Several members of the U.S. Senate are planning a full-court press to force the Pentagon to detail what would happen if Congress lets sequestration kick in, hoping the results would push fellow lawmakers into resolving the issue before contractors begin sending out mass layoff notices.
“We’re going to attach this to every bill that walks,” said Sen. Kelly Ayotte (R- N.H). “We’re going to get the information out line-by-line so we can get this thing resolved.” While senior Pentagon officials rarely miss an opportunity to mention that their half of the $1.2 trillion in budget cuts set to take place in January would be devastating to the military, they also insist they’re not planning for that eventuality. Leaders have argued variously that the cuts are so formulaic that no planning is possible and that they are so nonsensical that they should not be planned for.
“Planning has a certain rational tone to it, but Congress didn’t design sequester to be rational,” Deputy Defense Secretary Ashton Carter told the American Enterprise Institute a month ago. “Sequester was supposed to be the trigger. A trigger so irrational that the prospect of it would force the leadership to do what was needed. And indeed, aspects of sequester defy reason in any reasonable management of its affairs, including defense.”
Several members of the Senate who want to stop sequestration are unsatisfied with that answer. They agree the cuts would be devastating, but they want the Pentagon to lay bare precisely where the devastation would occur, particularly with regard to the defense industrial base, which programs would be cut and which contracts would be cancelled.
Ayotte, the ranking Republican on the Senate Armed Services Committee’s readiness subcommittee supported a successful move by Sens. John McCain (R- Ariz.), Patty Murray (D-Wash.) and others to attach an amendment to last week’s farm bill that would require DoD and the Office of Management and Budget to spell out exactly which programs the cuts would impact no later than Aug. 15. “We also had it in the Defense authorization bill but we were concerned that it wouldn’t get passed in time,” she said at a sequestration-focused event organized by TechAmerica. “But you may also see it in the flood insurance bill. We want to make sure it gets passed so that DoD actually has to do this. Several members of the defense industry have met with OMB and been told they’re not going to plan for this until after the election. The CEOs are left to wonder what they’re supposed to do with that.”
Ayotte said she’s not just concerned about the bottom lines of defense contractors; aside from the military readiness impacts of sequestration, she said her fellow lawmakers need to be made aware of the job losses that would result.
Contractors are required to give notice to workers 60 days in advance of any layoffs. Lockheed Martin, the federal government’s largest vendor, has said that unless it gets more certainty on the issue, it would have to send WARN Act notices to roughly 100,000 employees in early November.
“It’ll be interesting to see what happens in the presidential race,” said Ayotte, who has been mentioned as a potential running mate to presumptive Republican nominee Mitt Romney. “I see this as a sleeper issue in the race. I would think that the president would not have an interest in having all of these WARN notices come out before the election. Maybe he will urge us to get to the table to get it resolved.”
Thousands of layoffs not an idle threat
The prospect of sending out hundreds of thousands of layoff warnings just before election day isn’t just an idle threat by the defense industry, according to Steven Bucci, a defense research fellow at the Heritage Foundation and a former deputy assistant secretary of defense. He said contractors will have no choice.
“Industry cannot and will not eat the uncertainty, because they have a responsibility to their shareholders,” he said. “They’ll get in trouble with other parts of the government if they don’t take the prudent means they have to in order to protect their companies. They’re not running charities, and they can’t operate under this level of uncertainty.” Neither can the Pentagon, Bucci said. He believes despite repeated assertions to the contrary, the military’s leaders have been drawing up contingency plans for sequestration.
“Asking them to not plan is just crazy, and it cannot be true,” he said. “After all the time I spent there, they’re too obsessive-compulsive to not do this. Even if they’re doing it at home at night in their living rooms, they’re doing some planning. That’s what they’re supposed to do. If they’re not, we need to fire them all.”
The majority leaders in both the House and Senate have said they don’t plan to deal with sequestration until after the November election as part of a jam-packed lame duck session. Ayotte and the leaders of both parties on the Senate Armed Services committee say that’s too late to avert serious damage to the defense industrial base.
Michael O’Hanlon, a defense scholar at the Brookings Institution, said the delay also won’t make a deal any easier.
“Waiting for a mandate to emerge on Nov. 6 and hoping that the solution will become apparent and easy is a false hope,” he said. “Usually the parties disagree even about who won. The idea that we’re going to have a consensus about what the American people want and a clear mandate on Nov. 7 is too much to hope for. All the more reason to get to it now.”
Ayotte said that over the past few weeks, Congress and broader Washington have shown much more interest in the topic of sequestration and that small working groups on Capitol Hill are discussing the issue in both the House and Senate.
Open to revenue increases
Sens. McCain and Lindsey Graham (R-S.C) have already said they’re open to revenue increases if it means avoiding sequestration. Ayotte said she’s also willing to close “tax loopholes,” but not increase marginal tax rates.
One proposal she’s cosponsored with McCain and other GOP members would buy Congress additional “breathing room” by cancelling the first year of sequestration cuts. To pay for it, lawmakers would continue the federal pay freeze through 2014 and restrict hiring of civilian employees across all agencies until the federal workforce is five percent smaller than today.
Agencies would be allowed to hire only two employees for every three that leave federal service, but would be allowed to sidestep the limits for jobs they deem essential to national security, likely concentrating the cuts in non-defense agencies.
Asked by Federal News Radio whether across-the-board workforce cuts were any smarter than across-the-board budget cuts, Ayotte replied that the consequences of sequestration would be far worse for federal employees.
“We’re not laying anyone off,” she said. “The Simpson-Bowles commission concluded this was a financially responsible thing to do. But if sequestration goes forward, I guarantee there are going to be cuts to the federal workforce on the domestic end. And those won’t be through attrition.”