As US budget cuts looms, capital city grows restless

The question facing Americans no longer seems to be when or whether the budget ax will fall, but how hard. And in the US capital region, the impact of looming spending cuts will be deepest of all.

"They're worried about it, waiting to see what happens," said Douglas Thomas, who shines shoes in the Ronald Reagan Building that houses government and private sector offices a few blocks from the White House.

His customers bemoan the possible furloughs that could see hundreds of thousands of federal workers forced into four-day work weeks beginning March 1. And when they get pinched, so does Thomas.

"Anytime something affects the government, with me being in this building, it hurts my business," he said. "But I've got to go with the flow."

Welcome to the sequester, that lurching monster in the form of massive, across-the-board cuts made into law in 2011 that is expected to wake from its 18-month slumber next month.

It was designed to be so painful that Congress would agree to alternative ways to bring down the ballooning debt.

But lawmakers and President Barack Obama have failed to reach a solution, and $85 billion in indiscriminate cuts to domestic and military programs are about to kick in, meaning a likely downturn in a capital region that had weathered the recession better than most American cities.

Uncertainty looms for virtually every federal office. The FBI will lose up to 1,000 agents, air traffic controllers and airport security personnel will be shed, food inspectors and loan adjusters could be shown the door.

Even Congress is not immune, with House Speaker John Boehner warning that his own staff could be cut.

And with agencies being told to tighten their belts by up to 13 percent this year, even government and military employees and contractors who hold onto their jobs in the Washington area are set for a jolt.

Walter Tejada, chairman of the board of Virginia's Arlington County just across the Potomac River from Washington, warned of a nightmare scenario in which job cuts and lost wages could send the city and its suburbs into a tailspin.

"We rely heavily on the federal government," Tejada said in an interview, adding that Northern Virginia "might be ground zero" for the effects of sequester.

"There are a lot of unknowns."

Under the plan, some 800,000 Defense Department civilians would be forced to take unpaid leave one day a week from April through September.

Defense workers in Washington, Maryland and Virginia would lose a combined $1.1 billion in wages due to the furlough -- money that will no longer feed into the local economy.

Even worse, said Stephen Fuller of the Center for Regional Analysis at George Mason University, is the impact on federal procurement for work done in the metropolitan area.

If such procurement -- which stood at $75.6 billion last year -- shrinks by eight percent in 2013 as some expect, that would mean a $6 billion hit to the region.

A total of 331,000 jobs in Washington, Maryland and Virginia could be lost as a direct and indirect result of the cuts, he forecast.

Among the biggest losers will be the National Institutes of Health in Bethesda, Maryland, the world's largest source of medical research funding.

It stands to see $1.5 billion slashed from programs across the board, from cutting-edge cancer therapies to Alzheimer's research, resulting in fewer resources for some of the medical world's brightest young minds.

"With the decline in NIH funding, my department will not be able to hire or support these creative young scientists, and a generation of innovators may be missing," said Nobel Prize winner Carol Greider, director of molecular biology and genetics at Johns Hopkins University.

No industry in the region will be hit harder than defense, and nowhere will the military be targeted as harshly as Norfolk, Virginia, about 130 miles (210 kilometers) to the south.

"We are at the tip of the spear here, and the pain level will be acute," Congressman Scott Rigell, whose district includes Norfolk, told AFP.

Defense contractors in and around Norfolk began tightening hiring six months ago in anticipation of the cuts, he said.

The sequester is already affecting Rigell's district. The USS Harry S. Truman had been scheduled to head to the Middle East earlier this month from its port in Norfolk, but the deployment was put on hold due to budget uncertainty.

--

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