Defense spending rolls; northern Virginia sags


ARMING UP: While military spending continues to soar, Northern Virginia contractors aren’t feeling a lift.

By Kenric Ward | Virginia Bureau

FAIRFAX, Va. — John Hanlin has seen the future in northern Virginia, and it doesn’t work.

The former procurement manager for a private defense contractor was laid off as the Obama administration moved more work back into the bowels of the federal government.

“It’s taken five federal employees with a combined payroll of $1 million to do what I did at $100,000,” Hanlin told in an interview.

“The government services culture is not work-oriented,” he observed.

Hanlin’s experience illustrates how the military-industrial complex continues to roll — even as northern Virginia’s defense-dependent economy struggles.

Despite Gov. Terry McAuliffe’s bullish pronouncements about job creation in Virginia, the outlook for Nova isn’t so robust. While the region’s overall employment rate has roughly flat-lined, offices are emptying.

Vacancy rates of 15 to 20 percent are reported in Crystal City and some other areas of Arlington and Fairfax counties.

Stephen Fuller, director of George Mason University’s Center for Regional Analysis, said in a speech this summer: “We’re moving things around to give a sense that things are just fine.”

‘FORTUNE ONE’: Veronique deRugy says creating wealth via the federal government is “messed up.”

Veronique deRugy, policy analyst at GMU’s Mercatus Center, said the “situation is deteriorating.”

“The fundamental problem is that you had creation of wealth based on the federal government. That’s messed up,” deRugy told Watchdog.

DeRugy said the federal government cannot fix itself, or rein in spending, because its decision-making process is inherently political and outdated.

“We’re producing weapons systems as if we’re still fighting the Soviets,” she said, citing the bloated F-35 fighter jet project as one example.

DeRugy, along with the Project on Government Oversight, has identified a vicious spending circle.

“Defense contractors make decisions with their eyes on Congress,” she said. “On the government side, enforcement and accountability are missing.”

“Sequestration is off the table. Lowering defense spending is off the table. I call it Fortune One,” deRugy said.

Amid the continued defense spending, thousands of displaced private-sector workers like Hanlin see an economic model that is neither efficient nor sustainable.

Fuller calculated that northern Virginia lost 21,000 federal jobs since the recession and is on track to lose 20,000 more in the next few years.

No pain, no gain, said deRugy.

Until all the subsidies for green energy ventures and so-called stimulus projects are gone, and until government shrinks substantially, she says reputed economic gains will be artificial — and costly to taxpayers.

“The Defense Department doesn’t know where the money is going. There are no clean audits. Politicians are spending money based on campaign contributions,” she said.

Kenric Ward is a national correspondent for and chief of its Virginia Bureau. Contact him at or at (571) 319-9824. @Kenricward