ANNAPOLIS — Maryland, Virginia and the District of Columbia are among the most vulnerable to looming federal budget cuts in defense as well as nondefense spending, according to a report released Monday by Wells Fargo Securities.
The report examines parts of the country that would feel the most pain from $85 billion in cuts that are set to automatically start taking effect March 1 without a bipartisan deal on sequestration. Actual cuts may be around 13 percent for defense and 9 percent for other programs because lawmakers delayed their impact, requiring savings over a shorter period of time.
“The District of Columbia along with its neighboring suburbs in Northern Virginia and suburban Maryland are particularly vulnerable due to the multitude of defense agencies and contractors located in the region,” said the report by Wells Fargo economists Mark Vitner and Michael Brownsaid.
Defense spending has been estimated to account for 9.8 percent of the combined D.C., Virginia and Maryland economies in 2010, the report noted.
The report also cited Huntsville, Ala., and St. Louis as areas vulnerable to cuts.
“Both have outsized exposure to the aerospace industry and will see growth slow if the military purchases fewer fighter jets, missiles and helicopters,” the report said, noting that smaller towns that host large military bases are probably the most vulnerable.
Georgia, for example, is home to three areas like that, including Columbus, Warner Robins and Hinesville, according to the Wells Fargo report. As for larger metro areas, Navy towns like San Diego and Norfolk-Virginia Beach also could be affected.