Riverside County Economy Facing Uncertain Future if Sequester Shrinks Budgets

A political deal struck in the summer of 2011 will begin to affect the economy in late winter 2013, unless feuding lawmakers in Washington can agree on a compromise by Friday.

The sequester will mandate significant cuts to the federal budget, with few if any government agencies immune to reductions in funding. Defense and domestic spending will be evenly slashed, and the impacts on local economies are far from clear.

Riverside County has around 16,500 federal employees and retirees, according to Eye on Washington, and their fate could include furloughs or worse. Media reports include warnings on delays in air travel and tax refunds.   

Locally, companies that hold federal contracts could also be affected. Companies in Murrieta and Temecula that held defense contracts as recently as fiscal year 2011 include USAC Aerospace Group, Exotic Electro-Optics, Tactical Linguist Concepts, Temecula Motorsports, Advantage West Enterprises, The Crew Contracting, SFM Constructors and others, according to a Defense Breakdown Economic Impact report generated by Forthecommondefense.org.

Civilians employed by the Department of Defense face the possibility of furloughs.

“The possibility exists for a 22-day furlough of Federal employees,” said Brian O’Rourke, spokesman for Navy Region Southwest.

The Obama administration released on Sunday a report for each state detailing the impacts of the sequester’s budget cuts, and Republicans have accused the president of using scare tactics for political gain.

The seven-page report for California paints a grim picture for education, environmental protections, the military, law enforcement, child care, public health and government services. The report is attached to this article in the PDF section.

The nation has been through this drill before. The sequester was set to begin on Jan. 1, 2013, if lawmakers weren’t able to reduce the budget deficit. That deadline came and went, but they were able to agree on postponing the sequester for two months. That time is running out.