RI Fiscal Cliff: defense spending

PROVIDENCE, RI – All this week we're looking at what's vulnerable in Rhode Island should the U.S. government fall over the so-called "fiscal cliff" triggering spending cuts and tax hikes. While it's unclear whether lawmakers on Capitol Hill will come to an agreement before the end of the year, the defense budget is one area facing across the board cuts. There are some 12-thousand jobs in Rhode Island tied to defense contracts. Here's a look at how cuts to defense could hurt the Ocean State.

A recent study out of the University of Massachusetts finds that in 2011, Rhode Island received more than $470 million in contracts from the Department of Defense and Homeland Security. Rhode Island contractors make communications and detection equipment, like Raytheon's underwater sound equipment.

And then there are the submarines being made at Quonset, says US Senator Jack Reed. "A lot depends really where you are and what you do. I would be presumptuous to try to manage Electric Boat," says Reed. "Our effort first is to ensure we continue to build two submarines a year."

Reed says the Pentagon has little flexibility in where to cut since it has to make sure troops are cared for and training is maintained.

Congressman Jim Langevin says while he's concerned for major contractors like Electric Boat and Raytheon he's also worried about small business along the supply chain. "Sequestration I believe could be devastating to small and medium sized businesses that do business with the federal government, DOD, as in any sector as well as those that provide capabilities and materials for larger contractors."

The UMass study found direct and indirect work done for the defense industry created a 1-point-7 billion (B) dollar economic boost for all of New England.

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