GloucesterTimes.com, Gloucester, MA

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January 2, 2013

Local businesses hanging on 'cliff' talks

WASHINGTON — Legislation to negate the so-called “fiscal cliff” of across-the-board tax increases and sweeping spending cuts to the Pentagon and other government agencies headed to the GOP-dominated House Tuesday after bipartisan, middle-of-the-night approval in the Senate capped a New Year’s Eve drama unlike any other in the annals of Congress.

But while the measure cleared the Senate on an 89-8 vote early Tuesday, hours after Vice President Joe Biden and Senate Republican Leader Mitch McConnell of Kentucky sealed a deal, the fallout from any House action remained uncertain as of late Tuesday night.

And while much of the talk has focused on prospective tax hikes and general spending cuts, some Cape Ann businesses in particular continue to twist regarding the status of Defense contracts that had been pegged for so-called “sequestration,” across-the-board cuts as the so-called “cliff” of cuts loomed.

A total of nine Cape Ann businesses — from food wholesalers to engine parts manufacturers to computer programmers — held a total of 23 ongoing contracts with the U.S. Department of Defense, worth at least $9.2 million in 2011, according to data gathered by a nonprofit, non-partisan policy research group called Center for Security Policy.

Those were topped by Gorton’s of Gloucester, which is holding a deal worth more than $1 million to supply seafood for the department, while Gloucester engine parts manufacturer Bomco, Inc. held at least $189,000 in Defense contracts, according to the data.

The Senate measure approved early Tuesday would prevent middle-class taxes from going up but would raise rates on higher incomes. It would also block spending cuts for two months, extend unemployment benefits for the long-term jobless, prevent a 27 percent cut in fees for doctors who treat Medicare patients and prevent a spike in milk prices.

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