Delaney to business: Gird for sequester -- Gazette.Net


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The federal budget sequester is likely to occur and will hit Maryland businesses harder than similar companies in most other states, Rep. John Delaney told a group of primarily black business executives Monday.

That situation, in which $85 billion in budget cuts for fiscal 2013 will start taking effect March 1 unless Congress and the White House reach a deal, will have a drastic impact on local companies, said Janice Freeman, president of the African-American Chamber of Commerce of Montgomery County. Many businesses in the county and state contract with the federal government or subcontract with contractors, she said.

“That’s why we have to speak up,” Freeman, who owns a small real estate services business, said during the meeting with Delaney (D-Dist. 6) of Potomac at the Universities at Shady Grove in Rockville. About 30 people attended.

“Schools need to do more to prepare students for the workforce,” she said. “We have these needs, and we especially can’t be cutting education.”

Military contractor R4 of Eatontown, N.J., which has offices in Maryland, has a number of federal contracts that could be affected, said Sterling Crockett, an executive with R4 and founder of Sterling Construction Services of Rockville.

“Fortunately, a lot of work we do is considered essential,” Crockett said of R4’s military contracts.

If it occurs, the sequester will affect Maryland more than most states because it is the most dependent on federal government spending, after Alaska and Washington, D.C., Delaney said. The federal government needs to provide more incentives to create private jobs, said Delaney, the founder and chairman emeritus of commercial financing company CapitalSource of Chevy Chase who unseated longtime Rep. Roscoe Bartlett (R) in November’s election.

“I think Maryland will respond well to the challenge,” he said, adding that the state’s strengths in education, innovation and quality of life bode well for companies’ ability to grow private jobs.

Delaney was part of a group of Maryland’s congressional officials who issued a statement that a sequester would “significantly erode” operations at the 60 nonmilitary federal facilities and 17 military facilities in Maryland. Some 140,000 federal civilian employees in Maryland would face furloughs and potential pay cuts, and students and small businesses would be among those hurt by the cuts, officials said.

Infrastructure spending

Delaney also told the business leaders that he will introduce an infrastructure funding bill to develop a large financing mechanism for transportation, energy, communications, water and educational infrastructure involving public-private partnerships. U.S. corporations will obtain tax credits to invest in local infrastructure improvements, he said.

Montgomery County Executive Isiah Leggett (D) applauded the proposal, saying it will serve as a good complement to local business aid initiatives started by the county.

Meanwhile, Crockett, also CEO of Chesapeake Bay Roasting Co. in Crofton, voiced concerns over the Small Business Administration’s 8(a) program, saying its structure “forces [businesses] to stay small.”

That program helps small and minority-owned businesses obtain loans and other capital.

kshay@gazette.net