(snip)"Bloomberg.com
July 17, 2012

Defense Industry Says Budget Cuts May Cost 2 Million Jobs

By Laura Litvan, Bloomberg News

Across-the-board cuts to federal programs may cost the U.S. 2.14 million jobs and reduce the gross domestic product by $215 billion next year, according to a study funded by defense contractors lobbying to forestall the reductions.

The study of $1.2 trillion in scheduled defense and domestic cuts over a decade found the unemployment rate may increase as much as 1.5 percentage points next year unless Congress and President Barack Obama act to prevent them from taking effect beginning Jan. 2. The nation’s unemployment rate was 8.2 percent in June.

“This is going to spread over the economy and have other consequences,” said Stephen Fuller, director of the Center of Regional Analysis at George Mason University in Fairfax, Virginia. Fuller produced the study for the Aerospace Industries Association, which represents Lockheed Martin Corp., General Dynamics Corp. and other major defense contractors.

Fuller had predicted 1 million jobs lost from defense cuts alone in an earlier study for the same trade group. His center has produced reports commissioned by business groups including the Greater Washington Board of Trade and the National Association of Industrial and Office Parks, according to its website.(snip)

(snip)"Marion Blakey, president of the Aerospace Industries Association, said the new study underscores the need for lawmakers to forge a broad debt-reduction deal. Everything from road construction to education to health research will take a hit, she said.

California, Virginia

“It’s an unemployment Armageddon,” she said.

The study said the five jurisdictions that would be hit hardest are: California, Virginia, Texas, Washington, D.C. and Maryland. While there are few signs of compromise in Congress, some Republicans on the Senate Armed Services Committee say they are seeking a consensus on revenue increases that could be used to put off the sequester by one year.

One of those senators, Kelly Ayotte of New Hampshire, said today that she is hopeful lawmakers in both parties will form a group to negotiate a compromise. Rejecting the idea that tax increases would be a part of any deal, she said she approves of other potential “revenue raisers,” such as the sale of excess federal properties.

“Tax increases would hurt our economy right now,” she said."(snip)