Congress’ Failure to Complete Defense Spending Bill Also Threatens Jobs and Local Economy
Middletown, RI – A group of defense industry companies is warning that the federal government’s failure to avoid sequestration and the inability to pass a new Department of Defense (DoD) appropriation bill could cost the state hundreds of jobs and have a deep, negative impact on the state’s already struggling economy. In a letter to the state’s Congressional delegation sent by SENEDIA (Southeastern New England Defense Industry Alliance) the group stated that the looming sequestration, scheduled for March 1, “could have catastrophic results.”
The Rhode Island defense industry currently supports more than 12,000 jobs, with an annual payroll of more than $700 million. According to the group, job cuts have already occurred as a result of the continuing budget resolution (CR) passed last year in absence of a formal federal budget. More draconian cuts will take place as a result of sequestration scheduled to take place on March 1.
In her letter to the Rhode Island delegation, Molly Donohue Magee, Executive Director of SENEDIA estimated that, “the impact could be a reduction of 2,520 workers by September 2013” if sequestration is not averted and the DoD is forced to continue operating under a CR. Those figures were extrapolated from a small sample of SENEDIA members surveyed, who estimated there would be a combined reduction in their Rhode Island workforce (including short- and long-term furloughs and terminations) of more than 20 percent.
“In addition, given the economic multiplier effect of these cuts and their impacts, SENEDIA believes there will be a more immediate, extensive, and negative impact on the local R.I. economy,” Magee added.
SENEDIA, an alliance of defense related businesses and organizations, draws most of its members from Rhode Island, but also includes companies from southeastern Massachusetts and the Groton region of Connecticut. Members of the group include Sea Corp, Rite-Solutions, Chemart, McLaughlin Research Corporation , General Dynamics-Electric Boat, Raytheon Integrated Defense Systems, and BAE Systems, among others.
“The threat of sequestration is imminent,” said Jody Sullivan of the Newport County Chamber of Commerce, a member of the organization. “We need our leaders in Congress from both sides of the aisle to step up now to ensure that we can continue to keep these jobs in Rhode Island that protect our national security.”
According to the Alliance, the Navy has already begun to implement a number of cost-cutting measures that will significantly impact the defense industry in Rhode Island. Procedures are underway for the Navy Program Offices to assess the criticality of all funding intended for contracting. Only “mission critical” funding would be allowed to proceed. As a result, since January some SENEDIA companies have already begun to furlough employees where funding was determined to be for programs not deemed mission critical. Future actions directly related to sequestration will have further negative impacts on the defense industry and will also impact government agencies and their civilian workforce in Rhode Island.
“We recognize the fiscal pressures our nation is under, and we know there are long-term reductions that need to be made,” said Warren Blakeley of McLaughlin Research Corporation, another SENEDIA member. “However, we also believe a more thoughtful, deliberate budget solution can achieve those long-term goals and can help avoid the reactionary ‘whiplash’ measures which we are on the brink of seeing implemented.”
SENEDIA asked that legislators maintain a continued focus on working with others in Congress to ensure that sequestration is averted and that the DOD budget be implemented for Fiscal Year 2013 as soon as possible.
“I am hopeful that common sense will prevail so that our companies can continue to provide good paying jobs to Rhode Islanders, who play a pivotal role in maintaining America’s national security,” Ms. Magee said. “That being said, we are entering the final hours of optimism.”