David Frum

02.25.13

Who Will Suffer Most From the Sequester?

The Pew Center on the States, a division of The Pew Charitable Trusts, published a report last November that outlines which states would be most affected by the sequester.

The results look at what percentage of a state's GDP comes from federal funds. By proxy, this data shows which states wil be harmed the most from the impending sequester, to take affect in March. Here are two quite interesting charts:

During the Great Recession, one the areas that was least affected was the D.C. metropolitan area. This is the reason why. So much of their prosperity is based upon federal spending in the form of direct employment or contracts to companies. One example of this is Lockheed Martin, whose main facility is located in Montgomery County, Maryland, just outside the District borders.

It is interesting to note that of the 5 states that will be harmed the most from a cut to federal grants, 4 of them are solidly red states that have few sources of state revenue.