Tim Kaine came to Merrifield today to hear defense contractors’ fears about sequestration, the “fiscal cliff” that could cost Virginia 207,000 jobs and $10.6 billion in lost labor income if Congress does not resolve its budget impasse. What Kaine heard was not so much concern about the pending devastation of the Northern Virginia economy as a litany of complaints, suggestions and observations about the federal contracting process.
Acronyms flew as representatives of small contractors and the consultants who advise them complained that the contract-awarding process is so lengthy, uncertain and mired in what one consultant called a “climate of fear” that it is hard for small contractors to survive.
Kaine soldiered gamely on, noting that as Mayor of Richmond and during his terms as Virginia Lieutenant Governor and Governor, he had learned the intricacies of the procurement process at both the municipal and state level. He vowed to do the same if elected to the the U.S. Senate in November. Kaine said that when he became Governor, 13 percent of Virginia’s procurement contracts were with small business, a figure that grew to 43 percent by the end of his term.
Returning to sequestration, Kaine said it is “a terrible indictment of Washington and Congress that nobody’s willing to compromise even with the prospect of a fiscal cliff.” He said the Democrats and Republicans are “playing chicken with each other, holding workers and businesses hostage.”
The primary issue is that “we spend $3.6 trillion but only take in $3.2 trillion, so we have to close that gap in some way.” Kaine said his Republican opponent, George Allen, proposed to close the gap through cuts in the budget.
“A better way is to find revenues and make investments that grow more revenue — so you close the gap by growing revenue,” said Kaine, advocating infrastructure inestments including road, rail, transit, broadband and water and sewage systems.
“I’m an infrastructure person,” Kaine said. “These are the kinds of investments our competitors are making. When you make infrastructure investments, you hire people right away and put them to work, plus you get an asset that you can use for 50 or 70 years.”
The most important step for Congress, which is currently on vacation, is to reach accord about the Bush tax cuts, which are set to expire at year’s end, Kaine said.
“That will dictate how big the gap is. If all the cuts are permanent, the gap is bigger. If you say you will never raise taxes, then you have picked the option of dramatic cuts” in federal spending. “You need a combination of cuts and revenue. If you are only cutting, you’re making a mistake,” Kaine said.
Kaine’s proposals landed with a thud over at Republican headquarters, where Del. Tim Hugo (R-Fairfax) said Kaine “wants to use these harmful defense cuts to negotiate higher taxes on job creators during a struggling economy. Fairfax County residents can’t afford six more years of Tim Kaine’s record for tax hikes and Washington deals that jeopardize our jobs.”
“What the Senate needs more than anything is the fresh and creative thinking that Tim Kaine will bring. With over 200,000 jobs on the line in Virginia, and the economic shifts due to the drawdown, and the impact of the sequester looming nationally, Governor Kaine’s experience in approaching fiscal challenges in a balanced way is sorely needed in Washington,” said Varun Nikore, a defense contractor who attended todayâ€™s roundtable in a statement after the roundtable at the offices of SoBran, Inc.
Kaine’s proposal for ending the budgetary impasse is for Congress to get back to work, a suggestion Allen has also made at each of his stops.
“Folks in Congress say they’re not going to do anything until after the election. My response is, ‘You’re still getting a paycheck.’ Uncertainty is causing stasis. They’re simply not doing their job. On the budget side, the only way to deal with it is to find accord on the Bush Tax cuts,” Kaine said.
“I say let them (the Bush tax cuts) expire over (for those making over) $500,000. This would produce deficit reduction over ten years,” Kaine said.