VA could lose 200K jobs if Congress can’t cut budget deal
Washington, D.C. (WTVR) – Virginia could lose more than 200,000 jobs if Congress can’t agree on a budget by the end of the year, according to a report from a defense industry group.
Virginia would be among the hardest hit states if the automatic spending cuts kick in on Jan. 2. The budget bill would cut total federal spending by more than $1 trillion over the next decade–potentially impacting more than 2 million jobs nation-wide.
The report, released Tuesday by George Mason University and commissioned by the Aerospace Industries Association, a group that lobbies for many companies in the defense industry, estimates that 1.09 million private-sector and federal jobs connected with the Department of Defense would be lost, and nearly as many nondefense jobs.
The report, titled “The Economic Impact of the Budget Control Act of 2011 on DOD and Non-DOD Agencies,” examines the ripple effect from the potential cuts, known as sequestration, that resulted from a congressional deal struck last fall during negotiations on the current budget deal.
Those result of those negotiations was that Congress and the president were unable to agree on a deficit-reduction plan. If there is no agreement by January 2013, the Pentagon and other federal agencies would be forced to cut spending by $1.2 trillion over the next 10 years.
The Department of Defense would receive most of the cuts, $492 billion, while the other federal offices would share the remainder of the cuts, totaling $708 billion.
According to the report, this would mean the loss of 225,464 jobs in Virginia and more than $10 billion in labor income. The Commonwealth would rank second only to California in terms of impact, which faces a loss of more than 225,000 jobs.
While both Republicans and Democrats agree they want to avoid sequestration from occurring, they have yet to cut a budget deal. Democrats are insisting the budget include tax hikes on the rich, Republicans are resisting all tax hikes, citing the recovering economy.
Virginia Governor Bob McDonnell is expected to hold a press conference this afternoon to discuss the ramifications sequestration could have on the state. He’ll be joined by the Republican leaders of Virgina’s congressional delegation at the U.S. Capitol Building at 2:30 p.m.
CNN Wires contributed to this report