Economic Outlook
9:43 am
Mon January 20, 2014

Federal Budget Impact on Virginia

The spending bill signed into law by the president last week has a lot in it for Virginia.

Virginia possibly makes out better than any other state from the one point one trillion dollar spending bill. The state’s economy took a hit in two thousand thirteen. Many federal contractors and workers suffered through pay cuts as they were furloughed. Then there’s the government shutdown which ripped around twenty four billion dollars out of the U-S economy. Northern Virginia Democrat Jim Moran says this bill provides the certainly the state has needed.

“This bill and the budget deal will ensure there aren’t going to be any more furloughs. We’re not going to shutdown the government again. And gradually, I hope, we’ll be able to restore the federal workforce to the level it deserves of one that can be trusted and appreciated and admired. So that we can recruit the people that we need," said Moran.

No one got everything they wanted from the deal. Moran and the rest of the delegation had to hold their noses a little while supporting the bill. “I would have a much more robust budget for the Environmental Protection Agency, for the National Park Service, for the arts and humanities, but this is a reasonable compromise. We can’t be purists. We can’t let the perfect be the enemy of the good.”

While the EPA saw its budget cut by around one hundred and thirty million dollars, Moran says overall the agency fared well because it can still implement its new rules to curb carbon pollution.  “There were 32 legislative riders. We eliminated half of them and the half that we eliminated were the most egregious. So the Environmental Protection Agency is going to be able to continue to do its work in making our air cleaner, our water purer.”

Virginia Democratic Senator Tim Kaine says he’s glad the budget increases funding for Pre-K programs. “It had been hurt in the sequester and some of the earlier budget cuts, so this omnibus bill really helps to expand it again and that’s positive," said Kaine.

On the other side of the aisle, most Republicans are also praising the deal. Congressman Scott Rigell says he hopes the measure will also restore confidence in this unpopular Congress. “It does represent to me fiscal discipline on the discretionary side as has been noted we’ve reduced discretionary spending to 2009 levels. This is good for the American people and it’s an indication to me personally and I hope to the American people that we really can get something done.”
 

Rigell’s Virginia Beach district is home to a lot of military personnel and defense contractors. The bill invests money in Virginia’s submarine and air craft carriers. But Rigell says more importantly it provides certainty to military leaders.

“Well overwhelmingly what I heard from our senior military officials was this: is that they could live with a set number but it was the uncertainty combined with continuing resolutions, just lurching from one resolution to the next that was creating real problems for them in procurement, planning – it was driving down the efficiency of dollar spent in defense.”

Virginia Republican Morgan Griffith had a little bit more of a struggle supporting the bill. “It was not particularly easy," he said.

Griffith would have liked deeper spending cuts and he says now he’ll be looking to extract those cuts when lawmakers are asked to raise the debt ceiling.  

“Debt ceiling is another way of saying, ‘hey, let’s put the brakes on here.’ So I’m hopeful that we’re going to see more cuts if there’s going to be a debt ceiling increase. ”

That upcoming debt ceiling fight could put Virginia in the cross hairs again. The state could lose its Triple A credit rating if lawmakers don’t raise the debt ceiling, which has Senator Kaine hoping the majority of Republicans don’t echo Griffith’s demand for further spending cuts.

“So if we get over that hurdle I actually think we can have a very positive year economically. But we’ve got to get over that hurdle," said Kaine.