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Defense Economic Director: Military Spending Important to Communities

In 2013, an economic shock wave hit many states and communities as they began to feel the full effects of the Budget Control Act of 2011, the director of the Defense Department's Office of Economic Adjustment said today.

That’s the year sequestration occurred and planes were grounded and training areas shuttered, Patrick O’Brien told an audience at the Brookings Institution here. Outside the installations, local communities that depended on defense dollars suffered, he added.

Defense Spending by State Report

To better help states and communities understand defense personnel and contract spending in their localities, O’Brien’s office has developed the “Defense Spending by State” report, which combines DOD personnel data with publicly available contracting information.

This analysis helps state and local leaders to better respond to the department’s mission, while also helping to enhance the resiliency of local economies, he said.

For example, O’Brien said, Army procurement at a tank plant in Ohio came to an end recently and the community had to figure out what to do with the workers who no longer had no work to do, he said.

In his second example, O’Brien cited the downsizing of a large Air Force installation in Grand Forks, North Dakota. The community, working with the private sector, set up an unmanned aerial system training facility that today is used by the military and the Federal Aviation Administration. “You have to make lemonade out of the lemons you’re given,” he said.

Governors Following Spending Trail

O’Brien said he met with state governors several weeks ago, who told him his report was useful to see where defense money is going, so they can better understand the supply chain and the makeup of the labor force.

Using that information, community and state leaders can think about ways to innovate, diversify and possibly retrain the labor force, he said.

Fields such as artificial intelligence and cybersecurity are going to become more important, O’Brien said. Communities need to look at these trends in new technologies and seek ways to innovate, he said, adding that such an approach is a good strategy for capturing defense dollars.

“If I’m governor or local official, I’d want to know where the spending is going, how to preserve that spending or diversify,” O’Brien said. “You’re talking about livelihoods and national security. Look at the data. Understand the data before the pink slips are issued.”

Distribution channels: Military Industry


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