WASHINGTON — President Donald Trump’s proposed 2018 federal budget could be a boost to Maryland’s sprawling defense industry but negatively affect the state’s economy in other areas, according to analysts.
The administration’s so-called “skinny budget,” unveiled in March, seeks to increase national defense spending by $54 billion.
Almost any increase would have a ripple effect in Maryland, which ranked fourth among states in defense spending at $20.5 billion in 2015, according to a Department of Defense’s Office of Economic Adjustment study.
However, as envisioned by the White House, any increase in the defense budget would be offset by cuts to many other critical programs in the state.
“What matters for Maryland is the overall federal budget,” Benjamin Orr, executive director of the Baltimore-based Maryland Center on Economic Policy, told Capital News Service.
“Increased defense spending means cuts to many other agencies, according to Trump’s plan,” said Orr, noting that the increase would be relatively small compared to the entire defense budget.
The U.S. spent $604.5 billion on defense last year, more than the next 13 highest-spending countries combined, according to the International Institute for Strategic Studies.
Many Democratic members of Congress, including those from Maryland, have opposed Trump’s plan because of proposed cuts to the State Department, the Environmental Protection Agency, and numerous health and science agencies.
“The president’s ideas for building up our military at the expense of diplomacy and development, as well as research and development programs, will not make Americans safer,” Sen. Ben Cardin, D-Md., said in a statement to CNS. “We may need to spend more on defense, but sacrificing domestic programs to pay for more warplanes and battleships only degrade our nation economically and socially.”
Cardin also said he does not see how Trump’s budget proposal benefits Maryland.
“Maryland has a strong base of military facilities, but the work done at most Maryland military installations (is) reliant on research and development funding,” the senator said. “Increases in overall defense spending towards personnel and ship procurement would not benefit Maryland and could potentially further strain and reduce additional research and development work in our state.”
Maryland’s military industry accounted for almost 20 percent of the state’s economy in 2012, according to the most recent study by the Regional Economic Studies Institute at Towson University.
“There are about 145,000 employees on Maryland military installations, both uniformed and civilian employees,” Mike Hayes, managing director of military and federal affairs at the Maryland Department of Commerce, said in an interview with CNS.
Hayes estimated that Maryland’s defense industry contributes around $60 billion in economic output and has created more than 400,000 jobs for the state. He noted that Fort George G. Meade, the state’s largest employer, is responsible for about half of this economic impact.
“Typically, the state of Maryland is in the top five or six in defense spending nationally,” Hayes said.
However, until a defense budget is passed, Hayes said, it was “too early” to determine the potential impact on Maryland.
“I don’t think Maryland will suffer any particular losses, nor do I see any significant gains for the defense industry,” Hayes said.
Despite Trump touting his proposed defense spending increase as “historic,” Hayes noted that it did not represent a significant increase from President Barack Obama’s budget proposals.
“Trump has made sweeping statements but offered no specifics to his defense budget,” Hayes said.
The extent of the defense increase in Maryland depends on how much of Trump’s proposal, which he called “a public safety and national security budget,” survives deliberations in Congress.
Some clues may be found in the recent deal on fiscal 2017 spending, which is expected to be voted on by the House and Senate this week. The accord includes defense spending increases Trump and congressional Republicans wanted, but also includes $5 billion in new funding of numerous domestic programs that congressional Democrats secured.
The budget negotiations revealed rifts among GOP lawmakers that, according to some congressional observers, give Democrats power over future spending plans.
If a budget similar to Trump’s 2018 proposal passed, Orr said the net economic effect on Maryland would be “very bad.”
“Cuts made to the National Institutes of Health, NASA, and programs that help children and families will drastically outweigh the benefits of a small increase in defense spending,” Orr said.
While many Maryland politicians have spoken out against Trump’s budget proposal in general, there seems to be some support for increased defense spending.
Rep. Dutch Ruppersberger, D-Timonium, “supports increasing resources for our Armed Forces,” spokeswoman Jaime Lennon said in a statement.
She said the congressman thinks a spending hike is “necessary if we are going to address major gaps in troop readiness, research and development and modernization caused by years of sequestration and Band-Aid budgets.”
“Congress has already told our military leaders to grow their standing forces as we look ahead to challenges including Russia, ISIS and Iran. Now we need to provide them with the funding to do so,” Lennon said.
Rep. Andy Harris, R-Cockeysville, Ruppersberger’s colleague on the House Appropriations Committee, also supports enhancing the military.
“It is imperative that Congress provides the military with the resources it requires to keep American citizens safe…I support increased defense spending,” Harris said in a statement to CNS. “The state of Maryland is home to various government agencies and private businesses engaged in defense activities, and will benefit from increased defense spending.”
Sen. Chris Van Hollen, D-Md., supports investments in the military but doesn’t think Trump’s budget proposal adequately meets domestic needs.
“Our budgets should also address other vital national priorities like expanding economic and educational opportunities, and keeping our commitments to America’s veterans and seniors,” Van Hollen said in a statement to CNS. “Unfortunately, the Trump budget fails to reflect that balance. I look forward to working on a bipartisan basis to pass a new budget plan that addresses all our national priorities.”
While Trump has support to hike military spending, many observers think Congress will balk at the size of the increase the president envisions.
“An increase that high won’t likely pass because there will be trouble reaching a bipartisan budget,” Todd Harrison, director of defense budget analysis at the Center for Strategic and International Studies, told CNS.
“Many conservatives want to increase defense spending,” Harrison added. “Democrats want higher defense spending but refuse to make the necessary cuts to the State Department…In all likelihood, the (defense spending) increase will be much less than Trump’s proposal.”
The specific impact of a spending increase on Maryland’s defense contractors, military installations and economy will not become clear until after the 2018 budget is put into final form months from now.
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