LARGO, MD — U.S. Senator Ben Cardin (D-MD) today hosted a roundtable discussion at the Prince George’s County Economic Development Corporation (EDC) to talk with leaders of Maryland’s small business community about what sequestration will mean for Maryland.
Many small businesses in Maryland depend on the federal government for contracts and other businesses. On March 1, sequestration – automatic, across-the-board spending cuts – will begin to take effect. Unless Congress acts, sequestration requires $42.7 billion in cuts to defense programs and another $42.7 billion in cuts to non-defense programs over the next year.
“Unfortunately, I am not optimistic that Congress will act by March 1st to avoid sequestration and cuts of this magnitude will have a profound effect on Maryland and our entire nation. Sequestration will have a very serious effect on small businesses here and around the nation. In Maryland, there are more than 6,900 small businesses that receive some federal contracts as primary contractors. Sequestration also will affect businesses that service prime contractors.”
Senator Cardin listed some of the effects of automatic, across-the-board cuts:
- The Small Business Administration (SBA) loan guarantees could be cut by up to $902 million;
- According to Stephen Fuller of George Mason University’s School of Public Policy, small business prime contractors with the federal government could account for 34 percent of the jobs lost under sequester;
- According to the Congressional Budget Office projections, 750,000 people nationally will lose their jobs and the economy will shrink by .6 percent by the end of the year;
- The Maryland Board of Revenue Estimates projects sequestration could mean a loss of 12,600 jobs, resulting in a reduction of Maryland wages and salaries by $2.5 billion; and,
- In this fiscal year alone, sequestration could cost the state $150 million in federal grants to state and local governments.
“While I am not optimistic that sequestration can be avoided, I am working with my colleagues to do all I can to avoid it. We need approximately $1.4 trillion in deficit reduction, which I believe is achievable through a balanced approach that includes both increased revenues and decreased spending.”