Sequestration could hit Washington area with recession, economist warns
The Washington metropolitan area could see a devastating recession from federal cuts associated with sequestration, an economist is warning.
Sequestration -- across-the-board cuts to the federal budget that will take effect in January if lawmakers can’t agree on an alternative -- would result in major job cuts in Washington, Northern Virginia and Maryland, according to Stephen Fuller, director of the Center for Regional Analysis at George Mason University, who spoke to WTOP.com.
The Washington region receives 20 percent of federal payroll and procurement money, WTOP reported, and sequestration job losses in the area could affect 65,000 federal workers and 96,000 contractors.
"It's something you don't even want to draw a picture of because it's too scary," Fuller told WTOP.
He wrote about the impact that defense cuts would have in a paper released in July by the Center for Regional Analysis. The study was commissioned by the Aerospace Industries Association, a trade group for military contractors.
Fuller’s analysis has come under some criticism from other defense experts. Peter Singer, director of the 21st Century Defense Initiative at the Brookings Institution, wrote that the defense industry may have been overstating its job losses. Another report released by the Project on Government Oversight challenged the notion that the size of the contractor workforce is linked to the federal budget, noting defense contractors had been laying off workers during boom periods.
“There’s ample evidence to say there is an overreaction to what this will mean in terms of jobs for government contractors,” Ben Freeman, a researcher at POGO, told Government Executive earlier this month.
Still, contractors are planning for the worst. A spokesman for Raytheon Co. told Government Executive that while they did not know the exact number of cuts from sequestration, the company will follow the federal government’s lead.