The fiscal cliff is instilling worries among various manufacturing industries ranging from consumer goods to aerospace, which say there will be huge job losses if spending cuts go into effect.
At a news conference today, President Barack Obama declared that while there has been no bipartisan compromise on an economic deal to avert the fast approaching fiscal cliff, he remained “optimistic” that Republicans and Democrats in Congress will come to an agreement. The threat of sweeping tax hikes and steep spending cuts on Jan. 2 is already affecting businesses across America, as investment spending has grinded to halt.
There is a far from optimistic outlook for the economy and jobs. Earlier this week, IMT Career Journal’s sister publication Industry Market Trends spoke with two industry trade groups about what the fiscal cliff means for manufacturing production and employment loss.
A recent article by the Associated Press reveals that the state of Kansas is in danger of losing over 40,000 jobs, mostly in the private sector, translating to a gross domestic product loss reaching 2.75 billion.
On an even larger scale, a study by George Mason University’s Center of Regional Analysis indicates that the U.S. could lose as many as 2.1 million jobs spanning the state level, private sector and government contract jobs, due to spending cuts, reported the Washington Times. Steven Fuller, the center’s director, told the paper that the biggest impact would be on the construction and retail sectors.
The outlook is also grim for the aerospace industry. Just this month, the Aerospace Industries Association released the report “The Economic Impact of Sequestration on Civil Space Programs,” which details how budget cuts would leave a devastating effect on the U.S.’s space leadership. That report, also led by Fuller, says that cuts as mandated by the Budget Control Act of 2011 is set to slice $1 trillion from federal programs that include NASA and the National Oceanic and Atmospheric Administration over a period of nine years starting on Jan. 2. With the sequesters come job cuts: As many as 20,500 NASA contractors could lose their jobs.
Other industry experts remain cautiously optimistic that lawmakers will strike a deal before the deadline. “We do expect that all sides will reach an agreement,” NASA spokesman Allard Beutel told Government Executive. “That being said, we’re still assessing what impact [the fiscal cliff] will have if it actually goes through in a couple weeks.”
“You know, I think that any objective person out there looking would say that we put forward a very balanced plan, and it’s time for us to go ahead and get it done,” the president said at a conference on Wednesday. “That’s what the country needs right now, because folks have been through some wrenching times. We’re still recovering from a very tough recession. And what they’re hoping for is a sense of stability, focus, compromise, and common sense over the next couple of years, and I think we can provide it.”