Businesses Nervous About Super Committee

FBN's Gerri Willis on the impact of the Super Committee's potential cuts on businesses that rely on the government for much of their revenue.

This article is part of the series

Time to Get Serious About Budget Cuts

By Columns FOXBusiness

We are looking ahead to the Super Committee - you know the group formed by the debt deal to do the work that Congress failed to do -- find serious budget cuts!

As a result, businesses are preparing for some serious belt-tightening. This group of lawmakers is tasked with finding $1.5 trillion in cuts - on top of the $2.5 trillion already agreed to in the recent debt deal.

So why does this make business nervous? According to the Wall Street Journal, more than 80 companies get at least a fifth of their revenue from Uncle Sam.

Lockheed martin gets almost 100% of its revenue from the government - and this company could take a big hit when those cuts come through.

The deal signed by President Obama cuts $350 billion from the Defense Department over the next decade. And if the Super Committee fails to act - which let's face it, anything could happen - $600 billion more will be automatically taken out of the Pentagon budget!

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Then there's Humana! Yes we can't talk about government spending without talking about health care, right? More than three-quarters of their business is government-based. Humana deals mostly with Medicare - which seems to have been left unscathed in the latest deal.
But cuts down the line are all but certain. According to the paper, nursing homes will see an 11% cut in Medicare payments this fall. Hospitals won't be off the hook either - half of their revenue comes from government sources!

Plus - that's just going to increase once Obamacare kicks in in 2014 - don't even get me started on that!

Another company expected to get hit - Motorola. Two-thirds of its revenue comes from local governments - selling radios and phones to police and fire departments.

This administration has always been a big proponent of technology - as evidenced by a nearly 7.5% bump in government spending on the sector last year. But research firm IDC expects that spending to be flat by 2013.

This belt tightening comes at the worst possible time for U.S. workers -- 9.1% unemployment means job security is a thing of the past. More layoffs will mean higher joblessness.

However - these cuts come at a time of necessity - if we don't shrink government, we face an even worse economic environment. Cutting spending may be a tough pill to swallow in the short term, but it could be the tonic that cures in the long haul.

Be sure to catch the Willis Report on the FOX Business Network every weekday from 5-6pm ET.

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