If Congress fails to reach agreement on a deficit reduction plan (which looks increasingly likely), automatic budget cuts—to the tune of $1.2 trillion—will kick in on January 2, 2013. The cuts may become a key issue for voters in northern Virginia, whose jobs depend on government contracts, and there is an interesting partisan twist. Defense spending is slated to take a particularly hard hit.The Washington Post reports:
Managers of Pentagon programs may be more likely to end contracts if the automatic cuts occur, according to a survey of 50 Pentagon officials by Myles Walton, a Boston-based analyst at Deutsche Bank Securities.More than a quarter of the respondents said they believed there was as high as a 50 percent chance that they would terminate programs because of the automatic cuts, he wrote in a May 7 note to clients.
Uncertainty about cuts poses a challenge for the Obama campaign, which will need high turnout from the federal employees and contractors in northern Virginia to win the state again. Even if Congress does reach a deal to avert sequestration cuts, Romney stands to gain from speculation that his administration will be friendlier to those who rely on defense and intelligence spending.Look for the Romney campaign to use this issue to horn in on the Obama lead in the DC burbs. The Pentagon and Langley are both in Northern Virginia, as is much of the military-industrial-contractor complex. A little weakness in the northern burbs, and purple Virginia may well go red.