Defense Lobbyists Warn Cuts Threaten Mass. Jobs
Losses Could Hurt Bay State Especially
October 11, 2011
By Theo Emery
WASHINGTON - Defense lobbyists are packing a potent weapon in the battle to protect their industry: a warning that more cuts to the Pentagon budget will cost jobs, which could hit Massachusetts particularly hard.
Often, military contractors focus their pitch for federal dollars on the need to bolster national security. Now, however, the ultimate threat to the nation could be its economic insecurity.
“When people are polled right now, what’s their number one issue? Jobs and the economy. Defense and homeland security and terrorism are polling very, very low,’’ said Michael H. Herson, a lobbyist whose firm’s clients include Raytheon Co. , the defense titan based in Waltham. “So how do you make this issue resonate? You talk about jobs.’’
The Bay State is considered particularly vulnerable. From providing training shoes for soldiers to supplying sophisticated cruise missiles for Navy destroyers, companies here have played an outsized role in defense contracting.
The industry generates a significant number of indirect or direct jobs in Massachusetts - about 115,000 in 2009, the most recent year cited in a recent report by the University of Massachusetts Donahue Institute. Defense companies and their lobbyists are focusing much of their efforts on a 12-member bipartisan super committee assigned the task of cutting the nation’s projected deficit by at least $1.5 trillion over the next decade. Senator John F. Kerry, Democrat of Massachusetts, sits on the committee.
“We think the stakes are quite high on two fronts, both on ensuring that soldiers are well protected, but also the economic impact that it can have in the United States,’’ said David Costello, managing director of Boston-based ADS Ventures, whose lobbying team works on behalf of companies that outfit soldiers, including Massachusetts companies Polartec LLC in Lawrence, New Balance in Boston, and Duro Textiles in Fall River.
The Aerospace Industries Association, a trade group that represents Raytheon and other large companies, launched a public relations campaign last month to persuade Congress not to cut the Pentagon further. The group will make its case “anywhere people will listen,’’ said the association’s president, Marion C. Blakey.
“Make no mistake, combining the cuts that have already occurred and the potential for more cuts defense cuts . . . hundreds of thousands of American workers’ jobs are at risk,’’ she said.
The exact level of lobbying won’t become clear until late October, when federal lobbyists must disclose their activities and the pay they receive to do it. Last year, the industry spent $146 million, through 1,050 lobbyists, to protect its interests, according to the Center for Responsive Politics.
Alan Clayton-Matthews, an economist at Northeastern University, said much of the state’s defense-related industry is in high-tech sectors, and cuts in those areas would hit the state harder than many other parts of the country. “It would likely result in job losses at places like Raytheon, and there are a lot of smaller companies that are defense contractors as well,’’ he said. “In this environment, it might be difficult for laid-off engineers to find other work.’’
The value of Pentagon contracts in Massachusetts has tripled in noninflation-adjusted figures since 2000, from $5.5 billion to $15.1 billion in 2009, according to the study by the Donahue Institute, which does research for government agencies and private businesses. About $500 billion in Homeland Security contracts were also directed to the state. The state was fifth in the nation in the amount of Pentagon contracts it attracted.
A maker of the Tomahawk cruise missile and defense missile systems, Raytheon alone attracted $4.6 billion in Pentagon contracts to Massachusetts in 2009, almost a third of all of the defense funding that went to the state that year. A spokesman for Raytheon, which paid for the Donahue study, declined to comment. The Pentagon took a $350 billion hit as part of the agreement in August to raise the debt ceiling, allowing the government to continue to borrow money and meet its obligations.
As the debate continues, lobbyists have a tricky task: defeating any new plans to cut defense spending in the supercommittee, while also trying to avoid another $600 billion in cuts that would be part of the $1.2 trillion in automatic cuts that would take place should the committee fail in its mission. Those mandated cuts were also part of the August deal. Many officials in and outside of government have warned against such a further contraction.
“That kind of blind budget chop would be catastrophic,’’ said Christopher R. Anderson, president of the Massachusetts High Technology Council and a sister group called the Defense Technology Initiative.
Lawmakers say they’re cognizant of the tension between cutting defense spending and maintaining jobs. Representative Barney Frank, a Newton Democrat who has called for an additional $200 billion in defense cuts, said the greatest savings would come from reducing US commitments overseas, whether in Iraq, Germany, or Japan, not slashing acquisitions contracts.
James P. McGovern, a Worcester Democrat and critic of the US wars in Iraq and Afghanistan, is skeptical that the supercommittee will even look at cutting the Pentagon budget, which he called “a sacred cow.’’
“There is a big lobbying force out there for these contracts. I also think, politically, members of Congress don’t want to be on record as voting against defense,’’ he said. “It’s become a political hot potato to talk about defense cuts.’’