Baltimore area's federal agencies a 'growth industry'
By By John Fritze and The Baltimore Sun
Feb 13, 2012 at 6:37 AM
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 baseda 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.
For some, like Tony Trenkle, taking a job at Woodlawn meant working for an agency whose mission he supported without having to endure the slog of a daily commute to Washington. The Howard County resident said he hears from many Baltimore-area co-workers who also appreciate having work close to home.
CMS, part of which was once under the purview of Social Security, consolidated in Woodlawn in 1977. The agency now has a separate campus about two miles away.
The agencies are the fuel for some Woodlawn businesses.
At New Kiani's Pizza and Subs, a small carryout and delivery operation tucked into a strip mall at Johnnycake Road and Ingleside Avenue, federal workers make up a majority of customers, said owner Mohammad Ashraf.
"All day long, seven days a week," Social Security employees stop in to pick up food, said Ashraf, who has run the restaurant for 18 years. Others call for delivery to the headquarters complex. But he said he doesn't worry about the possibility of a shrinking federal workforce in the area because that's out of his control.
About two blocks east at Pat's Pizzeria, about 80 percent of the customers in the dining room over lunch are from Social Security, said proprietor Akram Hamed. The restaurant has gained a large following of federal employees, who flood the phone lines in the morning to place delivery orders for later in the day, he said.
But the economic impact is far broader. Trenkle, the chief information officer at CMS, said the agency works aggressively to support the local economy, both through its network of Baltimore-based contractors and in hiring graduates from local universities and colleges.
Other federal Woodlawn employees pointed out that they contribute to the economy in the same way private-sector workers do, by shopping in stores throughout the Baltimore area and sending their sons and daughters to local universities.
"We're all consumers," said Lorraine Tunis Doo, acting deputy director and a senior policy adviser at CMS who lives in Towson. "That has a big impact."
That's part of the reason state and local officials are working to keep the agencies in the region, particularly as the campus begins to age. Many were alarmed last year when the General Services Administration announced it was moving a Social Security data center — along with several hundred jobs — from Baltimore County to Frederick County.
The GSA, which serves as the federal government's landlord, is conducting a yearlong study of the Social Security complex to assess the agency's future,officials said.
Sen. Benjamin L. Cardin, a Maryland Democrat, said he has talked to everyone from the president to officials at GSA and has received "strong assurances" about the government's commitment to maintaining its presence at Woodlawn. "We're feeling pretty confident that the policy direction of our nation as well as the work product of Woodlawn means a bright future," he said.
For his part, Social Security Commissioner Michael J. Astrue echoed those assurances in a recent interview, saying the agency is "very committed" to remaining in the area.
"A lot of our people grew up here, worked their way through the system," Astrue said. "We're excited about being part of the revitalization of the area."
Nevertheless, Kamenetz said he isn't taking any chances. He has appointed a liaison who meets regularly with federal officials at the agencies. The county also created an "enterprise zone" last year that provides tax breaks to companies that expand in the area immediately surrounding the federal campuses.
Local officials are also promoting Baltimore's planned Red Line project, a 14.5-mile, east-west light rail route that will stop near the federal complex, as key to increasing development in the area and making the agencies more attractive to potential employees. The GSA has been promoting the idea that new federal office buildings should be located near mass transit.
There are some early signs of progress from those efforts. A Virginia-based technology company called CSC, which develops software for CMS, recently announced it is expanding its operations in Baltimore County to meet the agency's demands. The company has 423 employees in the county,many of whom were hired in the past year.
Alisoun Moore, vice president of CSC's health services division, said the company has been helping the agency prepare for the new health care law, most of which is set to take effect in 2014, and also has been working on the push to computerize medical records called for in the 2009 economic stimulus law.
"It just makes sense to expand" in Woodlawn, Moore said. "They're going to have a lot of work to accomplish."
Baltimore Sun reporter Steve Kilar contributed to this article.