Stephen Fuller, economist at George Mason University in Fairfax, Va., says federal services could see cutbacks, even shutdowns, due to coming budget cuts

11:41 PM, Nov 8, 2012   |    comments
  • Share
  • Print
  • - A A A +

WASHINGTON,D.C. (WUSA) - When federal agencies are forced to cut 9% out of their budgets, the Washington area alone will see 65,000 federal jobs lost. 97,000 federal contractor jobs will disappear. Add to that subcontractors and people who rely on all of that, and the total local jobs lost is nearly 500,000

"You can't cut back the federal government by 9% without finding some impact on every town, on every individual across the country," said George Mason economist Stephen Fuller. He believes that federal services and facilities could be shutdown or cut back. The National Zoo and Smithsonian could cut back hours. You might not get that passport renewed in time for your trip.

Meteorologists were able to track Hurricane Sandy using federal satellites. NOAA may not be able to spend what it needs to keep those satellites up to date. And, Fuller says, we could see slowdowns at some smaller airports where the FAA may implements cuts. He says everybody will be inconvenienced. But worse, Fuller says, "Just about everyone will see their taxes go up."

People who work will see their payroll taxes go up and people who itemize won't be able to deduct child care expenses because Congress hasn't continued those reductions. And small businesses will lose money because of changes in the inheritance tax.

"We basically lose the gains we've made, that we've achieved over the last three years that we've added and we're back to the depth of the recession again."
And when people have less money to spend, or have lost their jobs, they don't go out eat or get their nails done anymore, and those businesses will suffer.

"It will happen unless Congress acts to stop it. So they have to pass legislation that reverses this and the President sign it before the 1st of January," said Fuller.

The thinking is that the lame duck Congress will meet and decide to push the issue on to the next Congress. Fuller said that won't help the ongoing uncertainty which is not good for the economy, but at least it's better than going over the cliff.

Most Watched Videos