'Sequester' scare tactics? White House details 'devastating' 50-state impact. (+video)

A White House report stresses the huge impact the sequester spending cuts would have on states. For some states, that might be true. But for others, the cuts might just be a blip.

By Mark Trumbull,?Staff writer / February 25, 2013

Republican Gov. Bob McDonnell of Virginia (l.) and Democratic Gov. Martin O'Malley of Maryland speak on CBS's 'Face the Nation' in Washington Sunday. McDonnell joined with O'Malley to call for Congress to prevent impending defense cuts that would hit their states hard.

Chris Usher/CBS News/AP

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A White House report released Sunday is designed to send a clear message: If automatic spending cuts take effect, your state will be affected.

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Correspondent Liz Marlantes with insights into the politics behind the impending spending cuts.

The report on the "sequester" includes 50 state documents ? plus one more for the District of Columbia ? to show ?the devastating impact the sequester will have on jobs and middle class families across the country if Congressional Republicans fail to compromise to avert the sequester by March 1st.?

But, rather than making the case that the cuts will be devastating, the 51 reports suggest the sequester?s impact would vary widely by state, depending largely on the degree of activity related to the US military. And in many states, defense plays a small role in the economy.

Consider one large Midwestern state, Ohio. The White House report for this state finds that 26,000 civilian employees of the Defense Department would be furloughed, with a new work schedule that reduces their gross pay by $161.4 million during the fiscal year that ends in September.

That sounds large. But, when coupled with $5 million in expected cuts to Army and Air Force operations in Ohio, that amounts to about $14 for each of Ohio?s 11.5 million residents, spread over half a year. Ohio would take an additional hit from a decline in defense contractor work, but that industry (not analyzed in the White House estimates) makes up only about 2 percent of the state?s economy.

By contrast, some states would see much larger defense-related impact from the sequester, either because they have lots of civilian defense workers (Virginia, Maryland) or lots of military operations (Hawaii, Alaska) or lots of defense contractors (Washington, Connecticut) relative to their overall population.

The sequester would also affect a host of non-defense federal activities across the 50 states. Those, also, would be somewhat unevenly dispersed among states. But only in Maryland, Virginia, and New Mexico does non-defense federal spending account for more than 5 percent of economic output, according to research by forecasters at the banking firm Wells Fargo.

Source: http://rss.csmonitor.com/~r/feeds/csm/~3/GksIATCnf1g/Sequester-scare-tactics-White-House-details-devastating-50-state-impact.-video

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