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Obama's impact on local economy uncertain
While Barack Obama's general election victory was greeted with wide smiles and high-fives by many Fairfax residents, some in the business community are taking a wait-and-see approach.
Penny Pompei, president of the Greater Reston Chamber of Commerce, counts herself in that latter group.
"My initial reaction is one of guarded optimism, but there are still some unknowns," Pompei said. "This business community is very dependent on government contracting and defense dollars. If that budget is drastically reduced, it could have a really negative impact here."
Last year, nearly $19.8 billion was awarded to Fairfax-based government contractors, a list that includes Northrop Grumman, Booz Allen Hamilton and SAIC (Science Applications International Corp.). All three companies rank among Fairfax County's five largest employers.
From 2000 through 2007, nearly $112 billion in defense contracts were doled out to companies with direct ties to Fairfax.
While some have hinted that the rules of the government contracting game will change during Obama's administration, he hasn't unveiled any official plans on the subject. Withdrawing troops from Iraq was a central theme throughout Obama's 22-month campaign, but he also suggested the United States needs to double up its efforts in Afghanistan. Whether those plans translate to a leaner military and a reduction in defense spending is still up for debate.
"Most of the [government contractors] I talk to are sitting on their hands right now," said Jerry Gordon, president of the Fairfax County Economic Development Authority.
That said, Gordon points out that defense and homeland security aren't the only pieces in Fairfax County's federal contracting puzzle.
"Defense and homeland security get a lot of attention, but there are multibillion-dollar deals related to agriculture, state, commerce, veterans affairs ... a lot of people are also tied to consulting and IT support. Those jobs aren't going anywhere."
DDE_LINKJohn McClain, deputy director of George Mason University's Center for Regional Analysis, said nobody should jump to any wild conclusions between now and inauguration day.
"At this point, it's tough to really say what might happen," McClain said. "We'll certainly be watching what happens with the government contracting sector because that's been a driving force in this region for a long, long time. Any change in that -- whether it goes up or down -- will have a major impact here."
Pompei also said many of her counterparts in the business sector are still trying to get a handle on Obama's tax plan.
"We're a high income area," she said. "If there are tax cuts for some and tax hikes for others, we need to see what that's going to look like. It's still a bit gray to a lot of people."
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