Hampton Roads Defense Economy Faces Major Challenges, Lobbyist Says

Norfolk Naval Shipyard

Anyone wanting to know if Congress will provide enough money to keep stable Hampton Roads' military-centric economy is going to have to wait until after the Nov. 8 presidential election, the region's top Washington lobbyist said Thursday.

Although the new federal budget year begins Oct. 1, Congress likely will not pass a spending plan in time and will instead approve a temporary measure -- called a continuing resolution or "CR" -- to avoid a government shutdown, said John Simmons, managing partner of The Roosevelt Group.

Lawmakers are expected to begin a summer recess in mid-July and then focus on their re-election campaigns with few sessions in Washington.

"Not much is going to get decided until the lame-duck session and we know who the president is going to be," Simmons told members of the Hampton Roads Chamber of Commerce during a presentation in the Chesapeake Conference Center.

His firm is the hired lobbyist for the Hampton Roads Military and Federal Facilities Alliance, which was set up by local governments to protect the region's military assets.

At play on Capitol Hill are competing House of Representatives and Senate defense spending bills that, among other things, provide funds for shipbuilding and ship overhaul or repair work in the region. But there're disagreements over the source of the funding, particularly the House's plan to use $18 billion from an overseas warfighting account to pay for shipbuilding and other expenses. The Senate and President Barack Obama disagree.

Simmons said recent ship-repair contracts that will bring more Navy work to Hampton Road's private yards this summer and fall "may be short-lived" because it's unclear what Congress might temporarily finance in a CR, which usually authorizes less money than might be needed.

"Who knows what is coming after the election," he said.

Beyond next year, Simmons warned that the threat of automatic budget cuts, known as sequestration, will be back in late 2017, as will the likelihood of a new round of military base closings.

Virginia -- particularly its Navy facilities -- shouldn't worry about closings, he said. The Air Force is more likely to lose facilities, but Joint Base Langley-Eustis on the Peninsula isn't in jeopardy.

"We're relatively safe in the state of Virginia. You cannot close things in Hampton Roads without spending a lot of money elsewhere to move," Simmons said.

But sequestration will hurt if Congress doesn't find a way to end the automatic cuts, he said.

Sequestration began in 2013 after Congress failed to reach agreement on reducing deficit spending. It requires $1.2 trillion in across-the-board cuts over 10 years with half coming from defense and half from domestic programs.

Legislators mitigated most of the cuts the past two years with budget adjustments but have not been able to agree on a plan to stop future cuts with either new revenues or reductions elsewhere.

Simmons also acknowledged the combination of 15 years of war and the recent slowdown in military spending have led to major problems with aging equipment, lack of readiness training and a shrinking fighting force.

"We've reached rock-bottom," he said.

Looking beyond the current budget issues, Simmons told the business executives and government officials that a key growth area in defense spending will be in high-tech systems, including the development of artificial intelligence for unmanned aircraft.

"It's all about manned and unmanned teaming," he said.

"We have so few aircraft that if we have to go up against a high-value competitor we suffer tremendous losses -- 40 percent. But when you take our manned aircrafts and put them with unmanned drones swarming -- to work as pickets -- we survive with a very high rate. That future is here. They're working on it."

Virginia's state and federal leaders want to convince the Air Force to select Langley for a mission control center and launching facility for its new MQ-9 Reaper unmanned aerial vehicle wing.

The loss of U.S. Rep. Randy Forbes, a Chesapeake Republican and senior member of the House Armed Services Committee, is "a huge blow" to the region given his influence on defense programs, Simmons said. Forbes lost the June 14 GOP primary where he left his redrawn home 4th Congressional District to run in the nearby 2nd District.

However, Simmons noted there has been significant turnover among House members in the 2nd, which is home to most of the region's largest military facilities. The three-term incumbent, Rep. Scott Rigell of Virginia Beach, who did not seek re-election, is the fifth person to represent the 2nd on Capitol Hill in the last 15 years.

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