Region could see ‘devastating recession’ with sequestration

Budget cuts would affect domestic programs, as well as defense. (WTOP/Tiffanie Reynolds)

Darci Marchese, wtop.com

WASHINGTON – The D.C. region enjoyed a prosperous job outlook even through the economic downturn, but new research says it could come to an end.

Blame the projection on deep and automatic cuts, known as sequestration, which would slash the federal budget if Congress doesn’t act in the next few months to stop it. Sequestration is set to take effect Jan. 2, 2013.

Stephen Fuller, director of the Center for Regional Analysis at George Mason University, says the D.C. region would be greatly impacted, mainly because of the federal payroll and procurement dollars Maryland, Virginia and D.C. receive from the federal government.

The entire region gets more than 20 percent of all federal payroll and procurement dollars, and if the cuts are in proportion to that, Fuller says, things could get ugly.

“It’s something you don’t even want to draw a picture of because it’s too scary,” says Fuller.

However, Fuller crunched the numbers and found if the region sees $50 billion slashed right off the top, “we’re looking at the loss of about 65,000 federal jobs in this region and about 96,000 federal contractor jobs.”

Fuller says it could lead to a “devastating recession” in the area. He says a ripple effect could also result in loss of more jobs outside the federal government.

However, some critics say some of the projections go too far.

Gordon Adams, professor of international relations at American University and former Office of Management and Budget official, told WTOP’s sister station, Federal News Radio, “indirect” and “induced” job losses are anything but certain.

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(Copyright 2012 by WTOP. All Rights Reserved.)


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