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Super committee failure could cost states billions in federal wages, projects

State leaders are among those worrying about the effect of automatic budget cuts that are scheduled to kick in following the inability of the super committee to come up with a deficit reduction deal.

When (if?) the $1.2 trillion in budget cuts equally divided between defense and domestic programs go into effect, some state and local economies could also take hits.

How much will states suffer? sifted through U.S. Census data and found that Uncle Sam spent $480.4 billion on procurement in 2010. And that's this week's By the Numbers figure.

480 point 4 billion procurement dollars

I could have just as easily chosen $279.3 billion as this week's number. That the total amount of federal wages and salaries paid out to workers nationally in 2010.


Obviously, the District of Columbia, Maryland and Virginia will take major money hits if federal funds are actually sequestered in 2013.

Stateline put the projected state costs into an infographic. You can click on the reduced image of it there to the left for a bigger picture.

It shows that procurement dollars and salaries and wages for federal workers accounted for more than 40 percent of D.C.'s economic activity in 2010.

The amount in Virginia was 18.5 percent, with 13.5 percent the number for Maryland.

But some other localities also will share some of the federal budget cutting pain.

Hawaii's gross state product (GSP) last year included defense salaries of more than 10 percent and another 3.5 percent in defense-related procurement accounts.

In New Mexico, federal salaries and procurement spending made up 12.4 percent of the Land of Enchantment's GSP in 2010.

Alaska's GSP also was near 12 percent thanks to federal money.

And Kentucky's GSP included almost 10 percent from federal wages and procurement.

Small business costs, too: But it's not just contractors on big defense projects that reap the benefit of federal dollars.

Small Business Survival examines how small businesses can get in on government contracts.

The Small Business Administration has a special Web section dedicated to federal contracting opportunities for smaller firms.

And keeps track of tens of thousands of government contracting opportunities.

You can be sure that this component of federal spending will get lots of attention as Congress struggles to deal with the impending automatic budget cuts.

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