Federal budget cuts could lead to 16,000 job losses in Oklahoma, report says

“Every state, every community, every industry will be on the chopping block,” Marion C. Blakely, president and CEO of the Aerospace Industries Association, said in releasing the report.

The group's report, conducted by George Mason University in Virginia, predicts that more than 1 million jobs would be lost nationwide because of the defense cuts set to take effect in January, and another 1.1 million would be lost because of cuts to other federal departments and agencies.

President Barack Obama and Congress agreed last summer to more than $2 trillion in cuts over 10 years as a condition to raise the nation's borrowing limit. About half of the cuts went into effect immediately, putting new caps on defense and other spending.

Another $1.2 trillion in cuts is scheduled to go into effect in January. Because a congressional “supercommittee” could not develop a plan to distribute the cuts among federal agencies, the brunt will be borne by the Department of Defense — another $500 billion on top of a similar amount already imposed on the Pentagon.

Oklahoma has three U.S. Air Force bases, a U.S. Army post and an Army ammunition depot. It is not clear how each would be affected if the cuts take place, but Pentagon leaders have made clear that the impact on the nation's military would be harsh.

The job losses would hit not only Defense Department and other government employees; government contractors would also find themselves without work and vendors would lose sales.

According to the report released Tuesday, which predicts the impact through Sept. 30, 2013, the nation's unemployment rate would rise at least 1.5 percentage points.

Ripple effect

The report estimates that Oklahoma's economic activity would decline by $1.6 billion through next September and that $800 million in wages would be lost. The report measures direct cuts to employees and contractors and the ripple effect on the economy.