Fiscal Cliff Could Hit Mass. Harder Than Other States
BOSTON (CBS) - If the so-called "fiscal cliff" becomes a reality in January, the economy in Massachusetts could take a bigger blow than other parts of the country.
Federal research dollars that come to the Commonwealth result in new industries and new jobs.
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"I think if you look at the Massachusetts economy in particular, we are heavily driven by innovation and innovation is driven by research and that is the return people get," UMass Amherst Vice Chancellor Michael Malone told WBZ-TV.
"It means new products, new jobs, somebody has to make them, somebody has to do the service, that is how the equation works."
But those numbers won't add up anymore if we go over the fiscal cliff.
Billion of dollars in cuts across the board will go into effect on January 1, 2013, unless Congress and the president can come to an agreement.
UMass Amherst officials believe they could lose up to $10 million in federal research funding.
They, along with 15 other leading research institutions across the state, have written a letter to Congressional leaders to make the case on why these cuts should not go into effect.
"The size of the economy we have here, and how broad the impact is of those changes would be, I actually think this is worse for a state like Massachusetts," " Sean Tesoro, Salem Five's President of Investment Services, told WBZ.
Some of the deepest cuts could come to military spending and that could impact 130,000 defense-related jobs in the Bay State.
At the Harry Miller Company on Albany Street in Roxbury, where workers stitch together industrial cases, covers, and tarps for the military, about a quarter of their work is defense-related.
"It could result in, in some employees not have having work, that is the hard truth," Miller said.
And then there is the medical community.
Massachusetts receives more federal research money per capita than any other state.
Congressman Michael Capuano believes the impact of such large cuts would be devastating here.
"Those funds will be gone and those doctors will start having to tighten their belts. There will be fewer people to work in the labs, and fewer people who feed the people who work in the labs. This is all fully connected," he said.
Reaching a deal won't be easy, and the local business community is very nervous about the forecast.
"The fiscal cliff is the monetary version of 'The Perfect Storm," Tesoro said.
CBSBoston.com will have an expert on call for a live Q&A Monday through Friday from 5:30 – 6:30 p.m. to answer your questions about the fiscal cliff.
The series "Inside the Fiscal Cliff" airs all week at 5 and 11 p.m. on WBZ-TV and at 5:55 a.m., 8:55 a.m., 12:21 p.m., and 4:55 p.m. on WBZ NewsRadio 1030.
