Growth in Woodlawn

Social Security and the Centers for Medicare & Medicaid Services in Woodlawn are poised to grow over the next decade. (Lloyd Fox, Baltimore Sun / February 3, 2012)

Despite budget cuts and anti-government rhetoric in Congress, Maryland officials say the two huge federal agencies based in Woodlawn — which have long helped buoy the region's economy — may be better positioned than others to ride out the political turbulence expected over the next several years.

An aging baby boomer generation should insulate the Social Security Administration and the Centers for Medicare and Medicaid Services from looming cuts, economists say. And there will be even more work at the Medicare-Medicaid office, known as CMS, if the nation's new health care law takes effect.

The fate of the two agencies, which have been based in Baltimore County for decades, will have a significant impact on the entire regional economy. Social Security has more than 10,000 workers in the county, making it the fifth-largest employer in the region — bigger than Northrop Grumman or Walmart, for example — state figures show.

CMS, a separate agency that is part of the Department of Health and Human Services, employs 2,750. Statewide, the two agencies have 15,972 workers, according to the U.S. Office of Personnel Management, and spent $1.3 billion in Maryland in 2010.

"It's the only growth industry out there that's guaranteed to serve more and more people," said Baltimore County Executive Kevin Kamenetz, who is working to improve relations with the federal agencies and spur development in the land adjacent to their sprawling complexes on Security Boulevard.

"We have to treat these agencies like any other business."

With the federal budget deficit projected at $1.1 trillion, government agencies and employees are being targeted in an effort to control spending. The Republican-led House of Representatives has voted to extend a two-year pay freeze for civilian federal workers for another year, potentially saving taxpayers $26 billion.

Congress, meanwhile, faces $1.2 trillion in across-the-board spending cuts by the end of the year, the result of the failed "super committee" on deficit reduction. Lawmakers are also considering cuts to federal salaries and benefits to offset the $100 billion cost of extending a payroll tax cut for all U.S. workers.

"The current size of the federal workforce is fiscally unsustainable," Rep. Dennis A. Ross, a Florida Republican and chairman of the House subcommittee on the federal workforce, said in a recent hearing on Capitol Hill. "Taxpayers can no longer be asked to foot the bill for a bloated federal workforce."

But the fact that the nation's population is getting older — and will come to rely on the programs administered at Woodlawn — is not up for debate.

Every month, 40,000 more people sign up for Medicare, the government health insurance program for the elderly, than leave the system. The number of Social Security beneficiaries has increased 22 percent since 2000 to 55.4 million. That figure includes disability benefits.

The growth in those programs may give SSA and CMS a leg up over other federal agencies based in Maryland — such as the National Institutes of Health in Montgomery County or the Census Bureau in Prince George's County — when lawmakers look at spending cuts.

"Maryland is at substantial risk to the expected federal measures to control spending," said Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute. "But these two agencies are serving a growing part of the population and a politically active constituency."

Social Security, which was created in 1935, was based a year later in the Candler Building in downtown Baltimore after engineers discovered that no structure available in Washington at the time could support the weight of the paperwork the agency was expected to create.

In 1960, the agency moved to its current home in Woodlawn.

The new campus transformed the largely rural landscape, spurring residential and business development in the area, said Tom Parrott, a Social Security employee and Catonsville resident who remembers Woodlawn before the agency moved in.

"It boomed for a while," said Parrott, associate commissioner in the Office of Legislative Development and Operations, who has worked for the agency since 1975.

Though there is not a great deal of development immediately surrounding the campus today, economists say the two agencies have a major impact on the region's economy.

"Many Baltimoreans don't even realize that our region has been very fortunate throughout the downturn," said Anirban Basu, chairman and chief executive officer of the Sage Policy Group. "It's something we take for granted."

The Baltimore-Towson metro area's unemployment rate was 6.8 percent in December, below the 8.3 percent national rate. Maryland's jobless rate was 6.7 percent in December. In all, 289,694 civilian federal employees live in Maryland, about 10 percent of the state's workforce.