Impact of cuts on area unclear
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Fredericksburg-area economic development directors say the fear and uncertainty surrounding sequestration has caused employers to delay new investments, but it remains unclear how hard the federal cuts could hit the local economy.
A large percentage of the budget cuts would come from defense. That could hit regions that are heavily dependent on defense and federal contracting work, such as the Fredericksburg area.
Each federal department would also handle the cuts differently, so it’s difficult to quantify the exact impact on the economy should sequestration take effect. But with so many area residents commuting to federal jobs in the Washington area, furloughs would force many to tighten their personal budgets.
The uncertainty surrounding what comes next has had some effect locally, economic development directors say. Some companies have put off hiring and investing in their businesses until they get a better sense of what the rules will be going forward, said Spotsylvania County Economic Development Director Tom Rumora.
Fredericksburg Economic Development Director Karen Hedelt believes the economic recovery that has started to take hold locally has been held back by the sequestration cloud, as people are more careful with their spending and companies hold off making new investments. But nobody seems to really know the exact impact that the cuts would have, said King George County Economic Development Director Nicole Thompson.
Should the cuts go into effect, Caroline County would probably be less affected than the remainder of the Fredericksburg region because of its lesser dependence on federal spending, said Caroline Economic Development Director Gary Wilson.
MILITARY FACES BIG CUTS
Area military installations are bracing for cuts in programs, personnel and future operations.
“Across the military, sequestration will impact the military’s training and readiness, as noted during the Army chief of staff testimony” in a speech in Washington last month, said Michael Meisberger, a spokesman for Fort A.P Hill.
Gen. Raymond T. Odierno said, among other things, that forces deploying to Afghanistan through next year could be delayed, because of expected cuts in training funds.
The Department of Defense is facing the prospect of $1.3 trillion in reductions. It has already agreed to about $800 billion in cuts; sequestration would add another $500 billion.
Meisberger said that, at the Army fort in Caroline and Essex counties, “We have not yet seen any change” in numbers of troops coming to train at the base, “and we continue to engage with and monitor the situation for our traditional training partners as well as our projected customers.”
Gary Wagner, spokesman for the Naval Support Activity South Potomac, the host command to the Naval Support Facility Dahlgren, said officials there are waiting for more information.
“The extent and type of budget-cutting measures will vary from one command to another,” depending upon where they get their funding, he said. “Of course, we know there will be impacts,” such as furloughs for federal employees.
“After Friday, we’ll have a clearer picture of what we’re dealing with. The bottom line is that we’re not foreseeing closing anything, though we may have reduced hours of operations for certain programs.”
Marine Corps Base Quantico is in a similar situation.
Gen. James F. Amos, commandant of the Marine Corps, has said that the sequester could put off the deployment of two expeditionary units. Other consequences could include grounded fighter squadrons and scaled-back training.
EASING THE COMMUTE?
Sequester reductions would probably leave roads and rails in the area less crowded.
AAA says federal workers make up 13 percent of the Washington-area workforce. Many of those commuters come from the Fredericksburg area and use Interstate 95, by car, van or bus. Thousands also ride the Virginia Railway Express.
“The morning and evening commutes to the daily grind could look like it does on any of the 10 federal holidays in the Washington metro area or on Fridays, when federal workers use their flex-time schedules or compressed workweeks to take time off,” AAA Mid–Atlantic’s John B. Townsend II said in a release.
While the cuts would impact hundreds of thousands of workers, it still amounts to a small percentage, Townsend said.
AAA estimates that “450,000 to 700,000 public- and private-sector workers in the Washington metro area could be furloughed or lose their jobs because of the projected sequestration cuts. However, those impacted workers account for a fourth of the number of area residents [2.8 million people] who commute daily in the region.”
A third of all those commuters use rail and buses, AAA said. There would likely be drops in the numbers of those commuters, too, if the cuts happen.