Rob Varnon

CT Post

The economy has already shown some weakness of late, but imagine what it would look like if Connecticut lost 35,000 jobs and the nation 1.3 million.

That’s what a new report sees in the near future for Connecticut and other states if Congress does not act and stop a $500 billion defense budget sequestration plan to cut spending over the next decade.

On Wednesday, the Center for Security Policy with the group, For the Common Defense, provided an assessment of the planned and potential cuts on the 50 states during a forum called “Like Shooting Ourselves in the Head,” at the Reserve Officers Association in Washington, D.C.

“It’s the best title of any defense education forum we’ve ever done at the Center,” said Major General Andrew B. Davis, ROA executive director, before introducing the authors of the assessment. The group is urging voters to call their congressmen and congresswomen.

The Budget Control Act of 2011 required Congress to cut $1.2 trillion from the federal budget or have automatic cuts kick in for a decade beginning in 2013. Congress failed to adopt the Simpson-Bowles plan or come up with an alternative and now the Defense Department faces about a $500 billion reduction over the next decade, amounting to about an 18 percent reduction per year. That’s on top of a planned 9 percent reduction to spending. Concerns are growing that Congress will not address the situation before it goes into effect, saddling the presidential winner and new Congress with big problems.

U.S. Sen. Joe Lieberman, I-Conn., said it is a dire situation.

“Congress should act before the end of the year to avoid sequestration because it would result in devastating cuts to vital domestic and defense programs,” said Lieberman, a member of the Senate Armed Services Committee. “What is needed is a balanced, bipartisan plan similar to the Simpson-Bowles proposal, which would responsibly reduce the deficit and avoid a crisis that threatens our economic recovery.”

The report released Wednesday found Connecticut, home to major jet engine makers, submarine and helicopter builders, as well as manufacturers of power and heating equipment for military uses, has much to lose. Defense contractors here earned $12.5 billion in 2011. That includes money coming into headquarters operations like General Electric Co., which has defense contracts in other states.

With an 18 percent, across-the-board cut, the report expects Connecticut to lose 35,000 jobs in the first one to two years, and defense contractors might see revenue reductions of more than $2.27 billion each year over the decade.

Some small shops would close, the authors reported.

Nationally, the report said 1.3 million jobs would be lost.

California could lose 125,000 jobs with defense contractor revenues trimmed by $7.8 billion a year. New York stands to lose about 26,000 jobs, with defense contract revenues declining $1.37 billion a year, and Texas could expect a loss of more than 91,000 jobs and a $6.4 billion annual drop in defense contract revenues.

“No one is sure how it’s going to work,” Ed Deak, a Fairfield University economist said Wednesday. “You could be looking at another period of `wind-down’ in Connecticut like in the late ’80s and early ’90s.”

The state suffered a huge loss of jobs after Reagan-era defense spending ended.

Deak wouldn’t attest to the veracity of the report’s loss projections but said even half those numbers would be a problem.

“That’s still a lot in an economy that’s not growing,” he said.

Deak said one problem is the election, and he’s not sure anyone in Washington is willing to tackle the issue until they know if their side will win.

But Deak noted trends indicate businesses are making more profit than ever and at some point, they will have to start spending and hiring. That’s when things could change.

In the meantime, workers and their representatives are worried.

“We are very concerned,” said Rocco J. Calo, secretary-treasurer Teamsters Local 1150, which represents thousands of Sikorsky Aircraft workers. “If it happens it will have a major impact on our military orders and in turn our head count. We are and will continue to work very closely with our delegation. Also we are working with our International Brotherhood of Teamsters for any assistance they can provide.”

U.S. Rep. Joe Courtney, D-Conn., sits on the House Armed Services Committee and said Electric Boat workers asked the secretary of defense during a recent visit to Groton what would happen to their jobs.

Courtney was not too hopeful the situation will be addressed this year, though he said all sides are talking about the issue.

He said House Republican leadership has said they will only be in Washington for 10 days and do not expect to do any policy work until after the November election.

“The chain saw goes into effect Jan. 1,” Courtney said. “For some large employers, layoff notices could go out by late October.”

Courtney said the highway bill is also is going to expire, and that could result in the loss of 3 million jobs. The student loan issue has not been handled, and the Bush tax credits are set to expire. He doesn’t see why it makes sense to do everything after the election.

“The conventional wisdom is we’re going to deal with all these issues after the election,” Courtney said. “But under any scenario, whether (President) Obama wins or loses, the cast of characters doesn’t change in a lame duck session of Congress.”
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