The News Courier in Athens, Alabama

Local News

March 9, 2013

Businesses in military towns brace for budget hit



FAYETTEVILLE, N.C. (AP) — Like many who make their living in the commercial strip outside the gates of Fort Bragg, Mike Thomas is confident the $85 billion in automatic military spending cuts will hurt sales at his used car lot and rim shop.

The vast majority of his customers work on the base, and smaller paychecks means less money for the four-wheel drive Jeeps, chrome wheels and window-rattling sound systems that are his specialty.

While it remains too soon to measure the exact impact for small businesses that thrive on the civilians employed at the nation's largest military posts, owners already are bracing for the damage. Pentagon officials say the automatic budget cuts that took effect March 1 will result in one-day-a-week furloughs for 800,000 civilian employees across the U.S. starting next month, resulting in a 20 percent cut to their paychecks. Soldiers' salaries are exempt from the cuts.

About 14,500 of those are at Fort Bragg, the sprawling U.S. Army base outside Fayetteville, N.C., where the commanding general on Friday announced additional cuts that include the closure of a dining hall and selected recreation centers that serve soldiers and their families. About 38 percent of all economic activity in the surrounding county is tied directly to military spending, a total impact of about $5.5 billion a year.

Hand-painted signs at Auto Express, the shop about a half-mile from the base's main gates where Thomas is the general manager, offer special discounts and financing for U.S. Defense Department employees.

In addition to the budget cuts — known as sequestration — deadlock in Congress could trigger a full federal shutdown later this month. Thomas expects the cuts will have an impact on his business similar to the military buildup before the 2003 invasion in Iraq, when sales dropped by about half as Bragg's 82nd Airborne deployed overseas.

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