The Herald Banner, Greenville, TX

February 14, 2013

Economist urges look at sequestration

By JOSEPH HAMRICK
Herald-Banner Staff

GREENVILLE — A major player in Greenville’s economy could be impacted by legislative inaction in Washington D.C., John Duca warned attendees of the Greenville Chamber of Commerce’s Economic Forecast Breakfast Wednesday morning.

Duca, vice president of the Federal Reserve Bank of Dallas, asked county residents to keep an eye on the predicted sequestration and its potential impact on L-3 Communications Integrated Systems.

“We need to get past uncertainty,” he said. “What’s going to happen with L-3 when the sequestering comes in two months?”

Sequestration is a series of mandatory budget cuts to federal programs, which will go into effect on March 1 if Congress cannot pass a deficit reduction bill. Approximately $1.2 trillion would be cut in the next 10 years from federal spending.

On Feb. 12, Air Force Chief of Staff Gen. Mark A. Welsh III told the Senate Armed Services Committee that if the sequestration takes place, “It will significantly undermine your Air Force’s readiness and responsiveness today.”

L-3 will release a statement in the next few days regarding the potential sequestration’s impact on its defense contracts.

On a positive note, Duca said the Texas economy, especially the Metroplex, is benefiting from the country’s natural gas surge.

“The Texas economy outperforms the nation,” he said. “Houston and Dallas produce a lot of equipment for fracking.”

Fracking is a process by which natural gas is extracted from rocks. Along with benefiting from fracking, Duca said a lot of chemicals can be produced using natural gas, which will continue to fuel the Texas economy.

According to Duca, the Rockwall and Royse City housing boom will soon make its way into Greenville.

“Don’t be surprised to see the housing boom coming closer next time,” he said.