By Ian Simpson and Anna Yukhananov
WASHINGTON (Reuters) - U.S. government workers
normally unfazed by political gridlock are angry that they will
be disproportionately hurt by Washington's inability to reach a
deal to avoid some $85 billion in automatic budget cuts due to
kick in on Friday.
The indiscriminate spending cuts, which will occur unless
President Barack Obama and Congress reach a last-minute
agreement, threaten to puncture the affluence of the U.S.
capital and its suburbs, where incomes and house prices have
benefited from decades of federal largesse.
The area's 375,000 federal workers are bracing for possible
furloughs and pay cuts that also stand to drain the budgets of
local municipalities and possibly force companies doing business
with the government to lay off staff.
"It's like a bull's eye: any target, we are there," said Jay
Matthews, who works in the chief counsel's office at the
Internal Revenue Service in Washington. "They target us because
they think we make too much money. And they target us because
they think we're lazy."
The Pentagon said last week it planned to put its 800,000
civilian defense employees around the world on 22 days of unpaid
leave, or furlough, this year if the cuts went through.
That amounts to a 20 percent pay cut for Erika Townes, 38, a
nurse at the Joint Base Andrews military facility in Maryland
who said she supports four children and a disabled husband on
less than $50,000 a year.
"Most people I work with are one paycheck away from being
homeless - one. That's the way the economy is right now," she
said.
The cuts, known as "sequestration," are already law, though
they were never intended to go through when lawmakers devised
them in 2011 as part of a U.S. debt limit agreement. It was
believed that the cuts would be so big and indiscriminate that
Democrats and Republicans would come up with an alternative.
But neither side has budged on how to resolve the impasse,
with the Republicans drawing a line on further tax increases and
Democrats refusing major cuts to the Medicare health program for
seniors and other government entitlements.
Carolyn McMillian, a financial management specialist at the
Food and Drug Administration office in White Oak, Maryland, said
she was working 12- to 14-hour-days, keeping a tight rein on
spending for FDA inspectors.
Inspectors who travel alone are discouraged from renting a
car; they must rely on public transportation or try to find a
government vehicle.
"I'm hoping Obama and Congress have a meeting of the minds
at the last minute so they can compromise," McMillian said. "I
would tell them to treat it as if they were in our shoes."
REGIONAL ECONOMY THREATENED
The Washington region, with its 5.6 million people, accounts
for just under 5 percent of the U.S. population but gets 9
percent of federal spending and 15 percent of Pentagon outlays.
Federal procurement in the Washington area has climbed from
less than $5 billion in 1980 to its peak of more than $80
billion in 2010, with the rise steepening since the Sept. 11,
2001 attacks on the United States, according to George Mason
University data.
The automatic cuts could cost an estimated 208,000 jobs in
Virginia, 127,000 in the District of Columbia and 115,000 in
Maryland, according to George Mason University's Center for
Regional Analysis.
About two-thirds of the job losses in Virginia, home to the
Pentagon and such defense companies as General Dynamics Corp
and naval shipyards at Newport News, would come from $46
billion in Pentagon spending cuts, the study said.
With an eye to the "sequester," planners at Fairfax County,
Virginia, which is home to the Pentagon, this week proposed a
fiscal 2014 budget that was 0.37 percent smaller than the
previous year's. County workers would get no pay raises.
The impact on county finances was "unknown and potentially
significant," Fairfax County said in a statement.
Jim Dinegar, president and chief executive of the Greater
Washington Board of Trade, said businesses have frozen hiring,
contractors are pressing lawyers to hold down rates, and
companies are reluctant to take work without a guarantee of
payment.
"Right now, everything is delayed," Dinegar said.
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