U.S. Sen. Mark R. Warner (D-VA) today highlighted a new economic analysis revealing that Virginia would be hurt more than almost any other state from the sweeping automatic federal budget cuts scheduled to take effect in two weeks.
The new analysis, released Monday by economists Mark Vitner and Michael Brown of Wells Fargo Securities, identifies the greater Washington, D.C. region, which includes Northern Virginia, and Hampton Roads as regions which have the most to lose under sequestration. Yesterday's Wells Fargo report notes that continued political uncertainty over sequestration "has been a weight on economic growth" this past year. The Wells Fargo analysis also notes that Virginia has a high level of exposure to nondefense spending reductions ranging from homeland security to biomedical research. The analysis echoes concerns raised by George Mason University economist Dr. Stephen S. Fuller last fall, who forecasted significant potential job losses in Virginia due to federal budget cuts.
"It is frustrating that more people here in Washington do not have a sense of urgency about taking action to head-off these sequester cuts. The uncertainty already is having a real and negative impact on our economy: many Virginia families and businesses are pulling-back on their financial activity in anticipation of yet another self-inflicted wound to our economy courtesy of Washington," Sen. Warner said.
"Northern Virginia had been a bright spot in Virginia's slow but steady recovery from the recession, but economists have now concluded what most of us already anticipated: the partisan gamesmanship and dysfunction is having a negative impact on business investment, hiring, income growth and overall economic activity," Sen. Warner said. "In Hampton Roads, we've already seen the deployment of one Navy aircraft carrier delayed and the overhaul of another put on hold as the Navy tries to figure out how to balance our national security priorities with our fiscal challenges. In many cases, these difficult short-term budget decisions will end up costing taxpayers more because we're having to cancel contracts that include negotiated savings built-in to multi-unit purchase agreements. "
Sen. Warner, a leader since late 2010 of the Senate's "Gang of Six," has continued to work toward consensus on a broad, balanced and bipartisan plan to address deficits and debt. In recent weeks, he has worked to find consensus on a proposal to provide some flexibility to prioritize potential spending cuts within military and federal agency budgets while still achieving the overall targeted savings.
"There's a smart way and a stupid way to cut spending, and these across the board sequester cuts represent the absolute dumbest way to be conducting the nation's business. I continue to work with my colleagues in urging the White House and congressional leaders to at least provide enough flexibility for agencies to make more rational budget decisions," Sen. Warner said. "And looking beyond the March 1st sequestration and the March 27th budget deadlines, I still maintain that we should be able to find a way to come together to craft a balanced, bipartisan approach to address our deficit and debt challenges. We need to raise more revenue, we must reform and strengthen our entitlement programs, and we need to make smarter, more targeted spending cuts. The sooner we can come together on a "grand bargain,' the sooner we can remove this cloud of uncertainty over an economy that otherwise appears ready to take-off and grow again."