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Defense cuts could cost Virginia 123,000 jobs
Date published: 12/3/2011
Potential cuts to federal defense spending could cost Virginia about 123,000 jobs and half its projected economic growth.
That's according to a study by a George Mason professor.
Stephen Fuller, director of GMU's Center for Regional Analysis, studied the impact on Virginia of possible cuts to federal spending that might be triggered by Congress' failure to reduce the federal debt and deficit. He recently shared that study with the state House Appropriations Committee.
Fuller said the impact of potential federal spending reductions in Virginia depends on what lawmakers eventually cut, something that's not really known yet.
"Nobody knows where it's coming from; that's the problem," he said. "Our vulnerability is going to be a function of what gets cut back."
During this past summer's fight over raising the debt ceiling, lawmakers had agreed that if a supercommittee failed to make spending reductions, it would trigger automatic cuts to defense and other areas of spending.
That supercommittee failed to meet its deadline last month, and now Congress faces the prospect of the triggered cuts kicking in in 2013.
Those cuts include some $500 billion from military spending. Lawmakers are looking for ways to avoid such cuts, and they have some time in which to do so. But cuts at that level could have a severe impact on Virginia, where the military and defense contracting is a large part of the economy.
According to Fuller's study, Department of Defense spending in Virginia in 2008 was responsible for more than 900,000 jobs.
Overall, Fuller said, Virginia ranks second in the nation in total federal spending, and first in DOD spending. The state ranked first in federal procurement spending in 2010, bringing in about $58 billion in procurement dollars.
Total federal spending in Virginia has more than doubled in the last 10 years, to about $136 billion in 2010. Virginia has 2.6 percent of the nation's population but 4.2 percent of its federal spending.
Fuller's study said $1 trillion in DOD spending cuts over 10 years could cost Virginia 122,800 jobs and $7 billion in wages and salaries. It could cut the state's projected 2013 economic growth by 50 percent.
Most of the job and spending losses would be felt in Northern Virginia and Hampton Roads.
Chelyen Davis: 540/368-5028