For a decade, Washington has been the town that the recession forgot, a bastion of economic confidence, low unemployment, growing wealth and healthy property values. But as the rest of the country has started to recover, Washington and its close-by suburbs in Maryland and Virginia have stalled, hit hard by the $1 trillion in budget cuts known as sequestration, as well as by hundreds of billions of dollars in additional cuts to the military.

If the government has a lapse in spending, or if Congress cannot approve an increase in the government’s borrowing limit in mid-October, the pain would only get worse, economists said.

“There’s been a dramatic slowdown in growth” in recent years, said Stephen Fuller, the director of the Center for Regional Analysis at George Mason University. “A potential shutdown, the debt ceiling — those headwinds would come in combination with sequestration, furloughs, job reductions and contract cutbacks.”

“The economy is just limping along,” he said.

Federal workers, in Washington and elsewhere, would feel the brunt of a shutdown if a spending measure were not approved by Congress on Monday, having already faced furloughs this year because of sequestration.

Greg Nudd, an Environmental Protection Agency employee who works on dust and haze issues, was furloughed for a total of 47 hours this year.

“When it became clear sequestration wasn’t going to be resolved, we stopped putting money in the kids’ college fund and put it in an emergency fund,” Mr. Nudd said, adding that he had started looking for a job outside the government. “We’ve cut back on a number of things. We canceled cable, we got rid of our land line, we cut out luxuries, the housekeeper’s not coming — things like that.”

Federal employees ended up being paid for days they were furloughed during the last shutdown, during the Clinton administration. But Congressional aides without permission to talk on the record said that conservative legislators seeking to shrink the government and the deficit might have trouble justifying paying federal workers for time they did not work.

“After three years of frozen pay, unpaid furloughs, huge increases in retirement costs for new employees and the threat of massive layoffs at the Department of Defense and elsewhere, Congress and the administration need to keep their hands off of federal employees once and for all,” said J. David Cox, the national president of the American Federation of Government Employees, which represents about 650,000 federal employees.

Typical Americans outside the Washington area might barely notice a shutdown. They would not be able to get a visa processed or hike in a national park. But important government transfers, like Social Security payments and Medicare bills, would most likely continue undisrupted.

But Washington is a company town, and federal dollars make up the lifeblood of the local economy, even as the region has diversified in recent years. The federal government accounts for about 30 percent of the jobs in the District of Columbia, 20 percent in Arlington County, Va., and 10 percent in Montgomery County, Md. — more than 350,000 jobs over the whole region.

Here, the effect would be visible. Tens of thousands of federal employees would face furloughs. Major contractors would see their business disrupted, with parts of the government unable to process claims and federal contacts offline.

“Oct. 1 is our New Year’s,” said James C. Dinegar, the president of the Greater Washington Board of Trade. “It’s when contracts are supposed to be signed and money starts flowing for the new fiscal year.”

There would be significant secondary effects, too. Those furloughed federal employees might spend less at lunch spots and on shoe shines. With monuments and other sites closed, tourists might head elsewhere. “It’s an amalgamation of tourism, hospitality, restaurants and so on. If the government shuts down, a tourist isn’t going to visit the Smithsonian and then head to the Old Ebbitt for dinner,” Mr. Dinegar said, referring to a restaurant in downtown Washington.

Article source: http://www.nytimes.com/2013/09/30/us/politics/government-shutdown-would-hurt-economy-of-washington-area.html?partner=rss&emc=rss