WBUR

Looming Defense Cuts A Key Issue For Brown, Warren

Chris Marzilli, president of General Dynamics C4 Systems, describes the fully equipped military vehicles, laden with General Dynamics communication software. The Taunton-based complex faces federal defense cuts. (Courtesy General Dynamics).

Chris Marzilli, president of General Dynamics C4 Systems, describes the fully equipped military vehicles, laden with General Dynamics communication software. The Taunton-based complex faces federal defense cuts. (Courtesy General Dynamics).

TAUNTON, Mass. — Massachusetts companies build missiles, jet engines and some of the most sensitive electronics going. The defense industry is a major driver in the Massachusetts economy, directly employing about 130,000 people.

But federal defense spending is facing steep cuts on Capitol Hill and from the Pentagon. Thousands of jobs in Massachusetts are at stake — an issue the next U.S. senator from here will grapple with almost immediately in Washington.

WIN-T Technology In Taunton

At a sprawling manufacturing complex here in Taunton, Chris Marzilli, president of General Dynamics C4 Systems, a business unit within the company, walks us through secure, glass doors, and into a large building.

“We are in Building 80, which is the factory for Warfighter Information Network Tactical — WIN-T,” he explains.

WIN-T is a secure communications network linking soldiers on the battlefield to each other and commanders, giving them a super-fast Internet connection.

The technology is contained in a sand-colored, four-foot-tall box topped with a dome, with cords snaking out, connecting to industrial-sized outlets on its panel.

“So think of vehicles to vehicles in a convoy being able to communicate at kind of the Internet you expect in your home life,” Marzilli says. “This changes the game. This allows us to do things at megabit speed and provide applications right down into the foxhole … it allows them to understand the environment, see first, if you will, and then act decisively. And effectively do their job more safely.”

But WIN-T faces cuts. As of just a few weeks ago, a $334 million cut threatened the program and hundreds of jobs. But just days ago, word came that the cut has been scaled back to $54 million. Marzilli credits the Massachusetts congressional delegation and specifically Sen. Scott Brown for the save.

But General Dynamics, and other companies doing defense work in the state, are facing down the barrel of much bigger cuts in the form of a federal program called sequestration.

Thousands Of Jobs At Stake

“Sequestration could wipe out more than a decade of growth, and could take a decade or a generation to recover from,” says Chris Anderson, president of the Defense Technology Initiative and the Massachusetts High Tech Council.

Sequestration strikes fear in the defense industry, as it calls for $1.2 trillion in across-the-board cuts in all programs nationally — about half of that in defense.

Studies by the Donahue Institute at the University of Massachusetts show it could cost Massachusetts 30,000 jobs.

It is expected to slice into work at many of the defense giants like General Dynamics and Waltham-based Raytheon, but small businesses as well, including those that might hold one single defense contract to make that one widget.

“Some of these smaller businesses are very dependent on that single contract or that supply chain that they play for that system,” says Marty Romitti, the Donahue Institute’s director of economic and public policy research. “So that whole network is out there and it spans across New England. And all of these have reverberations through the business community.”

He fears sequestration could stall Massachusetts’ economic recovery.

“Unraveling that innovation economy with some of these cuts is very concerting, because it’s hard to put the pieces back together again once Humpty Dumpty’s fallen off the wall.”

The big question for industry insiders is whether Congress will stop those sequestration cuts from taking place. And, the debate is on.

What Would Our Senate Candidates Do?

Nationally, Republicans have pushed for cutting non-defense programs instead of defense. Democrats have suggested getting rid of tax cuts instead.

Romitti’s take is: Expect little. “It’d be hard to imagine they take it up before the election, but they won’t have much time after the election,” he says. “They’re in a little bit of a pickle because all sides have a good argument.”

In a statement to WBUR, Democratic Senate challenger Elizabeth Warren acknowledged sequestration would not be good for Massachusetts and said across-the-board defense cuts could be avoided if Congress ends tax breaks for oil companies, closes loopholes, and takes other action. But she said also it is possible to make defense cuts in a targeted way.

A statement from Brown said sequestration should be replaced with “smarter, more targeted budget savings,” warning military cuts will destroy thousands of Massachusetts jobs. But he has declined to say where the money might be found to rescind the cuts.

Outside of defense industry players, executives and workers here, do defense cuts matter in the campaign?

