Business community says Trump’s hiring freeze highlights need for region to diversify economy
The order has the White House's neighbors across the Potomac, where more than 10 percent of Virginia’s four million workers are federal employees or active military, left wondering exactly how the executive action will play out over time.
The region's federal lawmakers from across the aisle – including Congresswoman Barbara Comstock (R) and Sen. Tim Kaine (D) – have already expressed concern about the new administration’s latest action, while most in the business community agree Trump’s actions highlight the need for the region to diversify its economy and ease dependence on the federal government.
“He talks about spending more on defense, but then he wants to see a smaller federal workforce,” said Terry Clower, a George Mason University professor public policy and the director of the school’s Center for Regional Analysis. “He wants to spend money on infrastructure, but I don’t know how much we gain as a nation by having a big hunk of that infrastructure spending building a wall across the southern U.S.”
The hiring freeze states that no vacant federal government positions existing at noon Jan. 22 may be filled, and no new positions may be created, except in limited circumstances. Military hiring and public safety personnel are not included in the order.
The order also notes “contracting outside the government to circumvent the intent of this memorandum shall not be permitted.”
Clower said “any reduction in federal spending, anything that causes the federal government to not grow, certainly will have an impact on our economy, but keep in mind that we’ve known for some time now that this region needs to become less of a ‘company town’ centered on the federal government.”
A 2014 report from the state's Joint Legislative Audit and Review Commission, “Size and Impact of Federal Spending in Virginia,” notes that federal spending accounts for roughly 20 percent of the state’s economy, with military spending being the largest category.
Clower said although the region is already starting to shift its dependency on the federal government, those efforts might need to be accelerated under a Trump administration.
In 2015 the Center for Regional Analysis found the D.C. region saw $71.1 billion in federal procurement spending. A year later, Clower says that number increased by about 4 percent rising to $73.8 billion in 2016.
‘Wait and See’
According to figures from the county’s Department of Economic Development, the top three federal government contractors in Loudoun come from the defense and military sectors. 46 percent of federal government contractors come from the defense,18 percent from the Army and another 10 percent from the Navy.
Ali Sajjad, president and CEO of Leesburg-based federal contractor SimbaCom, says he welcomes the news of Trump’s executive action because his company will likely benefit as a military contractor. Sajjad thinks the order will reign in wasteful government spending.
“What the government’s trying to do is do a checklist of the way this money is not being appropriated properly,” Sajjad said.
Loudoun County Chamber of Commerce President and CEO Tony Howard agreed the new administration’s hiring freeze needs time to unravel in order for the region to understand its impacts. For now, Howard says the executive action speaks to the “desperate” need for Loudoun and Northern Virginia to diversity, work with other jurisdictions and forge more public and private partnerships.
“Our fortunes can change every four years depending on who occupies the White House. It's just enough evidence for most of us to say we need to fix our overall economic condition in order to impact our own futures rather than be reliant upon who occupies that beautiful home at 1600 Pennsylvania Avenue,” Howard said.
Both Rep. Comstock and Sen. Kaine say they don't want Washington's budgeting woes corrected on the backs of federal employees.
“As the General Accounting Office has previously reported, past hiring freezes in both Republican and Democrat administrations have cost the federal government money in the long run because of staffing problems, or problems in recruiting or disruption of key government operations and required services to the American people,” Comstock said.
Kaine was more direct in his criticism.
“I'm spotting a troubling trend in the Trump Administration – kicking around the federal workforce,” the Democrat and former vice presidential nominee said. “When President Trump institutes an across-the-board federal worker hiring freeze and targets those who have worked on certain issues like climate change, or House Republicans support actions that allow federal workers' salaries to be cut to a dollar, we aren't building a high-morale, high-performance federal workforce.”
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