At long last the dreaded apocalyptic event known as
sequestration is finally at our doorstep, and our local and state leaders are
pulling out all of the stops to make sure it doesn’t happen.
For those of you who have haven’t been following this story,
sequestration is the term used to describe the estimated $1.2 trillion in
automatic federal spending cuts that will go into effect on March 1st,
unless Congress takes action to prevent or delay them. Half of these cuts will affect domestic
programs, and half will affect military spending.
Virginia, with its heavy reliance on the defense industry,
and Northern Virginia in particular, would be particularly badly damaged by
these cuts.
The cuts could also have all sorts of negative unintended consequences for the overall health of the US economy. For example, the President
recently warned that sequestration could lead to meat
shortages across the country, due to cutbacks in meat inspectors.
On Monday Virginia Governor Bob McDonnell wrote a letter to
President Obama, and Virginia’s congressional delegation urging them to do
everything possible to prevent sequestration from occurring. The letter also warned that sequestration
could force the state back into a recession.
To make matters worse, evidence is mounting that the
uncertainty generated from the mere prospect of sequestration is already
starting to damage the local economy.
According to one executive from BAE Systems, this “cloud of
uncertainty” from sequestration is already having a
major impact on the company’s ability to use its capital and make
investments in facilities, jobs and developing new products.
So what is going to happen March 1?
If I were a betting man I would say Congress will vote to
kick the can further down the road … all the way until the next election.
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