Budget Ax Hangs Over New England's Pentagon Pie
By Christopher Anderson and Elliot Ginsberg
The Hartford Courant
August 27, 2012
Regardless of the outcome of this November's election, the next president will immediately face a significant fiscal crisis that he will be powerless to stop without congressional intervention. If the House and Senate cannot develop a new budget reduction deal by December, the so-called "sequestration" cuts — the mandated, across-the-board reductions put in place by last summer's debt ceiling agreement — will kick in, indiscriminately slashing federal spending.
The Department of Defense, a major contributor to Connecticut's advanced manufacturing and technology sectors, will face up to $600 billion in automatic cuts. That is on top of the nearly half-trillion dollars in reductions already approved by the Pentagon in 2011, which means a total of more than $1 trillion in military and homeland security reductions are possible.
Defense Secretary Leon Panetta said these additional cuts will guarantee "that we will hollow out the force" and jeopardize our ability to "maintain the best military in the world." A drastically reduced defense budget would have detrimental results for Connecticut and the rest of the region, which relies heavily on military spending to boost our advanced manufacturing and other high-tech sectors.
According to a University of Massachusetts study released in June by the Defense Technology Initiative, a New England-wide business and academic coalition promoting growth in defense technologies, Connecticut's defense-related entities earned nearly $12.7 billion from defense and homeland security contracts in 2011, providing 101,000 statewide jobs and $7.9 billion in wages.
The Naval Submarine Base and Theater Aviation Sustainment Maintenance Group in Groton, the Army Aviation Support Facility in Windsor Locks, and the Air National Guard in East Granby, among other facilities, are indispensable to their local economies. Many related small businesses rely on funding for these facilities. In a state recognized for its innovation and manufacturing prowess, the defense industry serves as a critical catalyst — more than 1,100 Connecticut companies receive defense and homeland security funding.
Yet if Congress does not act to prevent the January sequestration cuts, Connecticut could lose more than 34,000 jobs in 2013 alone, according to a recent study by the George Mason University Center for Regional Analysis. Beyond the hit families would take to their pocketbooks and livelihoods, our national defense would be severely weakened, as the Pentagon would have trouble getting the advanced equipment needed for the Navy's 14th Virginia-class Submarine, SSN-787, and the Sikorsky Black Hawk helicopters, both produced in the state.
Even if Congress acts before sequestration kicks in, we know defense cuts are on the way. Already, larger states and regions are organizing to preserve whatever is left of the pie. Connecticut — and its political and business sectors — cannot confront this challenge alone. Instead, we must leverage our six-state region's political and economic clout to create a unified set of strategies to preserve and grow the regional defense economy. The Defense Technology Initiative study showed the New England region — the premier defense technology region in the nation — received $34 billion in 2011 contracts, spending that helped employ more than 319,000 residents and generated $22.6 billion in wages across the six-state region.
Connecticut's congressional delegation has already started working with the Defense Technology Initiative and its members, including the Connecticut Center for Advanced Technology, which promotes the use of new technology in the public and private sectors, to create a sustainable New England strategy to stop sequestration and grow the region's defense assets.
If the region is to be successful in this goal, it must draw on unprecedented cross-state collaboration and bipartisan cooperation. At stake are not only tens of thousands of good jobs, but the future capabilities of the world's best military.
Christopher Anderson is the president of Defense Technology Initiative. Elliot Ginsberg is CEO of the Connecticut Center for Advanced Technology, a nonprofit economic development organization.