* Military and impoverished vulnerable to spending cuts
* South Carolina city fears impact of Washington's
* Charleston is symbol of potential pain should talks fail
By Samuel P. Jacobs
CHARLESTON, S.C., Dec 9 For 37 years straight,
Joseph P. Riley Jr. has sat behind the mayor's desk here,
shaping this city and its budget.
On a recent afternoon, Riley, 69, reached for a draft copy
of next year's spending plan and wondered aloud about what might
get cut should politicians in Washington fail to find an
agreement this month, unleashing $600 billion worth of spending
reductions and tax hikes next year.
Hiring new police officers for the city of 123,000 could be
put on hold, Riley said. A new piece of equipment for the fire
department would have to wait. Sanitation workers might be in
"The thought that they would allow the economic harm that
would ensue if we went over the fiscal cliff is mind-boggling,"
said Riley, a Democrat who was elected to his 10th term last
Charleston, a beautiful city steeped in history and awash in
tourist dollars, would seem at first glance a world apart from
the harm that could be caused by the combination of spending
cuts and higher taxes. Economists predict its arrival could send
the United States hurtling back into a recession.
At its edges, however, Charleston harbors the people who are
most vulnerable to Washington's intransigence, making the city
an emblem of a country's worry and of the powerlessness people
feel in the face of Washington's indecision.
The sting of automatic cuts would be felt acutely by those
who work in the defense sector and the poor. They form two
prominent groups in Charleston County who may share little but
the knowledge that federal belt-tightening is less a nuisance
than an existential threat.
In South Carolina, defense spending accounts for $15.7
billion in annual economic activity - more than one in 10
dollars spent in the state - and nearly 140,000 jobs.
The Charleston area alone, which includes a large Air Force
base and a Navy facility, holds more than 66,000 defense jobs
and nearly half of the state's military economic activity,
according to a report released last month by the South Carolina
Department of Commerce.
While Charleston, like the rest of the state, has seen a
boom in military spending over the last decade, the area has the
state's second-highest concentration of people living in
poverty, according to 2010 U.S. census data. More than one in
four children live in poverty in the surrounding county.
From the anticipated cuts to the military to the shrinking
of the safety net, Charleston shows what's at stake should the
United States fall off the fiscal cliff.
A fast-talking engineer originally from Detroit, Michigan,
Rebecca Ufkes founded UEC Electronics with her husband in
neighboring Hanahan 17 years ago. Walking past employees in blue
lab coats assembling components for military vehicles and
commercial products last week, Ufkes described the chilling
effect the possibility of cuts have had on Charleston's defense
In September, Ufkes traveled to Washington as a part of a
lobbying effort organized by the Aerospace Industry Association,
hoping to impress politicians with the dangers facing her
200-person company and its competitors should the anticipated
$500 billion in defense cuts, over 10 years, come to pass.
She came away encouraged by her state's largely Republican
representation in Washington but frustrated by other lawmakers.
"South Carolina is a very pro-business state," she said.
"They are very keen on economics. It's just that we are only one
of 50 states."
Ufkes, 48, said she worries not only about the uncertainty
that has left defense contractors unsure where to invest but the
impending tax increases, which she said will put her company,
active in the commercial marketplace as well, at a disadvantage
against foreign rivals.
"Probably the solution is not going to be perfect for UEC,"
she said, "but I don't want it to be devastating. Compromise and
devastation are not the same thing."
With a mug declaring, "Failure is not an option," sitting on
her desk, Ufkes predicted that her company would make it, no
matter how devastating the cuts are.
"If we don't survive," she said. "I don't know who will."
Five miles (eight km) from Ufkes' cutting-edge electronics
manufacturer is the struggling North Charleston neighborhood of
Chicora-Cherokee, where Bill Stanfield and his wife, Evelyn
Oliveira, arrived fresh out of Princeton Theological Seminary 10
They founded Metanoia, a development organization focusing
on bettering the community by securing housing loans, planting a
garden, and running after-school and summer programs.
Through government services like AmeriCorps, the national
volunteer group, and funds from sources like the U.S. Department
of Housing and Urban Development, Stanfield said his group
received nearly a fifth of its funding from the federal
government last year.
With politicians facing immense pressure over limiting cuts
to entitlements like the Medicare health insurance program for
seniors and the Social Security retirement program, advocates
for the poor say they expect painful reductions in spending on
education and housing.
"I don't know if our housing program would survive,"
Stanfield, 39, said.
Cuts to education will hit South Carolina hard, where the
schools have bled money over the last five years.
According to the left-leaning Center on Budget and Policy
Priorities, South Carolina's cuts to education have been the
fifth largest in the country, slicing 18 percent off of
per-student spending during that period.
The Obama administration, which Republicans consider a
profligate spender, has felt like lean times in neighborhoods
like Chicora-Cherokee, Stanfield said.
"You know Mitt Romney said that people voted for Obama
because of gifts?" Stanfield said. "There's this misconception
that President Obama has been a gravy train of funding. There
was more funding under President Bush of these organizations
than under Obama."
'GAME OF CHICKEN'
Last month, Riley, the Charleston mayor, went to Washington
with a group of fellow city leaders, Democrats and Republicans,
to lobby the White House and Congress to save cities from
Vice President Joseph Biden and Democratic leaders from the
House of Representatives and Senate met with the mayors. House
Speaker John Boehner and other Republican leaders in Congress
declined their invitation, Riley said.
While Riley supports Obama's proposal to increase taxes on
income earned over $250,000, a sticking point in the
negotiations, he and other mayors cautioned that ending the
tax-free status of municipal bonds would strangle cities' access
to needed capital.
Riley returned to Charleston feeling like a deal, which
could prevent the harshest blows from hitting his city, its
residents and jobs, was in the offing. Now, he said, he is not
"It looks like it's a game of chicken," he said, "and there
are signals that they are going to go through with it."