The Economic Impact of Sequestration on Civil Space ProgramsDECEMBER 2012

Select cover photos courtesy of NASA - James Webb Space Telescope & Orion MPCV

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The Economic Impact of Sequestration on Civil Space Programs

Space: An Investment in Innovation and Competitiveness

For more than five decades, U.S. civil space programs have been an inspiring success story of “can-do” American ingenuity. The space sector has bred a culture of innovation and discovery across the nation, seeding our economy with world-class scientists, engineers and mathematicians. For just a fraction of one percent of the federal budget, NASA leads the world in space science and exploration, while growing the best kind of high-skilled jobs that are fundamental to our national competitiveness. Similarly, for a negligible per capita cost, NOAA provides vital space-based observation data for life-saving weather predictions used by the public and private sectors.

Since the dawn of the Space Age, the technical workforce brought into being by NASA, NOAA and the U.S. space industry has steadily produced cutting-edge advances that keep our nation second to none. Even today, astronauts on the International Space Station are researching vaccines and medicines in a unique microgravity lab. NASA Earth observation satellites help reveal how our planet works. Robotic space missions like the Hubble Space Telescope are shedding light on the most basic laws of nature. NOAA’s search and rescue satellite system saves hundreds of lives each year. Unequivocally, U.S. space programs are making direct and lasting contributions to national needs.1 Maintaining our World Leadership in Space

As globally recognized brands, NASA and NOAA demonstrate American innovation, expertise and technical mastery – qualities that have attracted the best and brightest from our own country, to say nothing of those students around the world who seek to study in the United States. Maintaining our leadership in space requires a commitment to making sufficient investments. The countless benefits from today’s space program have resulted from past support of innovative space capabilities. Today, America’s space industry is building new foundational capabilities to advance our legacy of exploration and science even further. Impressive and exciting space systems are currently being developed across NASA that will maintain U.S. world leadership in space and grow national capabilities for the benefit of us all. NOAA and NASA are also hard at work developing next generation weather satellites. These satellites must be kept on schedule to maintain and improve current weather forecasting abilities for our nation’s safety and economy.

A Devastating Threat to our Space Leadership

Collectively, the space capabilities currently under development promise amazing future benefits, but bringing these new systems online takes steadfast commitment.

With NASA at best facing a flat budget for the foreseeable future, several programs were planning to prudently reuse hardware left over from the Space Shuttle, Curiosity Rover and existing infrastructure –

1 Space in our World. November 2012. AIA Report. Retrieved from http://www.aia-aerospace.org/assets/AIA_Space_in_our_World_Web_Copy.pdf

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some of which dates back to the moon landing era. NASA and its supporting industry partners are meeting the call to reduce costs while delivering ground breaking capabilities never before seen. Likewise, NOAA has reconfigured its budget priorities across the organization and streamlined system requirements to expedite the development of critical weather satellites.

Despite the implementation of cost-saving strategies and the re-ordering of budget priorities, a minimum basic investment is still needed to make these systems a reality, rather than the arbitrary and irresponsible budget cut from sequestration that looms on the horizon for both NASA and NOAA.

Sequestration budget cuts mandated by the Budget Control Act of 2011 (BCA) are the single greatest threat to our space programs’ continued success. Sequestration is set to initiate a cut of $1 trillion across DOD and non-DOD programs (including NASA and NOAA) over nine years starting on January 2, 2013. If sequestration were to go into effect, NASA and NOAA would experience an 8.2 percent cut across each agency’s budget for fiscal 2013 and further cuts over the next eight years. Such a deep and reckless cut to these agencies would senselessly jeopardize U.S. space leadership and stifle exactly the kind of investment in innovation that our economy needs. Once these capabilities and jobs are lost, it could take decades to recover them – and may cost more than is saved in the near term.

NASA Sequestration Impacts across the United States

In a July 2012 AIA report on the effects of the BCA on federal agencies, George Mason University economist Dr. Stephen Fuller estimated that sequestration will put at risk 2.14 million jobs in 2013 alone.2 In the case of NASA, an 8.2 percent cut to the agency’s budget would amount to a loss of more than 20,500 jobs in 2013 – and all of these lost jobs would be from the private sector, since the NASA Authorization Act of 2010 prohibits any cuts to the civil servant work force through fiscal 2013.

