Federal budget cuts spread damage across region

WASHINGTON – How the federal budget cuts scheduled for the end of the year will impact the D.C. region is a question people are taking more seriously as the deadline gets ever-closer.

The automatic cuts, mandated by the failure of last year’s congressional deficit “supercommittee” to strike a budget deal, would require an across-the-board cut of 9 percent to most Pentagon programs and 8 percent in many domestic programs. The process of automatic cuts is called sequestration, and the administration has no flexibility in how to distribute the cuts, other than to exempt military personnel and war-fighting accounts.

The cuts, combined with the expiration of Bush-era tax cuts at the end of the year, have been dubbed the “fiscal cliff.” Economists warn that the one-two punch could drive the economy back into recession.

Stephen Fuller, director of the George Mason University Center for Regional Analysis, says the split of the $109 billion in cuts across both military and domestic spending “sort of spreads the damage across the region.”

“The District of Columbia is very vulnerable, suburban Maryland has federal employees and federal offices, Northern Virginia has many more federal contractors,” he says.

Fuller says slowed government spending has already created issues for contractors, and limited federal job growth in Maryland.

A White House report issued Friday warned the spending cuts would be “deeply destructive” to the military and core government responsibilities like patrolling U.S. borders and air traffic control.

An example of the potential impact of cuts that’s been regularly cited is the reliance of Northern Virginia on government contracting.

“Fairfax County ranks number one in the country among all counties [with] $25 billion in federal procurement contracts to businesses there. [It] puts it in a vulnerable position, and Northern Virginia more broadly,” Fuller says.

Maryland and D.C. would face the loss of federal employees, or having some of those current feds hitting the unemployment rolls.

The Associated Press and WTOP’s Max Smith contributed to this story. Follow WTOP on Twitter.

(Copyright 2012 by WTOP. All Rights Reserved.)

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