FISCAL CLIFF

Fiscal Cliff: Defense workers, companies in Northern Virginia will be hit hard

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In Northern Virginia, it doesn't take long to find companies or workers who would be hit hard by big defense cuts.

No budget deal would mean sequestration, across the board cuts to government agencies they would not be able to control.

For the Department of Defense, it would mean $50 billion in cuts the first year and $500 billion in the next year.

Philip Ewing, defense editor for POLITICO, says even the threat of sequestration has likely already hurt the industry.

"As conservative business people they have to assume that this big thing is going to take place and take measures to safeguard against it," he says.

POLITICO is owned by Allbritton Communications Company, the same company that owns and operates ABC7.

By the 14th, people who handle payroll will have to start altering paychecks for mandatory higher taxes if the country goes over the edge. Even if a deal is worked out at the last minute, there will be a lot of last minute scrambling.

Politico's Edward-Isaac Dovere adds, "Certainly could could create a lot of problems at the beginning of the year."

President Barack Obama and House Speaker John Boehner met Sunday at the White House to discuss the ongoing negotiations over the impending "fiscal cliff," the first meeting between just the two leaders since Election Day.

Spokesmen for both Obama and Boehner said they agreed to not release details of the conversation, but emphasized that the lines of communication remain open.

The meeting comes as the White House and Congress try to break an impasse over finding a way to stop a combination of automatic tax increases and spending cuts scheduled to kick in at the beginning of next year.

Obama has been pushing higher tax rates on the wealthiest Americans as one way to reduce the deficit - a position Boehner and other House Republicans have been steadfastly against. Republicans are demanding steeper cuts in costly government entitlement programs like Medicare and Social Security.

While some workers are convinced the cliff will be averted, others are far less certain.

"There's always hope,” says one Defense worker. “I always hold on to that hope."

The department of defense knows any big budget deal would very likely mean cuts. But the agency would much rather deal with cuts it can control than ones it cannot.

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