The loss of these jobs would be significant – to a large extent, these are the scientists, engineers and technicians that design, manufacture and operate our nation’s spacecraft and launch systems. In short, these are the best high-skilled jobs our economy has to offer. Such a dramatic collapse in our technical workforce could lead to a major loss in current national capability. It could also impact the willingness of young people to pursue these disciplines, further eroding the already fragile flow of top talent into the industrial workforce pipeline.

A NASA sequestration would also deal major damage to those regions with high concentrations of aerospace activity around the country, better known as industry clusters. Many space companies directly support NASA missions by designing and building spacecraft and frequently co-locate with NASA centers. Other companies that support NASA are significant economic drivers in other key aerospace clusters that have no NASA center. The importance of maintaining these clusters cannot be overstated. Clusters have been shown to promote economic efficiencies and specialization; encourage innovation

2 Fuller, Stephen S., The Economic Impact of the Budget Control Act of 2011 on DOD and Non-DOD Agencies. July 17, 2012. Retrieved from http://www.aia- aerospace.org/assets//Fuller_II_Final_Report.pdf

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and entrepreneurship; and drive prosperity for entire regions.3 Sequestration cuts would result in far reaching and lasting losses for major aerospace clusters beyond the space industry. The following appendix tables outline several key space clusters around the country that stand to experience crippling losses from sequestration.

NOAA Sequestration Impacts across the Nation

In the case of NOAA’s weather satellite programs, an 8.2 percent cut to the agency’s budget would result in the loss of more than 2,500 jobs in 2013 – 1,000 of which design, build and operate weather satellites that have no equivalent or redundant system in the public or private sector. To irresponsibly shed this expertise is to risk the quality of weather forecasts in the near term. Moreover, the 8.2 percent cut would result in the loss of more than $154 million to an already extremely tight, developmental budget for the replacement weather satellites, threatening to extend a gap in polar-orbiting weather satellite coverage expected to begin in 2017. The importance of maintaining satellite vigilance of weather phenomena cannot be overemphasized. A recent study estimated that in 2008, nearly a half trillion dollars of the U.S. gross domestic product was impacted by weather variability. Moreover, 90 percent of all observation data used in three- to seven-day weather forecasts is acquired by satellites.4,5

This photograph of Hurricane Sandy was taken from NOAA’s Suomi NPP weather satellite, which provided critical observation data that alerted the East Coast of the United States to the massive storm.

3 Aerospace Industry Report 2012, Chapter 10, Topics to Watch in 2012 and Beyond, AIA Publication. 4 Lazo, Jeffrey K., et al. U.S. Economic Sensitivity to Weather Variability, December 28, 2010 [Cited: July 18, 2012]. Retrieved from http://www.sip.ucar.edu/publications/PDF/Lazo_sensitivity_June_2011.pdf 5 Sullivan, Kathryn. Written Statement by Dr. Kathryn Sullivan. June 27, 2012. [Cited: October 26, 2012]. Retrieved from http://www.legislative.noaa.gov/Testimony/Sullivan062712.pdf

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State Impacts of NASA Procurement Spending Reductions under the Budget Control Act of 2011

Fiscal Year 2013 (Dollars in thousands, jobs are actual number)

The eleven states examined in this table account for 91.8 percent of NASA procurement funding.

State

Direct

Impact Total

Output* Labor

Income

Job Loss

Texas $320,171 $751,121 $272,799 5,610 California 293,443 699,393 215,676 4,586 Colorado 125,582 291,741 107,301 2,121 Maryland 127,282 238,974 78,022 1,520 Alabama 75,870 153,693 56,661 1,369 Florida 72,100 158,942 59,563 1,366 Utah 47,213 106,768 39,411 963 Virginia 52,524 108,626 37,052 713 Ohio 26,871 53,952 18,578 429 Mississippi 25,990 43,583 15,215 374 Louisiana 24,826 44,415 15,865 359

State Totals $1,191,874 $2,651,209 $916,144 19,410

Source: George Mason University Center for Regional Analysis. *Reduction from Gross State Product.

