June 27, 2012
Credit: Credit: Architect of the Capitol
Sen. Kelly Ayotte (R-N.H.) thinks the potential for “sequestration” budget cuts already threatens the nation’s defense, industrial base and economy. But she also thinks members of Congress should want to avoid huge numbers of layoff notices being issued in their districts days before November’s presidential election.
The current specter of sequestration — which would double the $487 billion in cuts the Pentagon already must make over the next decade if Congress fails to pass a budget that meets spending caps imposed last year by the Budget Control Act — is “a crisis that Congress created in the debt-ceiling deal that we did last year,” Ayotte says. “I voted against it. I didn’t like the way it was done. I wanted a real solution.”
Congress hasn’t acted sufficiently so far, says Ayotte, a member of the Senate Armed Services Committee. Meanwhile, she thinks everyone should call and write to their representatives and senators. Congress responds when things are on fire, she says. The sequester threat is smoldering, but won’t stay that way for long.
Ayotte spoke June 26 during separate events sponsored by TechAmerica and the Brookings Institution.
The Worker Adjustment and Retraining Notification Act (WARN), passed in 1988, requires companies to notify workers of mass layoffs or plant closings. The calendar of sequestration’s effective date and the requirements mean the notices would be given the weekend before the election at the latest.
This week, Lockheed Martin became the first defense contractor to announce it would probably send WARN notices to most of its more than 120,000 workers. But they won’t be the last. Other businesses are already preparing, even if they don’t yet know exactly what they’ll do.
“The reason I became so incensed about this,” Ayotte told the Brookings audience, is the certain devastation it would wreak on the industrial base, which starts with the big primes and contractors, down to the subs and many small business, single-item suppliers.
Panelists agreed that businesses will not wait until December to take action to protect their interests and shareholders. “Industry cannot, will not, eat the uncertainty,” said Max Boot, of the Council on Foreign Relations (CFR), at the TechAmerica forum. “I have complete sympathy for industry in this debate.”