most federal defense dollars, per capita, of any state.

Hawaii also ranked first in the amount of federal dollars it gets, per capita, to pay salaries and wages last year. More than 91 percent of the $7.9 billion in Hawaii wages that the federal government paid last year were within the Defense Department, including $725 million for Hawaii civilians working in the Defense Department.

Military status 2010 Hawaii Wages
Active military $6 billion
Civilian $725 million
Inactive military $417 million

When the super committee was established in August, the automatic cuts were designed to be so severe that the panel would be compelled to seek compromise in order to avoid them.

For months, military leaders have warned that the automatic cuts would be catastrophic for the U.S. Defense Secretary Leon Panetta referred to sequestration as the “doomsday mechanism.”

Sequestration largely spares entitlement programs like Social Security and Medicare, which Hawaii’s all-Democratic congressional delegation has been vocal about protecting.

But now that automatic cuts are on the horizon, they’re warning that defense reductions could harm the state. Sen. Daniel Akaka said that while there is no question that federal spending reductions “can and must be made,” decisions about defense cuts should not be taken lightly.

“Any cuts to our defense spending — critical to securing American interests at home and abroad — should only be made after careful consideration of the risks to our security,” Akaka said in a statement.

Rep. Mazie Hirono had a similar reaction to news of the super committee’s failure, and emphasized the need for a “careful and considered approach” to defense cuts.

“Our national security depends on a strong military presence in the Pacific,” Hirono said in a statement. “For that reason, we must also ensure continued support for this critical aspect of our national defense.”

Rep. Colleen Hanabusa points out that the federal government’s defense presence in Hawaii goes far beyond security and traditional military training. She says she worries that the automatic cuts will unravel the kinds of research and development programs that help spur the local economy.

“I don’t want to see (cuts that would hamper) any research and development, the progress we’re making with energy independence, those kinds of things,” Hanabusa said in an October interview. “That’s a major cost item. We don’t think like that. We need to say, ‘Hey, what is really the fixed cost that we have, and what can we do about it?'”

Defense Department data shows that the federal government invested more than $8 million in the state’s small businesses for their work on research and development in Hawaii last year.

Of the overall defense money that flowed into Hawaii in 2010, $2.4 billion went toward military contracts, which made up more than 85 percent of federal procurement in Hawaii last year.

2010 Federal Government Contracts in Hawaii

Service branch Amount2
Navy $1 billion
Army $881 million
Air Force $217 million
Other defense $198 million
General Services Admin $148 million
U.S. Postal Service $56 million
Department of the Interior $43 million
Homeland Security $28 million
Veterans Affairs $27 million
Aeronautics and Space $20 million
Commerce $19 million
Labor $17 million
Housing, Urban Development $16 million
Agriculture $10 million
Transportation $6 million
Education $5 million
Health and Human Services $4 million
Department of Justice $3 million
Social Security Admin $1 million
State Department $1 million
Miscellaneous non-defense $1 million
Treasury $500,000
Environmental Protection $100,000
National Science Foundation $9,000

Sen. Daniel Inouye, who chairs both the Senate Appropriations Committee and that committee’s Subcommittee on Defense, has been tight-lipped following the super committee’s failure. In September, he told Civil Beat that he was “operating under the assumption” that the super committee would be successful.

“The senator was not a member of the super committee nor was he privy to the content of their negotiations,” Inouye spokesman Peter Boylan said. “Given his work with the Appropriations committee, it would be inappropriate for the senator to comment before he has the chance to confer with his colleagues who served on the committee.”

Given the implication of automatic cuts, defense spending is likely to remain a hot-button issue throughout the 2012 campaign season.

While much of the national focus in cutting defense spending remains squarely on protecting national security, Hanabusa said she worries that the other major component of the military’s mission will fall by the wayside. Such a shift has major implications for Hawaii, she said.

“For Hawaii, I think as long as people keep it in perspective: People have got to stop thinking as the military as purely a forward fighting force,” Hanabusa said. “That’s not what the military is. The military is there for, really, peace. And the way you maintain that peace is to be ahead of the game so to speak, to be aware of what’s going on, and not to be trying to catch up.”

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