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National Impact of NASA Procurement Spending Reductions under the Budget Control Act of 2011

Fiscal Year 2013

(Dollars in thousands, jobs are actual number)

Nationwide

Direct Impact

Total Output*

Labor

Income Job Loss

Totals $1,298,190 $2,843,651

$1,018,358 20,682

Source: George Mason University Center for Regional Analysis. *Reduction from Gross Domestic Product.

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Cluster Impacts of NASA Procurement Spending Reductions under the Budget Control Act of 2011

Fiscal Year 2013

(Dollars in thousands, jobs are actual number)

State NASA Center GSP Loss* Job Loss Texas

Johnson Space Center (Houston)

$751,121

5,610

*Reduction from Gross State Product.

For over fifty years, the Johnson Space Center (JSC) has been at the heart of spacecraft design, operations and testing for human spaceflight. As the home of Mission Control, JSC currently leads the operation of the International Space Station (ISS), the premier scientific platform for world-class research in space. The ISS is also the anchor tenant for growing new commercial space transportation systems that hold the potential to open new markets in space.

State NASA Center GSP Loss* Job Loss California

Ames Research Center (Silicon Valley) Dryden Flight Research Facility (Edwards Air Force Base) Jet Propulsion Lab (Pasadena)

$699,393

4,586

*Reduction from Gross State Product.

The Ames Research Center leads research in a number of cutting edge scientific fields including astrobiology and extra-solar planets. Ames researchers also frequently collaborate with the FAA to study air traffic management, to make it faster, cheaper and more efficient. The Dryden Flight Research Facility is home to a host of flight development research programs that have advanced numerous space programs including the Orion Launch Abort System, the NASA Stratospheric Observatory for Infrared Astronomy, and the Space Shuttle. The Jet Propulsion Lab (JPL) has a long and proud history of robotic space science missions. The enormously successful Mars Rovers – most recently the Curiosity Mars

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Science Lab – were designed and developed at JPL. To date, no other nation has successfully landed a mission on the Martian surface.

State NASA Center GSP Loss* Job Loss Colorado

None (State-wide)

$291,741

2,121

*Reduction from Gross State Product.

Although there are no NASA centers in Colorado, its importance to our nation’s civil space programs cannot be overstated. Within Colorado, development and manufacture of the Orion Multi-Purpose Crew Vehicle is well underway and the first Orion test vehicle has been shipped to Kennedy Space Center for its test flight in 2014. Additionally, a crew vehicle is being designed and developed in Louisville, Colorado with the intent of serving the Commercial Crew Program. This vehicle has already undergone a capture and carry test flight in 2012.

State NASA Center GSP Loss* Job Loss Maryland

Goddard Space Flight Center (Greenbelt)

$238,974

1,520

*Reduction from Gross State Product.

Numerous Earth sciences, astrophysics, heliophysics and the solar system missions are spearheaded by the Goddard Spaceflight Center, including the primary integration of the legacy successor to the Hubble Space Telescope, the James Webb Space Telescope. Within the Earth Observing System, NASA Goddard is responsible for the operation of the nation’s current constellation of Earth observation satellites that gather long-term data on the land, atmosphere and oceans.

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State NASA Center GSP Loss* Job Loss Alabama

Marshall Space Flight Center (Huntsville)

$153,693

1,369

*Reduction from Gross State Product.

Marshall Space Flight Center (MSFC) has a storied history in American rocket propulsion development. Today, Marshall is leading development of the Space Launch System (SLS), the new heavy-lift rocket for exploration beyond Earth’s orbit - a foundational capability for the entire space program in the decades to come. MSFC is part of an aerospace cluster in the Huntsville area that includes a number of defense-related organizations that will also be impacted by the DOD sequestration cut of 9.4 percent 6. These facilities include the Redstone Arsenal, the Missile Defense Agency, and a private facility in nearby Decatur, which produces the U.S. Atlas 5 and Delta IV launch vehicles.

