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Shutdown could cost Connecticut hundreds of jobs

By Jennifer McDermott

Publication: theday.com

Published September 30. 2013 1:00PM   Updated October 01. 2013 3:07PM

Glastonbury — Connecticut will have 300 fewer jobs than it otherwise would if the federal government shuts down for a few days, economist Steven Lanza said Monday.

A three- to four-week closure would cost 2,000 jobs, Lanza added.

As tension grew over the prospect of the government closing at midnight, U.S. Sen. Richard Blumenthal, D-Conn., Lanza and several manufacturers gathered Monday at HABCO, a maker of ground test support equipment for the aerospace industry. They were there to discuss what a shutdown would mean for the state and particularly its manufacturing industry, since government contracts account for half or more of the business for many of these companies.

Lanza said a three- to four-week shutdown would reduce overall economic growth in the fourth quarter by 1.4 percentage points and would cost about $100 million in annual income associated with those 2,000 jobs.

Blumenthal made the stop at HABCO before returning to Congress, with the Senate due to vote on its version of the spending bill. He said he was still hopeful the shutdown could be avoided but added that he was worried about the potential impact on jobs, economic growth and the state's ability to rebound from the economic recession.

U.S. Sen. Chris Murphy, D-Conn., said in a press conference call with reporters later in the day that he "underestimated the craziness of the House of Representatives."

The Republican-controlled House passed a continuing resolution early Sunday to extend the current spending rates for six weeks but also to delay the Affordable Care Act, which Senate leaders said they would not agree to.

"You don't continually risk the shutdown of government, defaulting on our debt and the security of our economy over a temper tantrum about social policy," Murphy said.

After the continuing resolution passed, U.S. Rep. Joe Courtney said House Republicans need "to give up their single-minded obsession with undermining the Affordable Care Act and agree to fulfill their duty to help run the government."

"They will not accomplish a repeal of the Affordable Care Act, but they will manage to kill jobs and waste billions of dollars on this farce," said Courtney, D-2nd District.

At HABCO, company President and CEO Brian Montanari said he has 41 employees, up from 30 nine months ago. The company has been in business for 43 years and is poised to grow 30 percent next year, Montanari added, but that will not happen if contracts are delayed or canceled.

"We need as much help as possible to add jobs to the Connecticut marketplace," he said.

Defense contracts used to be 70 percent of their business, Montanari said, but he worked to expand the commercial side of the business to 50 percent in recent years as the government cut back.

Monday was Ginneane Vesce's first day at HABCO as a receptionist. Vesce, 24, of East Hampton, said she was not "too worried" about a shutdown because she did not think Montanari would hire her and then quickly lay her off.

"I'm trying to be really positive," she said.

But Jamison Scott of the New Haven Manufacturers Association said the budget showdown could delay orders, which would reduce productivity and production at the manufacturing plants and ultimately lead to layoffs. There are 4,600 manufacturers statewide, employing 166,000 people, he added.

Since every manufacturing job helps support two to three jobs in the service sector, up to 600,000 people could be affected in some way, Scott said.

Lanza, executive editor of The Connecticut Economy, said Connecticut would have recovered all of the 120,000 jobs it lost in the recession by last year, instead of just 60,000 to date, if the government had not continued to contract and the budget squabbles had not raised the level of political uncertainty.

And, Lanza said, the estimates for job losses in Connecticut due to a shutdown are "probably conservative."

There are about 9,000 federal employees in Connecticut. Most would be furloughed during a government shutdown, Murphy said. Checks for Social Security beneficiaries and veterans would also be delayed, Head Start programs may close if a shutdown were to last more than a few days and regulatory agencies would be stripped, which means, among other things, food would not be inspected, he said.

Both Blumenthal and Murphy said any debate in Congress over how to improve the Affordable Care Act should be done separately, and not as a condition of continuing the government's work.

The serious and potentially long-lasting consequences discussed at HABCO, Blumenthal said, "show why coming together is so important."

j.mcdermott@theday.com

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