Wednesday, March 12, 2014
WASHINGTON - Paul O'Connor is angry -- if not furious -- with Congress lately, and he doesn't hesitate to say so.
"We get pushed to the edge of the cliff and then get pulled back. And in two months, we get pushed to the edge again and pulled back," said O'Connor, an electrician and labor leader at Portsmouth Naval Shipyard in Kittery. "That is no way to run a country, but that is what they are doing."
Despite giving themselves a two-month extension back in January, Congress and the White House have yet to find a way to avoid $85 billion in automatic spending cuts that will kick in March 1. Now, with no deal in sight and Congress in recess until Feb. 25, the roughly 4,700 Maine and New Hampshire residents who work as civilians at Portsmouth Naval Shipyard are facing possible furloughs, project delays or worse.
"Congress put a gun to our heads because they don't have the fortitude to get the job done," said O'Connor, president of the Portsmouth Metal Trades Council, an umbrella group representing nine unions at the shipyard.
Portsmouth's employees are by no means the only Maine workers worried about the near future.
The across-the-board cuts will affect nearly every federal agency and all public and private institutions tied to federal funding.
Defense contractors in Maine report they have already scaled back their work forces.
The budget cuts could mean fewer air traffic controllers or security screening personnel at Maine airports, less funding for research at the state's universities and scientific laboratories, and less money to help low-income Mainers heat their homes.
Head Start and remedial education teachers largely paid with federal grants could be let go or face reduced hours.
"In my case, it is going to affect direct services to disadvantaged children," said Paul Stearns, superintendent of School Administrative District 4/Regional School Unit 80 in Guilford and president of the Maine School Superintendents Association. "It's very frustrating that they just can't get together on this."
CUTS APPEAR UNAVOIDABLE
The across-the-board budget cuts known as "the sequester" were supposed to be the blunt instrument that prompted Congress and the White House to come up with a more precise way of reducing spending and trimming the federal deficit.
But Republican and Democratic leaders remain deadlocked over whether the solution should include "new revenue" -- tax increases, in many cases -- or be achieved primarily through deep cuts in social programs. Congress merely sidestepped the spending cuts side of the so-called "fiscal cliff" in January by moving the deadline to March 1.
Both sides have introduced proposals in recent weeks, yet a deal remains elusive. Many in Congress appear increasingly resigned to the fact the cuts will take effect, at least initially.
"I am not interested in an 11th-hour negotiation," Sen. Mitch McConnell, the Republican minority leader from Kentucky, said Tuesday before adding that he believed the sequester would likely take effect.
Potential impacts on defense programs have received the most attention because half the cuts would come from the military's budgets.
In fiscal year 2011, more than 350 Maine companies landed $5 billion in defense- and homeland security-related contracts, although contracts typically total about $1.3 billion a year.
Those 2011 contracts supported an estimated 53,000 jobs across the state, according to a recent report by the Defense Technology Initiative, an economic development and advocacy group that represents New England's defense sector.
Those businesses include huge operations -- such as the 5,000 shipbuilders at Bath Iron Works -- as well as small contractors and subcontractors.
DEFENSE CONTRACTORS IN LIMBO
Among the latter is Howe and Howe Technologies, a Waterboro research and development firm that has won contracts to build manned and unmanned ground vehicles -- essentially mini-tanks -- for the military.
"Our path forward has changed and the way we are able to do business has changed," said Geoffrey Howe, CEO and co-founder of the company with his brother Michael. "We have taken precautions, and the precautions are grim."
Howe said the company had some layoffs and has not hired anyone new in some time. Future layoffs are a possibility, he said, although the company is trying to do more work for the private sector to avoid the uncertainty over government contracting. Howe and Howe currently has 20 employees.
Howe used a nautical analogy to explain the challenge of planning their research and development amid that uncertainty.
"We can't manage our vessel and sail to safe harbor because we are getting conflicting weather reports and we don't know where we are," he said.
Top U.S. military officers didn't sugarcoat their views last week on the potential across-the-board cuts, predicting they would result in a smaller, less-mobile and more poorly trained military.
"We will immediately erode the readiness of our force," Adm. Mark Ferguson, vice chief of naval operations, told the Senate Armed Services Committee.
Specific to Maine, Ferguson said the Navy may delay procurement of a destroyer built at BIW and would likely delay nearly $300 million in repairs to the USS Miami nuclear submarine at Portsmouth Naval Shipyard.
In addition, Portsmouth's civilian employees would likely be furloughed for one day a week for the next 22 weeks -- the equivalent of a month's work. That will, in turn, cascade through the Navy's ship repair and maintenance schedule and prompt some frustrated workers to find more stable jobs, he said.
"It takes years to develop a nuclear welder, for example," Ferguson said. "We could lose those skills when the work goes away and they have to find employment, or if they are furloughed they may make a choice to retire or leave federal service."
O'Connor, the president of Portsmouth's union council, agreed that was a possibility.
"People will leave the shipyard, and that will leave a huge experience gap," O'Connor said.
The situation at BIW -- Maine's largest private employer -- is less clear. Rob Doolittle, spokesman for BIW owner General Dynamics, declined to comment Friday because "there was so much uncertainty about what may happen on March 1."
Dan Dowling, president of BIW's Local S6 chapter of the International Association of Machinists and Aerospace Workers union, said there is "some degree of concern and anxiety" among the workers but said the yard has a fair amount of work already under contract.
"But a year or two down the road is a whole 'nother story," Dowling said.
Maine schools, meanwhile, are bracing for an 8.2 percent cut in federal education funding.
READING, MATH PROGRAMS AT RISK
Perhaps the biggest impact will be on so-called "Title 1" programs that help fund remedial reading and math instruction. This funding is tied to the percentage of a district's students who get free or reduced-price lunches.
"Communities that have the least ability to absorb (cuts) will be hit the hardest," said Bill Webster, superintendent of Lewiston's public schools, where roughly 60 percent of students receive free or reduced-price lunch.
Lewiston will also see a decrease in funding for its teacher training and English-as-a-second-language programs. But Webster said the reading and math programs will bear the brunt of the cuts, which he said fortunately won't likely hit until next fiscal year.
"It would have severe impacts on programs and would lead to direct layoffs or elimination of programs and transfer of staff to other positions due to retirements," Webster said.
The Obama administration has also warned that, nationwide, the cuts would result in fewer food safety inspectors and air traffic controllers, as well as longer lines at airport security checkpoints and border crossings.
Paul Bradbury, director of the Portland International Jetport, said Friday that it was still unclear how the budget cuts would affect the growing regional airport. Smaller hub airports are sometimes cut less than larger airports that can absorb the reductions.
Bradbury said there is certainly concern nationwide about how the loss of federal security screening and baggage handling agents could affect passenger wait times. But he said the information is so "nebulous" right now that no one knows.
"What we sell in Portland is all about customer service," he said. "Right now, our quality of service is very good. I would hate to have that go down."
Kevin Miller can be contacted at 317-6256 or at:
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