Study: Sequestration Could Wipe Out as Many Jobs as Recovery Has Created

The study, conducted by Dr. Stephen Fuller of George Mason University and Chmura Economics & Analytics, forecast a loss of 2.1 million jobs during the first year after sequestration is implemented, equal to the 2.1 million jobs created since economic recovery from the recent recession commenced in mid-2009.

The Aerospace Industries Association released a study on last week estimating that if the sequestration provisions of the Budget Control Act are triggered on Jan. 2 as currently legislated, the number of jobs lost would be about as great as the number created during the time President Obama has been in office.

The study, conducted by Dr. Stephen Fuller of George Mason University and Chmura Economics & Analytics, forecast a loss of 2.1 million jobs during the first year after sequestration is implemented, equal to the 2.1 million jobs created since economic recovery from the recent recession commenced in mid-2009.

As a result, the unemployment rate would return to 2009 levels, above 9%.

The Budget Control Act allocates cuts equally between defense and non-defense discretionary spending, and the Fuller study finds that job losses would be distributed almost equally too: 1.1 million defense-related jobs would be destroyed, and 1.05 million non-defense jobs.

The biggest losses would be among federal employees, people engaged in manufacturing and construction workers.

The national capital region would be especially hard-hit, with 450,000 jobs disappearing in Maryland, Virginia and the District of Columbia.

Although the job losses would not be felt until after the November election, the AIA-sponsored study puts pressure on the White House because it forecasts sizable impacts in areas vital to the president's reelection prospects.

Three of the states hit hardest by the projected job cuts -- Florida, Pennsylvania and Virginia -- are "swing" states that could determine the outcome of the presidential race.

Virginia, poised to be a kingmaker in November because of the way other states are likely to break, would lose more jobs than any other state except California due to its heavy dependence on defense spending.

Also, some of the employment categories hit hardest by sequestration -- such as government workers -- vote disproportionately for Democrats.

Loren B. Thompson, Ph.D., is chief operating officer of the Arlington, Va.-based nonprofit Lexington Institute and chief executive officer of Source Associates, a for-profit consultancy. Prior to holding his present positions, he was deputy director of the Security Studies Program at Georgetown University and taught graduate-level courses in strategy, technology and media affairs at Georgetown. He also has taught at Harvard University's Kennedy School of Government.

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