Study: Red States Face Hard Hit From Shutdown

Tuesday, 08 Oct 2013 05:19 PM

By Cathy Burke

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Fifteen Republican-leaning states would be among the 25 most hard-hit by a long government shutdown that would lead to lapses in benefit payments, a web-based study released Tuesday found.

The WalletHub survey found red states such as Alabama, Alaska, Idaho, South Dakota, Utah, Arizona and Montana are highly vulnerable either because of the high concentration of federal employees and contractors or the large number of seniors and other groups who benefit from government aid.

The first week of the shutdown walloped the local economies of Virginia, Maryland and Washington, D.C., more than most other regions because the area has the highest concentration of federal employees and contractors who were furloughed, the survey found.

It will only get worse if the shutdown is prolonged after the Treasury Department runs out of borrowing authority Oct. 17.

"It’s interesting to note that Republican-leaning states stand to suffer the most," said Odysseas Papadimitriou, chief executive of the WalletHub and CardHub web sites, the Washington Times reported.
"From senior citizens and veterans who aren’t getting their Social Security and VA checks to students and small business owners whose loan applications go unfulfilled, there will be plenty of angry constituents for politicians to answer to."

Meanwhile, small-business people, many of whom get loans from the government under programs that were closed down last week, are getting more anxious about the economy, a poll released Tuesday showed, Bloomberg News reported.

Optimism among small businesses inched down in the September survey, while the share of businesses that planned to hire new employees fell to 9 percent.

“In September, small-business owners were already worried about the economic outlook. The government shutdown and the impending debt ceiling crisis are likely to send small-business optimism deep into recession territory,” said Ozlem Yaylaci, senior U.S. economist at IHS Global Insight, The Washington Times reported.

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