HONOLULU - Military leaders and contractors say automatic federal spending cuts will have a snowball effect on Hawaii businesses and taxpayers.
Rear Adm. Denny Wetherald of the U.S. Pacific Fleet told Hawaii lawmakers during a hearing Wednesday that the impact of the $85 billion federal budget cuts on Hawaii's military industry will emerge gradually over the coming months.
"Instead of the analogy of falling off a (fiscal) cliff, it's more realistic to see sequestration as falling down a long, steep and bumpy hill, painfully hitting rocks along the way," said Wetherald, using the political term for the federal spending cuts enacted Friday.
Furloughs for Department of Defense employees could bring pay cuts of up to 20 percent and are expected to start in April. Maj. Gen. Darryll Wong of the Department of Defense said that under the worst-case scenario, civilian workers could lose $24 million in wages this year alone.
Wong said the department should know by the end of this week whether Hawaii's critical missions will be exempted from the cuts.
Furloughs aren't the only anticipated impact. Maj. Gen. Roger Matthews of U.S. Army Pacific said the Army plans to ground helicopters in July and limit training exercises and the availability of family programs and health care for retirees.
"The U.S. Pacific is slowing down in most everything we do," Matthews said while emphasizing that the Army won't alter its focus on the Asia-Pacific region.
Matthews and other military leaders present at the hearing told lawmakers that they are holding out hope that Congress will approve military appropriations before furloughs and other spending cuts materialize.
"But hope is not a strategy," Wetherald said. And some effects are already visible.
Ben Nakaoka of Pacific Shipyards International told lawmakers that Ship Maintenance, a military subcontractor and subsidiary of Pacific Shipyards International, had already cut 60 percent of its staff.
"Two months ago, we had a staff level of about 100 employees," Nakaoka said. "A month ago, we were down to 60. Two weeks ago, we were down to 40 employees working part time."
Alan Hayashi from BAE Systems said the military contracting company had already let go 70 employees and could furlough or terminate another 250 people.
Hawaii would be hit harder by defense cuts than any other U.S. state on a per-capita basis, said Charles Ota of the Hawaii Chamber of Commerce.
The military industry is worth $14.7 billion in Hawaii.
Ota says the Army, Navy and Air Force plan to cut spending by $500 million this year in the Pacific region in response to the federal spending cuts.