Federal Cuts Hitting the Mid-Atlantic Region

KatzAbosch, a valued client of has some informative news to share for those in the Mid-Atlantic region.

People working in civilian federal government jobs are now feeling the tightening grip of federal budget cuts. According to the U.S. Department of Commerce, Maryland’s personal income growth last year lagged behind most of the nation due to the federal cuts. The combined earnings of Marylanders in this job sector saw their combined personal incomes drop by as much as $390 million.

Virginia and the District of Columbia also felt the budget cuts given the high percentage of civilian federal government jobs in the region. An example of a job in this industry could be a defense contractor at Aberdeen Proving Grounds. These three regions saw a drop in combined personal income for as much as $1 billion.

So, what’s to blame? The national federal budget cuts are undoubtedly a response to the 2008 recession. This led immediately to a decrease in federal spending—i.e., the sequester—which, while commonly associated with direct government jobs naturally trickles down into the web of security and defense contractors that dot the mid-Atlantic region.

For example, the national federal budget, passed in 2011, witnessed $85.3 billion in cuts. The U.S. Government Accountability Office, in a report titled “Report to the Chairman, Committee on the Budget, House of Representatives,” found that for fiscal year 2013, “19 agencies reported curtailing hiring; 16 reported rescoping or delaying contracts or grants for core mission activities; 19 reported reducing employee training; 20 reported reducing employee travel; and 7 reported furloughing more than 770,000 employees from 1 to 7 days.”

On the other hand, according to the US chamber of commerce, personal income in Maryland grew by a meager 1.6% in 2013. However, in 2012 personal income grew by double that amount.

To learn more, you can contact Terry Grant from KatzAbosch.

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