Sequester’s Impact in Fairfax County? TBD, Reston Connection, March 21, 2013

Local leaders say “uncertainty” biggest fallout of sequester so far.

By Victoria Ross

Fairfax County businesses have been feeling the chilling effect of the $87 billion across-the-board spending cuts triggered March 1st for several months.

In anticipation of the original “fiscal cliff” deadline at the end of 2012, apprehensive business owners had begun taking preemptive measures, such as tightening budgets, and implementing hiring and pay freezes.

“Small and large companies are taking more conservative approaches to hiring, and government contractors, a large segment of the Fairfax County economy, could see their contracts reduced or terminated,” said Sharon Bulova (D-at-large), chairman of the Board of Supervisors.

But what has rattled Fairfax County businesses is not specific cuts in the sequester, but the uncertainty of what the cuts will be and when they will take effect. . .

. . . “The Washington Area economy has grown tremendously thanks to Federal Government spending. In 2010, total federal spending accounted for nearly 40 percent of the region’s GDP,” said economist Stephen S. Fuller of George Mason University’s Center for Regional Analysis.

The region’s strength is also its “Achilles heel,” Fuller said and warned the area “faces a sea change” as federal spending decreases.

According to economic forecasters, the outlook is grim and grimmer. Most of the fiscal apocalypse, they say, is related to government-worker furloughs, which could begin as early as next week. In addition to eroding consumer confidence, the furloughs could trigger a domino effect that impacts everyone.

“If the feds are furloughed two days a week, no more housing purchases, no more dinners out, everyone hunkers downs, consumer housing starts to slow down and things come to a grinding halt and everyone is affected,” (Fairfax County Economic Development Authority President Jerry) Gordon said. . . . .

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