State braces for sequester impact

In light of massive federal spending cuts due to take effect today, Connecticut public programs are facing unprecedented budget reductions.

After Congress failed to reach a deal that would avert $85 billion in automatic spending cuts, known as sequestration, both Connecticut’s public and private sectors are facing a new shock to an already uncertain economic environment. Although the cuts  — which were designed to reduce government spending by a total of $1.2 trillion in the coming decade -— will officially begin today, they will not reach their full severity until several weeks from now when the cuts fully kick in.

“It hurts in Connecticut. It’s not one cut that hurts — it’s an accumulation of cuts that will hurt an already damaged economy,” Connecticut Sen. Chris Murphy told the News. “I think Congress should act like grown-ups and either postpone it or come up with a package [of more reasonable reductions].”

On Monday, Connecticut Sen. Richard Blumenthal LAW ’73 told reporters that job losses throughout the state, resulting from sequestration, could reach as high as 36,000.

Nevertheless, Pat O’Neil, a spokesman for the Connecticut House Republicans, suggested that sequestration would not be as destructive as many politicians are claiming. He added that the cuts would serve to put the country’s budget back on track in the long term.

Half of the federal budget cuts will come from the country’s defense budget, a move that governors and members of the military have characterized as detrimental to the nation’s security. In Connecticut, the Department of Defense would be forced to furlough approximately 3,000 civilian employees, according to a White House statement. In addition, projects at the New London submarine base, including the repair of the USS Providence and two demolition projects, would be delayed.

Because Connecticut is home to several military contractors, including Pratt & Whitney, Sikorsky and Electric Boat, reductions in defense spending would inflict job losses beyond Connecticut’s military bases.

The other half of the automatic reductions will come from nondefense discretionary spending, including education, law enforcement, public health, child care and clean air protection. According to the White House fact sheet, Connecticut would face approximately $8.7 million in cuts to primary and secondary education, placing 120 teacher and aide jobs in jeopardy. Additionally, 500 Connecticut children would lose access to preschool education due to reductions to Head Start, a national program that provides low-income families free preschool education and related social services.

The sequester was proposed during budget negotiations in the summer of 2011, when Congress and President Barack Obama sought a mechanism that would force both parties to negotiate a long-term debt-reduction strategy. Republicans and Democrats at the time considered sequestration so radical a solution that it would force their hand in reaching a more desirable deal.

The emphasis on debt reduction, however, has drawn criticism from economists nationwide. Earlier this week, 350 economists — including Yale professors Jacob Hacker and John Roemer — signed an open letter urging politicians to reach an agreement to avert the cuts. The letter, entitled “Jobs and Growth, Not Austerity,” warned, “The fragile recovery is threatened by obsessive concern with cutting deficits that has infected both parties.”

“Worrying about the size of the deficit in the United States is just totally inappropriate at this point,” Roemer said, characterizing the sequestration debate as one focusing more on ideology than economics. “A recession is the time when you need stimulus. The experience of the European countries that have engaged in austerity proves this.”

Opposition to sequestration is widespread, with 62 percent of Americans saying the cuts would have a negative impact on the economy, according to a Pew poll released earlier this week. Furthermore, the poll found that 70 percent of Americans believe the sequester would have at least some effect on their personal finances.

The Congressional Budget Office estimates that, without sequestration, the federal government will run a $845 billion deficit this year.

Comments