Mass. seeks a voice in debt talks
Delegation warned of disproportionate cuts
WASHINGTON - With $1.5 trillion in federal spending potentially at stake, lobbyists have packed Capitol Hill in an effort to grab the attention of 12 debt supercommittee members. Count members of the Massachusetts congressional delegation among those eager to be heard.
Particularly high stakes for Massachusetts demand an aggressive defense of the state’s interests, said Representative Edward J. Markey. Severe cuts in federal research grants and start-up money for businesses - from which Massachusetts industries and institutions disproportionately benefit - could damage the state’s fragile economy, he warns in a report to other Bay State lawmakers.
“We are the brain state - we are a high-tech, clean-tech, biotech economic epicenter for the nation. These cuts could do serious damage unless they’re done in a balanced way that spreads the burden in a way that’s fair,’’ said the Malden Democrat, who is the most senior member of the delegation.
The report, which Markey’s office will release today, coincides with the first hearings of the supercommittee, a bipartisan group of six Democrats and six Republicans charged with slowing the growth of the federal debt by $1.5 trillion to $4 trillion. The rules setting up the committee give other members of Congress no formal mechanisms for molding or amending the plan while it’s being developed. And they can only vote the final proposal up or down.
That leaves lawmakers such as Markey with few options but to directly plead with supercommittee members - including the Bay State senator John F. Kerry, a Democrat - to preserve funding and programs.
“It strikes me as a very rational response to the somewhat undemocratic situation that we find ourselves in,’’ said John Wonderlich, policy director of a Washington watchdog group, the Sunlight Foundation. Wonderlich added, however, that he knows of no other state delegation trying to organize a unified front in this way.
Markey says the report is intended to explain “to everyone who doesn’t have a lobbyist’’ how the debt reduction process will unfold, show the potential impacts on the state, and provide a foundation for unified action.
The state, with its dependence on innovation industries as a mechanism of overall economic growth, is particularly vulnerable, the report says. Only California tops Massachusetts in receiving research grants and funds from the National Institutes of Health. Last year, the agency funneled some $2.5 billion to teaching hospitals, universities, and companies across the state, supporting 35,000 jobs, the report said.
The metro Boston area is one of the nation’s leaders in life sciences and biotech firms. Many startups depend on federal grants for research, along with collaboration with the doctors and scientists who themselves benefit from such funds.
House Republicans have sought to cut $1 billion, or about 3 percent of the funds, from the NIH.
Also at risk is the Small Business Innovation Research Program, which was championed by Senator Edward M. Kennedy and is up for reauthorization at the end of the month.
The program directs state agencies to set aside a portion of federal research funding for small companies, with much of the money coming from the Department of Defense.
Since its inception in 1982, Massachusetts has been an outsized beneficiary, also second only to California.
Massachusetts companies have received more than $4 billion, the report said.
Another sector in the crosshairs of budget cutters is clean energy.
About $450 million in federal funds have gone to Massachusetts in the last two years, helping to make the sector the state’s 10th largest, with 30,000 jobs, the report said.
Such funding has become a leading example of government overreach in these times of burgeoning deficits, say Republican leaders and budget analysts. Several high-profile closures of solar energy facilities - including
Evergreen pulled up stakes for China after receiving millions of dollars in tax breaks and subsidies from the state, and it went bankrupt last month.
Solyndra filed for bankruptcy after it was promised some $535 million in federal loan guarantees.
Daniel J. Mitchell, a senior fellow at the libertarian Cato Institute, said the Solyndra collapse should be a cautionary tale for those defending the clean energy industry.
“The so-called green energy stuff is wildly uncompetitive. The only reason a lot of this stuff exists, is it gives well-connected people an opportunity to stick their hands in the treasury’s pocket,’’ he said.
Markey disputes that, saying that while not every company is successful, the industry is growing.
Some analysts agree that severe cuts could batter that and other specific industries and stall the state’s overall economic recovery.
“We are very much an innovation economy, so cuts to things like basic research, health care research, scientific research would be damaging,’’ said Noah Berger, president of the Massachusetts Budget and Policy Center, which conducts nonpartisan research on the state budget.
Markey’s report is an opening salvo for the state’s industry groups and lawmakers.
It describes how much money has gone to public and private sectors of the economy, from teaching hospitals and military contractors to homeowners needing help paying their winter heating bills.
Representative Niki Tsongas, a Lowell Democrat, said that she is still studying Markey’s report but agrees on the need to protect research funds for small businesses.
“We all understand that we have an extraordinary challenge going forward, that the issue of the deficit and debt are very real, but I also think we have to have a process that acknowledges that it cannot be solely about cuts from a very small portion of the budget,’’ she said.
Members of the delegation have already met with Kerry to discuss ways to trim the debt and how cuts could affect Massachusetts. Massachusetts Secretary of Administration and Finance Jay Gonzalez said that he plans to work with the delegation and the White House, to minimize the impact of the push to trim the deficit.
There are two phases to the deficit-cutting process. First, Congress must make cuts totaling about $1 trillion in debt reduction over a decade.
In a second phase, the supercommittee must find ways to reduce the debt another $1.5 trillion. If it fails, $1.2 trillion in across-the-board automatic cuts go into effect.