Newly re-elected U.S. Representative Jim Himes, a moderate
Democrat operating out of Connecticut’s 4th District, has said
concerning the nation’s so called fiscal cliff, “Washington understands how severe the
consequences of the fiscal cliff are. When I saw House Speaker (John) Boehner
speak two days ago, I thought he was conciliatory and traced the outlines of a
deal."
Of
course, the perceived severity of fiscal cliffs depends to some extent on one’s
political vulnerability. Not all severity is created equal, and Democrats ensconced
in Connecticut’s safe districts, such as U.S. Representatives John Larson and
Rosa DeLauro, are apt to confront the fiscal cliff with less trepidation than
Mr. Himes.
A recent study conducted by the Defense Technology Initiative should serve the
members of Connecticut’s all Democratic Congressional delegation as a splash of
cold water in the face. The study presents a sobering picture of Connecticut’s
own fiscal cliff that should give vertigo to all freethinking and rational
politicians in the state.
We
learn that the amount of defense contracting in Connecticut has increased by 51
percent since 2003. The state’s defense contracting represents 5.1 percent of its
economic output, not a negligible figure.
Should
a lack of agreement between President Barack Obama, Democrats who control the
U.S. Senate and Republicans who control the U.S. House trigger the automatic
cuts implanted in the Budget Control Act of 2011, the effect on Connecticut
would be severe, resulting in a loss of 36,000 to 50,000 jobs at a time when
Connecticut is losing jobs to other states that are more business friendly.
The
state treasury, presently more than $300 million in arrears according to a story in CTMirror or $690 million to $1 billion for each of the next two years
according to a Bristol Today story,
would also be hard hit as the state tumbles off the national fiscal cliff,
since the defense industry contributes about $860 million towards Governor
Dannel Malloy’s yet unbalanced budget. No one seems to know whether Malloy’s
budget has EVER been in balance. According to Comptroller Kevin Lembo’s most recent report, the state has recovered
only “31,400 (just over one quarter) of the 117,500 total nonfarm jobs lost in
the March 2008 - February 2010 recessionary downturn.”
Of
the funds received by Connecticut from the federal government and parceled out
to contractors, approximately $9.5 billion is spent on customary defense
products: Virginia Class submarines, Black Hawk Helicopters, jet engines,
turbines, other military components and the like. The spin-off economic
activity generated by the contracts is even larger, about $22.4 billion, which
affects about 101,000 jobs, according to the Defense Technology Initiative
report.
Of
course, the depth of the national “fiscal cliff” may be reduced if the
president, the Democratic controlled U.S. Senate and the Republican controlled
U.S. House are able to reach a satisfactory compromise on the self-elapsing
Bush era tax cuts, otherwise known as tax increases.
But
even assuming an end to the game of chicken, there must be defense cuts. Obama
– who won the election -- needs the defense cuts to apply as a continuing
payment on the Democrat’s new and expensive social programs, primarily
Obamacare. And Connecticut’s all Democratic congressional delegation, having
pledged its troth to Obama’s vision of the future in recently concluded state
campaigns, is hardly in a position to offer at the alter a strenuous opposition
to either Obama’s proposed defense cuts or increased taxes on
quarter-millionaires or the increases in spending that will be plugged into a
future Obama budget – presuming the president surprises everyone and offers a
passable budget in his second term.
Unfortunately,
Connecticut’s congressional delegation may not be ideally positioned to rescue
the state from severe defense cuts. Its two U.S. Senators are relatively new
arrivals and do not have enough political chits in the game – unlike departed
U.S. Senator Chris Dodd and the departing U.S. Senator Joe Lieberman – to affect
spending priorities in their state’s favor; and Connecticut’s House members
will be joining an assembly controlled by Republicans averse to a crippling
regulatory environment and increased business taxes that may, they predict, lead
to a double dip recession and adversely impact an agonizingly slow recovery.
All
of which leaves Connecticut in limbo, not to be confused with Lembo, who
appears to be able to forecast deficits much more ably than the Malloyalists surrounding
the governor, or indeed the governor himself – who recently promised no fewer
than three times in one media availability that there will be no new tax
increases in the coming budget – a dubious cry that recalls George H. W. Bush’s
no new tax pledge and former Governor and Spendthrift Lowell “The Maverick” Weicker’s prophetic
insistence that a state income tax would incinerate to Connecticut’s economic
infrastructure .
Addenda
Arecent story in CTNewsJunkie pegs the current deficit at $365-million. Once the
state arrives at the other side of elections, deficit figures tend to explode mysteriously:
“(Updated
3:54 p.m.) The numbers haven’t been certified by the comptroller, but Gov.
Dannel P. Malloy’s budget director told the legislature’s Appropriations
Committee on Wednesday that the state is running a $365-million deficit.”
Comments