Administration's FY 2003 Budget Includes Investments in New England's Economy.

Business Editors

BOSTON--(BUSINESS WIRE)--Feb. 4, 2002

The Administration released its FY 2003 Budget today. The $2.13 trillion budget reflects an increase of approximately 9 percent over FY 2002 in discretionary spending. The majority of new spending in the budget is directed toward defense or homeland security.

Defense spending is proposed at $379 billion. "With the concentration of defense companies and subcontractors throughout New England, including BAE Systems, Raytheon, Sikorsky, Pratt & Whitney, General Dynamics Electric Boat Division, Newport News Shipbuilding and Bath Iron Works, the Administration's increased spending of $38 billion (11.6 percent) will provide billions of dollars to the New England economy in these uncertain times," says Jim Brett, President & CEO of the New England Council.

"The defense industry has long been an important segment of New England's economy. This support of defense spending not only helps our the defense industry, but also the public and private research and development enterprise which includes a variety of large and small employers throughout the region, " commented Mr. Brett.

"We are also pleased to see that the Administration has kept its pledge to double NIH R&D spending over five years with its final installment of $27.3 billion, an increase of $3.7 billion over last year. Continued support of NIH research activities is critical to New England's teaching hospitals, medical technology, bio technology and pharmaceutical companies and other facets of the region's innovation economy," said Mr. Brett. "In addition to investing in bioterrorism research, these funds will certainly play a crucial role in finding cures for disease, developing treatment options for patients and identifying factors that may contribute to illnesses."

"While supportive of many aspects of the President's budget, the Council is hopeful that funding will be restored or increased for a number of programs including the ATP program, LIHEAP and job training initiatives," said Mr. Brett.

Since its inception, New England has been a strong beneficiary of the ATP Program, receiving over $163 million for 74 projects throughout the region, over 10% of total national funding. The Administration's FY 2003 budget reduces funding for the Program by 42% to $108 million. New grants would be reduced to $35 million next year versus $150 million in years past.

"Likewise, LIHEAP spending is reduced by $300 million from FY 2002, with $1.4 billion in regular spending and $300 million in contingent funds. LIHEAP funds are critically important to New England's low-income population in meeting their basic needs, especially during the harsh winters associated with New England; it is, therefore, vital that the program be fully funded," said Mr. Brett.

Under the President's budget for the Department of Labor, there are spending cuts in programs under the Workforce Investment Act (WIA) including, adult employment and training activities, dislocated worker employment and training activities, youth activities and youth opportunity grants. While the Administration has indicated its support of job training through an economic security plan, the current budget cuts funding for a number of job training programs widely utilized in New England.

"The New England Council looks forward to working with the Administration and the region's Congressional Delegation on these and other programs important to the region," stated Mr. Brett.

The New England Council is a non-profit alliance of schools, hospitals, corporations and other private organizations throughout New England, working together to promote economic growth and quality of life in the six-state region.