2014 Government Regulations & Business Summit
Join PBN and our sponsors for our Government Regulations & Business Summit on Th ...
When the recent blizzard dumped more than two dozen inches of snow in parts of Rhode Island, it wasn’t just local municipalities and the state government that sprang into action to help with the cleanup. Just as they did after Tropical Storm Irene, Superstorm Sandy, and now Winter Storm Nemo, the Rhode Island National Guard was called in to help provide essential services, such as transportation, snowplowing and debris removal to help state agencies and local power companies.
Unfortunately, that kind of support may be impacted if the crippling effects of federal sequestration cuts and a makeshift continuing resolution for the Department of Defense are not immediately addressed by Congress.
As Army Gen. Frank J. Grass told the U.S. Senate Armed Services Committee recently, “Sequestration will be devastating to the Department of Defense and the National Guard. … The ability to provide ready forces and equipment to respond to disasters in support of our nation’s governors and to meet our federal obligations will be negatively impacted.”
But the federal government’s failure to avoid sequestration and the inability to pass a new DoD appropriation bill doesn’t end with the National Guard. As our group, the Southeastern New England Defense Industry Alliance recently pointed out, inaction in Washington could cost the state hundreds of high-end jobs and have a deep, negative impact on the state’s already struggling economy. Put bluntly, it could have catastrophic results for Rhode Island.
The Rhode Island defense industry currently supports more than 12,000 jobs, with an annual payroll of more than $700 million. The overall impact of the industry on the state economy is $1.75 billion. Job cuts have already occurred as a result of the stop-gap continuing budget resolution passed last year in the absence of a formal federal budget.
Even more draconian cuts will follow as a result of sequestration scheduled for March 1. In fact, we estimate the actual impact could be a reduction of 2,520 workers by September 2013 if action is not taken by Congress. The National Association of Manufacturers puts the number even higher – 2,800 jobs lost.
Further, given the economic multiplier effect of these cuts and their impacts, we believe there will be a more immediate, extensive and negative impact on the entire Rhode Island economy.
The Navy, by necessity, has already begun to implement a number of cost-cutting measures that will significantly impact the defense industry in Rhode Island. Procedures are under way for the Navy to assess any funding intended for contracting. Only “mission critical” funding would be allowed to proceed. As a result, since January some SENEDIA companies already have begun to furlough employees for which funding was determined to be for programs not deemed mission critical.
There also will be other “smaller” sacrifices for the community, which also will come with economic impacts attached to them. No more Blue Angels, which help drive the large crowds to the annual Quonset Air Show, and no Navy Week celebrations for Rhode Island.
Like most Americans, we recognize the fiscal pressures our nation is under, and we understand that long-term reductions need to be made. However, we also believe a more thoughtful, deliberate budget solution can achieve those long-term goals and can help avoid the damaging, reactionary “whiplash” measures which we are on the brink of seeing implemented.
We are 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. Should these cuts come to pass, it’s not only our National Guard that will be impacted, but also local workers, and in turn the greater Rhode Island economy. And in the end the entire national economy will be negatively impacted. •