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Blumenthal, manufacturers, discuss potential impacts of government shutdown

By Jennifer McDermott

Published September 30. 2013 12:00PM   Updated September 30. 2013 12:26PM

Glastonbury — If the federal government shuts down for a couple of days, Connecticut will lose 300 jobs, according to economist Steven Lanza.

A three- to four-week closure would reduce overall economic growth in the fourth quarter by 1.4 percentage points, which would cost 2,000 jobs in Connecticut and $100 million in income associated with those jobs over the year, Lanza added.

The federal government will shut down at midnight tonight if Congress cannot agree on a budget. The Republican-controlled House passed a continuing resolution early Sunday to extend the current spending rates through Dec. 15 but it also delays the Affordable Care Act, something which Senate leaders said they will not agree to.

U.S. Sen. Richard Blumenthal, D-Conn., Lanza and several manufacturers gathered at HABCO Monday morning to discuss what a shutdown would mean for the state and its manufacturing industry particularly, since government contracts account for half, or more, of the business for many of these companies. Habco makes ground test support equipment for the aerospace industry.

Blumenthal said while he still hoped a shutdown could be avoided, he was most concerned about the potential impact on jobs and economic growth since it would impede the state’s rebounding from the economic recession.

HABCO President and CEO Brian Montanari said he has 41 employees, which is 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 get delayed or canceled because the government shuts down.

“We need as much as help as possible to add jobs to the Connecticut marketplace and not contract,” he said.

Defense contracts used to be 70 percent of their business, but Montanari said he worked to grow 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 who employ 166,000 people, he added.

Scott said that 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.

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.”

Blumenthal 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. He said he was leaving HABCO to return to Washington, D.C. to try to avoid the shutdown.

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

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