Though many on Guam had looked for passage of the spending authorization to resolve outstanding war claims, which were subsequently sacked by Republican members of the Armed Services Committee, the nearly $700 billion defense budget still contains much good news for Guam.
The report is expected to be debated further in the U.S. Senate and the House before arriving on President Obama’s desk for his approval.
The $680 billion measure doesn’t actually fund the Pentagon’s budget but provides policy guidance that is typically followed closely by the appropriations committees.
The island can expect to continue seeing a considerable portion of the billions allocated for oversea defense spending as military realignment construction projects get underway for a massive troop transfer from Okinawa, Japan to Guam.
Over $700 million in military construction work is planned for this fiscal year, more than twice the amount spent in 2008.
The spending authorization also includes a 3.4 percent pay increase for the military that was a half-percentage point more than Obama requested.
Moreover, the bill would provide for significant military construction spending to support the massive troop realignment on island.
Projects
The conference committee fully authorized several projects on Guam, including a new $446 million navy hospital; Apra Harbor wharf improvements costing $167 million; Andersen AFB North Ramp infrastructure improvements at $183 million and Andersen AFB North Ramp utility improvements at another $101 million.
But the biggest impact of the spending bill remains to be seen as the bulk of these big contracts have gone to off-island companies. Local leaders have cautiously noted that local businesses are failing to participate in the military largesse as primary contractors.
With the war reparations dismissed for further discussion next year, the wage act neutralized and eight and nine digit contracts going to companies from off-island, the $734 million authorized for military construction projects on Guam has yet to trickle down into the average household.
Not too fast
Any real benefits from the 2010 defense spending bill are not expected to be realized for most households on Guam until late next year and early 2011 after contracts and subcontracts are awarded in the realignment process.According to the Guam Department of Labor, the average income on Guam is about $28,000 a year, while the island’s cost of living is higher than that of most U.S. cities, including the nation’s capital. Half of the island’s population earns below $10 an hour, and about one-fourth of the population is on food stamps.
Local workers will still get prevailing wage rates set for Guam, which are low, though many in the community are hyping the dismissal of Abercrombie proposals as a victory.
Local contractors can be expected to benefit as subcontractors to these firms and have historically depended on their ability to use temporary foreign workers - primarily from the Philippines - who live in barracks provided by contractors and then return home when the job is done, often shortchanged and swindled.
On Guam there is no union for construction workers, nor is there a system of unemployment to assist local workers during dry spells - both factors in a persistent shortage of construction workers in the territory.
Hiccups
Gary Hiles, economist for Guam's Department of Labor told a national news organization that he believed initially there would have been “hiccups†in the local economy had the amendments passed. But he agreed there were advantages to hiring U.S. workers over foreign laborers to do the work on U.S. bases.
Paying higher wages would bolster the local economy, he said, more so than hiring foreign workers who typically send much of their earnings out of the country. Hiles also admitted that additional tax revenue generated would assist badly needed infrastructure upgrades on island.
Buying and renting cars, apartments, dining out and shopping at local malls and theaters as well as a wide variety of things that foreign workers in barracks don’t do would have contributed to Guam’s economy in a manner much more relative to the local government’s coffers.
