Posted Online: Feb. 21, 2013, 10:00 pm

Chamber to be in DC on sequester day

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By Jonathan Turner

Last fall, when the Quad Cities Chamber of Commerce scheduled its annual trip to Washington, D.C., it had no idea the 30-plus member delegation would be there on "fiscal cliff" day, March 1.

That's when $1.2 trillion in automatic federal spending cuts (half of which affect non-combat military) start to take effect, with $85 billion in cuts enacted by the end of this fiscal year.

"We thought someone would have done something about the sequester by then," chamber CEO Tara Barney said Thursday of the long-feared "sequester" of massive budget cuts, which would directly impact the Rock Island Arsenal.

The sequester was put in place by Congress as an incentive to reach a long-term deficit reduction plan in 2011, which didn't happen.

While in Washington, D. C. on Feb. 27 to March 1, the chamber group will meet with elected representatives and government staff, including officials with the Department of Transportation and the Pentagon.

Priorities include preventing sequestration, funding for a new Interstate 74 bridge, passenger rail between Chicago and the Quad-Cities, bolstering local defense-related jobs, avoiding cuts in Medicaid and enacting spending and revenue changes that promote economic stability.

"No one knows how big a check has to be that they have to write. That is the huge additional weight that's been put on business' shoulders," Ms. Barney said of uncertainties over health-care reform, spending cuts and tax changes.

"On top of a challenging workers comp situation, the tax situation of many varieties, it's already a challenging dynamic," she said."I was just with a business today, and they said, 'Our balance sheet looks great, I'd love to hire more people, but I'm not going to do it until I have a better sense of the uncertainties.''"

The nonpartisan Congressional Budget Office has estimated that sequestration could result in 750,000 lost jobs this year. The Pentagon is looking at furloughing employees one day a week, which would cut salaries by20 percent.

"That's a pretty measurable impact on our community," Ms. Barney said of Arsenal workers."It will have a very dampening impact on recent prosperity."

Planned cuts to Medicaid would hurt local hospital systems and local quality of life, Ms. Barney said, adding that as health-care coverage is expanded, the number of uninsured is reduced, but cuts in Medicaid payments affects the ability of hospitals to provide charity care.

The fiscalchallenge of uncertainty on the federal level is mirrored with budget uncertainty in Illinois, Ms. Barney said. There is a proposal in Springfield to pay for pensions by extending Illinois' temporary, 2 percent income tax increase until the $130 billion pension debt has been eliminated.

Gov. Pat Quinn wants to raise the state minimum wage (now at $8.25 per hour), which the chamber opposes, Ms. Barney said.

"Itdrives business expansion. If a retailer is looking at the cost of doing business, when they're ready to invest, it's going to come more quickly to the state with better personnel and tax costs," she said, adding that Iowa's minimum wage is $7.25 (same as the federal).

Projects such as funding a new $1 billion I-74 bridge (costs shared among the two states and federal government) and passenger rail will help the economy by putting people to work, she said.

"Wewill keep shining a spotlight on making the I-74 bridge corridor more fluid, an integral part of the highway system and passenger rail moving ahead promptly," Ms. Barney said. Cuts such as sequester threaten those projects, however, she said.

Chamber trips like this (and to Iowa's capital in early February, and Springfield March 19-20) give the public and private-sector participants a chance to "personalize their communications," and gives elected officials the chance to get to know local businesses better, Ms. Barney said.

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