The Sequester Road Trip
It’s here: the “sequester” – the $85 billion across-the-board federal budget cuts – is going into effect. With the White House and Congress unable to avoid the draconian cuts, it begs the question: how will these cuts, called “sequestration”, affect not just only Washington, but local communities?
When you look at the fine print, the big picture becomes clear: these cuts will have a significant impact on the states—and on the daily lives of many Americans—in the months ahead.
Cross the Potomac from Washington, DC into Virginia. The Old Dominion State’s large federal workforce and heavy emphasis on defense will be one of the most vulnerable to the sequester. Estimates suggest that Virginia could lose over 200,000 jobs. As well, the state could suffer a gross state product loss of $10.5 billion just as a result of the defense cuts. Already the Navy has already delayed some projects and cancelled airshows because of the impending cuts. In Virginia “sequester” is becoming synonymous with “recession”.
Next, hit Interstate 81 to Interstate 64 until you get to St. Louis, a city that would be particularly hard hit by the cuts. A recent analysis by Wells Fargo Economics found that the city would be considerably affected by the sequester because it has “outsized exposure to the aerospace industry and will see growth slow if the military purchases fewer fighter jets, missiles and helicopters”. At the state level, Missouri’s credit rating could be hurt as well. Earlier this month, Moody’s changed Missouri’s Triple-A rating to negative from stable because of the state economy’s strong linkage to the federal government. Lower bond ratings would result in an increase to interest rates and the cost of borrowing.
Then head west and take a right at Denver, winding up through Wyoming and into Yellowstone National Park. Yellowstone, along with the nation’s other national parks, won’t be immune from the sequester either. According to the National Park Service (NPS), sequestration could reduce or delay seasonal hiring. It could also impact other operations like visitor access. In all, the NPS estimates that at Yellowstone the cuts will affect 78,000 visitors, reduce revenues by more than $150,000 and negatively affect the livelihoods of those who do business around the park.
Finally, take Interstate 90 to Washington State until you hit Olympia, the capital. Although it’s nearly 3,000 miles away from the nation’s capital, the Evergreen State will still feel the impact of the sequester. In recent years, federal spending has accounted for nearly a quarter of the state’s budget. State officials estimate that the loss of $118 million in federal grants could lead to 5 to 12 percent cuts in services at the state level, including special education and social service programs.
Sequestration is a unique thing: a law so devastating it was never intended to pass. It was meant to spur compromise in Congress, forcing legislators to agree on a path to reduce our national debt. With the current state of play in the nation’s capital, it’s not surprising that these extensive budget cuts have only spurred more dysfunction and discord in Washington. But dysfunctionand discord won’t stop the impacts that will reverberate across the river from Washington, and across the country.
Jessie Daniels is a Truman Security Fellow.