They and other Maryland defense contractors are asking lawmakers for details on the so-called sequester — deep budget cuts, including $800 billion to defense spending, due to strike Jan. 2 because the congressional supercommittee failed last year to reach a deficit-reduction agreement.
Many federal agencies would face an automatic reduction of 10 percent, but it is far from clear how the cuts would be implemented.
Lockheed, headquartered in
"But which 10,000? And when?" Stevens asked. "That is difficult to determine without additional guidance from the government that allows us to narrow the potential impacts."
The cuts over the next 10 years could reshape the regional economy.
"Maryland is really vulnerable," said Professor Stephen S. Fuller, director of the Center for Regional Analysis at
"It'll still be an important piece, but it won't be the source of growth it has been in the past," Fuller said.
Congress approved the sequester last year to pressure the supercommittee to reach a deal. But the panel never came close to an agreement, and now
"We're working very hard to replace the sequester, to prevent the sequester from taking place," the
The GOP-led House passed legislation this month that would require President
With the sides far apart, no resolution is expected until after the presidential election — and maybe not then.
"Everybody is kicking the can down the road," said Alan Chvotkin, executive vice president of the Professional Services Council in Northern Virginia, which represents government contractors. "But I don't know what'll change in a post-election environment."
Several organizations have predicted deleterious effects in many states. The National Association of Manufacturers predicted the loss of 1 million jobs in the United States by 2014, more than 40,000 in Maryland.
Fuller, in a report for the Aerospace Industries Association, estimated that job losses in Maryland across federal agencies and contractors could exceed 114,000 over the next two years.
Chvotkin says contractors want to prepare for the cuts, which are less than six months away, but lack key information.
"Many of the companies are saying, 'Please tell us as much as you can about how the law would work, and what actions companies can take between now and when the law goes into effect," Chvotkin said.
Lockheed Martin, the state's largest federal contractor, has said it would send pink slips to each of its 120,000 employees nationwide in early November to comply with federal and state layoff notification laws.
"The feeling is, there'll have to be a complete reordering of business," he said.
Some military bases in Maryland already are feeling the pinch. Civil engineers at Joint Base Andrews in
"I think that's only going to get worse over time," Col. Greg N. Urtso, vice commander of the 11th Wing at the base, told state officials this month.
Barney Michel, president of a business association of contractors to
"The smaller businesses are not quite as well-structured to support this slowdown," said Michel, an executive with the contractor SAIC and president of
Already, he said, he's hearing from businesses that government officials are keeping contracts on the sideline and not committing to new deals, just in case sequestration occurs.
But he believes Obama and congressional leaders will reach a deal before the automatic cuts take effect.
"We do not want to be alarmist," Michel said. "While it's a small potential for it occurring, it's a potentially large impact."
Projected job losses
Largest projected job losses from federal budget cuts, for 2012-13*:
New York 70,010
* Projections include public- and private-sector job losses.
Sources: George Mason University Center for Regional Analysis; Chmura Economics & Analysis