Cliffhanger: as deadline nears, dire effects predicted

HONOLULU (HawaiiNewsNow) - Congress is back, but the next fiscal cliff deadline is Friday, and the closer it gets, the more dire the effects of inaction appear.

"This is a totally self-inflicted crisis," said Sen. Brian Schatz Sunday. "There's still time, if cooler heads prevail."

Even a glance at data on federal employment in Hawaii makes it clear that the across-the-board federal spending cuts nearing could have a calamitous effect.

"That will undermine our capacity for readiness at Pearl Harbor," Gov. Neil Abercrombie said Saturday at the National Governors Association meeting in Washington D.C.

The Pentagon has a tentative plan to apply furloughs to 20,000 Hawaii-based civilian employees of the Defense Department.

"They were planning their budgets without any consideration of sequestration, because they thought it would never happen again," Rep. Colleen Hanabusa said Sunday.

Data collected in 2007 showed more than 86,000 federal jobs in Hawaii of which 54,000 were military, but adding civilian employees and dependents yielded 190,000 federally-connected persons, or about 15 percent of the state resident population.

The Pentagon has already said it will need to do furloughs at least one day a week for 800,000 civilian employees nationwide, sand one defense contractor, BAE, has already does some furloughs at Schofield Barracks.

"If that doesn't symbolize… what happens when we fail to meet our responsibilities congressionally, I don't know what does," Abercrombie said.

Republicans at the governors' conference made essentially the same point.

"I certainly join the chorus of voices that are calling for that administration and members of Congress to come together and find more responsible cuts," said Mike Pence, governor of Indiana, and a member of the House of Representatives in 2011.

The federal government spends $14 billion a year in Hawaii in 2007, 53 percent of it in wages and pensions, 17 percent in grants, and another 17 percent in procurement contracts. Offsetting this was $6 billion in federal taxes collected from people and companies in Hawaii, not counting corporate taxes paid in other states by companies with Hawaii operations.

Since the 1990s, the federal sector has been a smaller chunk of Hawaii's economy than it was before tourism exploded. The federal government's direct contribution to Hawaii GDP has been around 13 percent to 14 percent over the past two decades. In the 1970s it was 20 percent, and before then it was even more. But it remains a critical piece of the state economy.

The federal government owns almost 20 percent of all the land in Hawaii, and three quarters of it is controlled by the National Park Service, whose budget has shrunk in real dollars in recent years even before any sequester cuts. The military alone has more than 10,000 buildings to maintain in Hawaii. This doesn't count 15,000 units of military housing, including 4,000 at Schofield Barracks and almost 2,000 connected to Marine Corps Base Hawaii.

The administration said Sunday that fiscal cliff cuts would also cut off funding for 20 school system employees who help children with disabilities, while other cuts would affect crime fighting programs and a program that deliver meals to seniors.

Per capita federal spending is highest on Oahu because of all the military and federal agency operations there, but Kauai is second - more than $8,000 per person - because of the Pacific Missile Range Facility at Barking Sands.

While the focus of discussion of fiscal cliff impact has been on the military, it should be noted that less than 60 percent of civilian federal employment was military even in 2007. The Department of Homeland Security is the second largest federal agency in Hawaii and has thousands of Hawaii-based workers for transportation security alone. The FAA has already warned that a plunge off the fiscal cliff will oblige it to shut down more than 100 small market airport control towers nationwide, though Hawaii officials did not think the FAA would shut down the towers for island airports.

The federal government employs more than 800 USDA personnel in Hawaii, about 300 in the Justice Department including the FBI, and twice that many in the Interior Department. There are nearly 700 employees of the Department of Veterans Affairs in Hawaii, more than 100 who work for the Treasury Department, and more than a dozen in the State Department.

The Pew Center on the State reports that while Medicare and highway funding are exempt from sequestration, the remaining spending accounts for an average 6.6 percent of state revenue.

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