Sen. Jeanne Shaheen, D-N.H., pictured, and Sen. Kelly Ayotte, R-N.H., say they're working on a plan before sequestion takes effect to avoid defense industry layoffs. (Chip Somodeville / Getty Images)
More than 2 million American jobs, including roughly 270,000 federal jobs, could be lost under sequestration next year, a new report released by the Aerospace Industries Association says.
The federal job cuts would consist of roughly 48,000 at defense agencies and 229,000 at non-defense agencies.
“From food inspectors to FBI agents to diplomats, the federal workforce gets hit very hard,” AIA president Marion Blakey said during a news conference for the study’s release.
Another 340,000 jobs would be lost indirectly because of federal spending cuts. Those include contractor jobs certain federal support staff, and private-sector jobs that rely on federal employees.
The federal jobs at stake would be lost if agencies make proportionate reductions to their payroll and procurement budgets, the study found. Most federal jobs lost would come from non-defense agencies since military pay is expected to be exempt from cuts and because most non-defense agencies’ procurement budgets are not as big as the Defense Department’s, so most of the cuts will come from their payroll accounts, said Stephen Fuller, a George Mason University professor who conducted the study.
The automatic cuts required under sequestration — $56.7 billion in reductions to defense spending and $59 billion in reductions to non-defense spending — would reduce the nation’s gross domestic product by $215 billion, decrease personal earnings of the workforce by $109 billion and cost the economy 2.14 million jobs, according to the study.
The job losses expected in 2013 are split evenly between defense and non-defense industries. The defense spending reductions would result in a loss of 1.09 million jobs, and the non-defense cuts would result in a loss of 1.05 million jobs, the report says.
Funding cuts required by the Budget Control Act have already prevented some agencies from filling vacancies, Fuller said.
New Hampshire Sens. Jeanne Shaheen, a Democrat, and Kelly Ayotte, a Republican, who spoke at the news conference, said they are working on a bipartisan plan before sequestration takes effect and before the elections, when companies have to give layoff notices.
“We can come up with alternative ways to reduce spending and we need to do that on a bipartisan basis,” Ayotte said. “It is my hope that this report will be an eye-opener to members of Congress on both sides of the aisle that we need to come to the table now and at least resolve a year of these across-the-board cuts in a responsible way.”