State NASA Center GSP Loss* Job Loss Florida

Kennedy Space Center (Space Coast)

$158,942

1,366

*Reduction from Gross State Product.

Florida’s Space Coast is home to the Kennedy Space Center (KSC) and one of the premier space launch centers in the country. Key investments are being made to outfit KSC for launching both civil and commercial space launch vehicles, as part of a “21st Century Launch Complex” infrastructure upgrade. KSC will be responsible for integrating Orion to the SLS and launching crews to new destinations beyond Earth’s orbit.

6 Fuller, Stephen S., The U.S. Economic Impact of Approved and Projected DOD Spending Reductions on Equipment in 2013. Retrieved from http://secondtonone.org/wp-content/uploads/2012/05/AIA-Impact-Analysis-plus-State-Impacts1.pdf

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State NASA Center GSP Loss* Job Loss Utah

None (State-wide)

$106,768

963

*Reduction from Gross State Product.

Although Utah has no NASA center, it is host to significant solid rocket motor development. Building on its Space Shuttle solid rocket motor heritage, work in Utah is being done to compete and develop solid rocket propulsion for NASA’s new heavy-lift vehicle, the Space Launch System. Solid rocket motors are also used on other space launch vehicles, such as the U.S. Air Force Evolved Expendable Launch Vehicle, which will also be impacted by the DOD sequestration cut of 9.4 percent.

State NASA Center GSP Loss* Job Loss Virginia

Langley Research Center (Hampton, VA) Wallops Flight Facility (Eastern Shore of Virginia)

$108,626

713

*Reduction from Gross State Product.

The Langley Research Center was the first aerodynamics research laboratory in the United States. Today, Langley is the home to important flight research on the Orion capsule among other programs. Langley has been an integral contributor to Orion’s heat shield design, development and testing, as well its landing system. The Wallops Flight Facility officially operates as part of the Goddard Flight Facility. Activity at Wallops has ramped up significantly in recent months, as the center prepares to begin launching crucial commercial cargo re-supply missions to the International Space Station. The state has also invested to develop the Mid-Atlantic Regional Spaceport in hopes of growing this region economically – a hope that may be dashed by sequestration.

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State NASA Center GSP Loss* Job Loss Ohio

Glenn Research Center (Cleveland)

$53,952

429

*Reduction from Gross State Product.

The Glenn Research Center has performed significant work in aeronautics recently, particularly in the area of jet engines. Notably, this included important research that led to the development of the chevrons on commercial jet engines – an innovation that has considerably reduced the noise of commercial airliners.

State NASA Center GSP Loss* Job Loss Mississippi

Stennis Space Center (Hancock County)

$43,583

374

*Reduction from Gross State Product.

During the Apollo program there was a saying that “if you wanted to go to the Moon, you had to go through Hancock County, Mississippi.” That’s because all major rocket propulsion testing in that era occurred at test stands located at the Stennis Space Center. Today, Stennis is building upon this history by conducting essential rocket engine tests for NASA’s new heavy-lift vehicle, the Space Launch System. Stennis has already set new records for duration in rocket engine testing as it helps prepare SLS for flight. Stennis is also host to a number of other U.S. government agencies, which will also be impacted by sequestration, adding to the impact of the job losses shown here in the local community.

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State NASA Center GSP Loss* Job Loss Louisiana

Michoud Assembly Facility (New Orleans)

$44,415

359

*Reduction from Gross State Product.

Louisiana’s Michoud Assembly Facility is run by the Marshall Space Flight Center and previously served as the primary manufacturing facility for the Space Shuttle’s external tank. Today, Michoud is gearing up to construct major elements of NASA’s new heavy-lift rocket, the Space Launch System.

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National Impact of NOAA Procurement Spending Reductions under the Budget Control Act of 2011

Fiscal Year 2013

(Dollars in thousands, jobs are actual number)

Nationwide

Direct Impact

Total Output*

Labor Income

Job Loss

Totals $154,700 $355,285 $117,824 2,503

Source: George Mason University Center for Regional Analysis. *Reduction from Gross Domestic Product.

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Photo courtesy of NASA

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