Defense Economic Adjustment Act

Defense Economic Adjustment Act - States the purpose of this Act to be to provide advance planning for effective conversion of defense-related industries to productive civilian activity and to provide economic adjustment assistance to affected communities, industries, and workers which may be substantially and seriously affected by reductions in defense expenditures.

Title I: Defense Economic Adjustment Council - Establishes a Defense Economic Adjustment Council in the Executive Office of the President, membership to include Cabinet officers, representatives of business-management community, and representatives of labor union organizations.

Defines the duties of the Council, including: (1) encouraging preparation of plans for civilian-oriented public projects; (2) supervising the establishment of a Job Information Bank in the Department of Labor to coordinate State, local and Federal employment services; (3) preparing lists of organizations and consultants engaged in civilian-oriented activity for use by local conversion committees; and (4) preparing and distributing a Conversion Guidelines Handbook.

Title II: Alternative Use Committees - Establishes local Alternative Use Committees to undertake economic conversion planning and preparation in the event of reductions in defense spending resulting in substantial and serious unemployment. Provides a fund for performing these duties to be derived from the military contract or base operating costs.

Title III: Economic Adjustment Fund - Provides for establishment in the Treasury of a Workers Economic Adjustment Reserve Trust Fund.

Requires defense contractors to pay to the Fund an amount equal to one and a quarter percent per year of their gross revenue.

Title IV: Economic Adjustment Assistance for Workers - Requires that all displacements in defense related facilities affecting more than five percent of the workers be reported to the State employment office or agency acting as Agent for administration of employees' benefits programs.

Provides eligible workers with two year entitlement to the following applicable benefits: (1) compensation on a weekly basis to maintain an income equal to 90 percent of the first $20,000 per year and 50 percent of the next $5,000 in excess of $20,000; (2) vested pension credit; (3) maintenance of hospital, surgical, medical, disability, and life insurance coverage; (4) retraining for civilian work; and (5) necessary relocation expenses. Requires all managerial and technical employees who have spent more than 50 percent of the ten years preceding implementation of the plan to participate in a professional retraining program in order to be eligible for benefits.

Authorizes the Council to reimburse a State or administering agency (acting as agent of the Council) for all benefits paid.

Title V: Use of Certain Research Funds - Amends the Defense Authorization Act of 1970 to expand kinds of independent research and development which can be funded in a defense contract to include projects which the Council believes have a potential relationship to an urgent national requirement in a designated non-defense sector.

Title VI: Authorization of Appropriations - Authorizes the appropriation of sums which may be necessary to carry out provisions of this Act.