“The constituency that cares most about it is already kind of a largely Republican. So I’m not sure there are a lot of swing voters who are going to be terribly concerned about this,” says Jeff Berry, a Tufts University political science professor. “I don’t think anybody confuses Scott Brown with John McCain on defense issues. He’s still a junior senator and he’s simply not established a leadership position within the party.”

People in the defense industry told us they are wary of Warren because of her criticism of big corporate tax loopholes, and that she specifically targeted industrial and defense giant General Electric, which has a plant in Lynn. They also said Warren hadn’t made it clear how she would help the defense industry if she is elected.

But Berry thinks it’s not a big negative if Warren is fuzzy on this.

“I think Warren’s best answer is ambiguity,” he says. “I don’t think she wants to come out full force in favor of large-scale defense cuts because it does hurt sectors of Massachusetts. On the other hand, she wants to be honest, and not say that she’s going to work on behalf of particular industries that she has no intention of working for.”

Meanwhile, the industry is weighing in with its dollars.

Federal reports show employees of the 10 largest defense companies in Massachusetts and their political action committees have given more than $90,000 to the Brown campaign.

Both Marzilli of General Dynamics and Anderson of the Defense Technology Initiative have given to Brown.

Warren raised just under $5,000 from workers, and none from the defense company PACs.

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  • DannyShay

    If we want to shrink our national budget we need to make cuts to defense spending, and that is all there is to it.  It is unfortunate that Elizabeth Warren is unwilling to make a stand.  If this were 30,000 jobs in social services, there would be no resistance to cutting them.  Defense jobs are paid by our tax dollars and the defense budget is more bloated at this point than anywhere Scott Brown thinks he can target on the bare bones social services side.

    • DougC

      sadly, for all intents and purposes, these could be soc service jobs.  The problem is, if it is “your job” or “my job” we don’t want it cut and look to Gov’t to protect that job, even if it isn’t really needed.  Change the job descriptions, work to shift def jobs to “real” private sector jobs, and you have something. But using that workforce to update the infrastructure while we fight over it, and figure out how to make that real transition to a sustainable economy, not necessarily a growing one, but a solid, sound one, isn’t such a bad idea is it?  We need roads, sewer, etc, but do we really need more bullets, jets, and computers in stockpiles?

  • noslack2327

    I am a combat veteran, and I too, think the Defense Department Budget is unnecessarily huge. We need not have a defense budget which is as large as the next 17 countries combined.

    The problem is with our politicians who put their reelection priorities ahead of the needs of the American people. The Defense Department budget is NOT an instrument for job creation, especially for politicians’ reelection. If politicians wish to spend money to put people to work, let them do so on infrastructure improvements or another need from which the taxpayers will benefit. And, no, we gain no general benefit from the current level of Defense expenditure.

    • DougC

      Love your thinking. Keep at it and share it more and more.

  • comment

    Thank you for covering an issue. We need more of the same.

    We, the voting public..the people, are inundated with deceptive media and candidate content. Are we up to the challenge of sifting through the propaganda and deceit?

    Thank you public radio.

    • DougC

       A valid question and concern.  I wonder sometimes.  Sscary isn’t it?!?    Read my comment and give me feedback please.

  • Newton Whale

    Wow. 
    So government spending really DOES create jobs?And both senate candidates agree?Does that make them both socialists?
    What about “General” Dynamics?
    Sounds pretty collectivist to me.But if both Warren and Brown agree that government spending can create jobs, why is it that only Warren supported the President’s $447 infrastructure jobs bill? And why did Brown vote against it?http://www.boston.com/news/local/massachusetts/articles/2011/10/11/us_sen_brown_casts_vote_against_obama_jobs_bill/ 

  • X-Ray

    The best way to cut “defense” spending is to stop the wars we are waging in
    countries that don’t want us and will never accept Western values. Their corrupt
    governments only wants our money. Stop the extended commitment that Obama signed
    up for in Afghanistan. And look at all the American and native lives an American
    withdrawal will save.

