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From flow to dribble: Local economies brace for defense cuts

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With a slice here and a chop there, the folks in uniform who wield the Pentagon's budget axes have cut out large numbers of prospective jobs - and the dollars that defense spending invariably brings to a local community. In Long Island, N.Y., where the Grumman Corporation employs many workers, that may mean leaner times because of the axing of the proposed new version of the A-6F attack aircraft.

In Nevada, the local economy could be hurt because of the decision by the United States Air Force to deactivate the 474th Tactical Fighter Wing at Nellis Air Force Base. And throughout the US, defense and economic analysts say, a possible slowing in the rate of defense spending will mean slower growth for communities that depend on Pentagon largess.

So far, the defense pipeline continues to churn out dollars. The Pentagon has $260 billion in appropriated funds. But the expected dip in future spending could mean slower growth in many localities, says Robert E. Hopkins, an analyst with Salomon Brothers. According to a report prepared by Mr. Hopkins, ``future reductions in defense spending will, by necessity, be unequally distributed among the states, resulting in a cooling in economic growth rates in many of the rapidly expanding states.''

The Reagan administration has proposed defense spending authority of $299.5 billion for fiscal year 1989 beginning Oct. 1. This is up slightly from the $291 billion for the current fiscal year. But considering that not long ago the administration was talking about an increase in the $30 billion range, that's mixed news for the hundreds of communities around the US dependent on military spending.

The rate of increase in defense spending authority, which includes spending in future years, has been declining since 1986, according to one Pentagon analyst. But actual spending, that is, dollars going into the defense pipeline on a current basis, has not been slowing, he notes.


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