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UMass studies fuel the debate on defense cuts

WASHINGTON - Lawmakers and defense industry officials warn that further mandated cuts to the Pentagon would decimate the economy. Their opponents counter that unnecessary defense spending is destructively inefficient.

To prove their cases, both groups point to studies from the University of Massachusetts.

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As a result, two institutes at the Amherst campus have found themselves in a broiling debate that could spill from Capitol Hill into the presidential campaign.

The Donahue Institute, with funds in part from Waltham defense giant Raytheon Co, detailed the thousands of jobs at risk from defense cuts across the Northeast. Those findings, updated in February, are being wielded by powerful interest groups and such members of Congress as Senator Scott Brown, Republican of Massachusetts, in a bid to head off additional cuts.

A separate study, completed by the UMass Political Economy Research Institute and paid for by Ben Cohen, founder of Ben and Jerry’s ice cream, makes a detailed case for why investments in education, clean energy, or health would create far more jobs than defense. Itsdata is being cited by think tanks that argue the nation should only spend what it needs for national security and not rely on the Pentagon as a jobs program.

“The Donahue study is correct,’’ said Lawrence Korb, a former Pentagon official at the liberal Center for American Progress who has advocated for deeper defense cuts. “If you cut defense, people are going to lose their jobs. But defense spending is not about jobs; it is about national security. If you want to create the most jobs, the [other] UMass study shows that defense is not the best way to do it.’’

The analyses have been bandied about as Congress discusses whether to overhaul the Budget Control Act of 2011, which mandates nearly $1 trillion in defense cuts over the next decade. Half have already been proposed by the Pentagon, and the rest would be across-the-board and would automatically take effect starting next January. This second round of cuts, included after a congressional committee failed to agree on a deficit reduction plan, are the crux of what is expected to be an intensifying debate.

‘This is a time for serious dialogue among national security experts, not unproven hypotheses from economists with a blind eye to the threats our war fighters face on a daily basis.’

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A chorus of Democrats and Republicans in Congress is calling for nullifying these cuts, but it remains in doubt whether both parties can come to a budget-neutral agreement that would find offsetting reductions elsewhere, especially in a presidential election year.

The Obama administration continues to wrangle internally over what to do. The Pentagon has said its across-the-board nature would upend the military’s ability to execute its strategy and has called for them to be overturned. The president, meanwhile, has insisted that he would sign legislation to repeal the cuts only if it came with tax increases on the wealthiest Americans to pay for it.

The authors of both studies expressed surprise that their work has become fodder for a rancorous debate but note that they were doing similar work with different results.

“Like a lot of universities, you end up working with different clientele,’’ said Martin Romitti, director of economic and public policy research at the Donahue Institute, which does work for private and public clients. “Defense has become a recurring theme for us.’’

As for the researchers at the Political Economy Research Institute, he said, “they are taking up the cause of the green economy, education, health care.’’

Those conclusions, published late last year, found that for every billion dollars spent on defense, between 50 to 140 percent more jobs would be generated if that money were invested in education, clean energy, or the health care industry.

After an extensive survey of various businesses, the authors calculated the inputs, or the items that a business would spend money on - such as labor, materials, land, and energy - and then determined the outputs - namely, what they would produce, according to Robert Pollin, codirector of the institute and principal author.

Then they estimated both the jobs that would be created, as well as any indirect employment, he explained, “like the direct activity of building a warship versus running a school.’’

“You spend the same, and you will get differences in terms of overall employment,’’ he said.

Miriam Pemberton, a research fellow at the liberal Institute for Policy Studies in Washington, believes the study adds a critical layer to the debate over spending.

“What we need to do is have a debate about where our economic engine is going to come from,’’ she said. “That involves investments to create jobs.’’

The study by the Political Economy Research Institute has drawn pointed criticism from defense lobbyists for being out of touch. The Aerospace Industries Association, which represents the largest defense contractors, argues that the debate in Congress is not about redirecting federal spending but slashing it.

“While it may be 100 percent accurate, it is not relevant because the Budget Control Act doesn’t contemplate retasking money, just taking it away,’’ Daniel N. Stohr, a spokesman for the group, said of the Political Economy Research Institute study.

The group’s president has been more pointed.

“This is a time for serious dialogue among national security experts, not unproven hypotheses from economists with a blind eye to the threats our war fighters face on a daily basis,’’ Marion C. Blakey, president of the Aerospace Industries Association, wrote of the study’s findings.

Yet the association has focused much of its own lobbying campaign on jobs, not on national security. Last week, Blakey said they will devastate the US economy.

The planned cuts, if they take place, would bring the Pentagon budget roughly in line with 2007 spending levels.

The Donahue Institute tallied the amount of defense contracts across New England at $29 billion in 2010. It also found substantial growth in the sector in Massachusetts during the last decade, from $5 billion to $15 billion in investment, accounting for an estimated 115,000 jobs in the Bay State.

Senator John F. Kerry, a Massachusetts Democrat, cited the Donahue Institute’s latest findings in February when calling for a bipartisan agreement to stave off defense cuts.

“These cuts don’t spare the investments in Massachusetts that we know are vital, and they do significantly impact our defense industry,’’ Kerry said.

The institute is working on another study on defense jobs to be published in June; that one is being funded by both private and public institutions across the region, Romitti said.

Like many academic studies, the ones from the two UMass institutes must be seen through the lens in which they were approached, said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University, who has done related research for the defense industry association.

“They suffer from the same deficiencies,’’ he said. “They are one-sided.’’

Bryan Bender can be reached at bender@globe.com.
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