  • DougC

    This is classic political ping pong.  On one hand,  I would hope most people, including congress and senate, realize that the defense budget is a huge percentage of the overall budget.  Approximate numbers- 20% Defense; 10% interest on national debt; 25% SocSec /labor (what does that really include??); 20% Healthcare; 25% everything else (not sure what that includes but it is certainly a lot of $$).   So, if Def is 20%, of the total, then is it approx 20% of the interest pd or 2%.  So the total spent on Def is closer to 22% of the total budget.  I am not really keen on expanding the other categories, but I am certainly interested in getting rid of the interest pmt and decreasing the budget, while decreasing the national debt.
    The problem with so much def $$ is, it really doesn’t improve the overall economy, unless we are actually selling a lot of the products outside the country (which does create its own inherent problems, not the least of which is we end up directly or indirectly arming a lot of countries and people who we have to increase our own arms to defend ourselves from due the their likely hostility toward the US. but perhaps that is another matter) 
    The money spent isn’t generated by an improving economy, it is spent from tax dollars.  So we pay taxes to pay for defense, then we pay taxes to pay the interest on the defense we dont’ have enough money to pay for (our revolving defense credit card in essence).  Meanwhile, we don’t really use a lot of that production in meeting the needs of our population, not wants, needs, by way of a sound economy based on products and services that really contribute to the well being of the nation.  Not talking about welfare and handouts and pork, but money that circulates into the economy for quality food, transportation, quality clothing,  communications, quality services, etc.  I am not talking about MacDonalds, Hummers, Gucci, and large screen TV’s or Iphones and nail salons for everyone.  Good, value added and inherently valuable goods and services. (sounds a little socialistic but not intended to.  Will work on that more but not here and now). Since we are involved in warring activities that the vast majority seem to feel are not worth the money being spent (see national polls), then it seems logical that we can cut defense spending by some significant percentage.  Let’s use 25% or 5% of the overall national budget.  Let’s leave the debt service at current rates to accelerate paying it down, like making exta pmts on a home mortgage to pay it off earlier that it’s contractual term.
    So, now we can reduce taxes by some 25%.  BUT, that is going to put a ding in the economy where it results in business proceeds decreases, which likely lead to jobs cut.  HOWEVER, as there is a lot of waste in the defense budget, there is some waste in the rest of the budget as well (benefits for politicians that can be curtailed, pork projects, redundancies in govt agencies, etc). We don’t have to punish the current  beneficiaries but can substantially reduce these outlays in the future, thus reducing the need to tax  and spend somewhat frivolously in future years.  The problem is job losses in specific places, for example, the defense related jobs in Ma. that are the focus of this article.  I like the idea, as noted in Newton Whale’s comment, of transitioning the $$ toward infrastructure improvements and maintenance.  We are in great need there and it is a truly, clearly, inherently value based product for everyone.  If it weren’t, we (all +/-) wouldn’t talk  about it so much would we?
    Additionally, it is pretty clearly and generally accepted that education/training are key to economic soundness.   Skills are a valuable commodity, that generally require education/training to establish a base to build upon with experience.    So wouldn’t it make sense to bite a piece of the bullet in “Everything Else” and “Soc Sec/labor) and start funneling that capital into education/training?  There are numerous ways to do this without just expanding schools.  Incentives (tightly restricted) for businesses for internships and baseline employment and training.   This capital investment to improve people’s value to business, improves their value to their communities and the nation, the world for that matter.  This takes time, and takes a bullet biting step to get it started, NOT more taxes to pay for it, but redirecting the flow of gov’t spending.
    Sorry for the digression. But the point is, unless we plan to sell most of our arms products and services outside the country in mass quantities, potentially arming our enemies one way or another and adding to world instability, the defense jobs that are such a concern in Ma and elsewhere, are inherently a concern anyway.  We are playing a shell game where no one really wins.
    Growing the economy is no more about simply creating jobs than fighting hunger is about making more forks.  The policies and practices have to be designed to be sustainable WITHOUT increasing taxes, and really designed to DECREASE taxes.  
    We can’t keep trying to keep the glass full by drinking the milk.  The system has to be designed to feed the cows that make the milk.  Does anyone even remember the “Goose That Laid the Golden Egg”???  
    Politicians who might want to say this in their campaigns, would probably never get the votes they need to be in position to take this real task on.  At least not as long as “We The People”, continue to look only to our individual interests and benefits, and only in the short term.  This is going to hurt a little to a lot, now or later, but it IS going to hurt and we’d better acknowledge it and do what we need to do to keep the glass full and the goose alive.
    By the way, WE includes factory workers, politicians, small business owners, family households,  unions, lawyers, doctors, gov’t employees (of which there are far too many since they and their benefits have to be paid for with taxes), and last but far from least, Wall St and the 1% or whatever the percentage is.  At least if they want to keep enjoying their 1% they’d better.  We are all emptying the milk glass, eating the cows, and killing the goose.  It won’t work forever and bandaids won’t fix the problem, just stay it off for the next generation to deal with.  Happy Birthday class of 2020, 2040, 2060, and good luck!!

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