Virginia, Florida, and Pennsylvania — all swing states — would take the hardest hit with more than 365,000 job losses combined thanks to sequestration, according to a George Mason University & Chmura Economics and Analytics report before the election. No notices of impending layoffs went out, and Obama won all three.
“Workers in America are hurting. That’s why it’s so important that if there’s a chance that they’re being laid off, they need to be given their WARN notices,” Furchtgott-Roth said before the panel. “We’re now at February 14th. The sequester is due March 1st. Even though you passed two bills to avoid the sequestration, it doesn’t look like the Senate and President Obama are following suit.”
She suggested simple cuts that could be made to save defense readiness include ditching the military push toward green fuels — which cost about $27 a gallon compared to $3.50 a gallon for regular fuels.
“I would suggest instead of eliminating the submarines or cutting back on submarines, instead of stopping to refuel the Lincoln, they should be thinking about how to make the military more efficient rather than less efficient by going green,” Furchtgott-Roth said.
She calculated that if workers weren’t properly WARNed, and 20 percent percent of workers at the seven major defense plants were laid off, taxpayers would be stuck with a price tag of about $1 billion in penalties for back pay and benefits.
“It’s unconscionable for the Office of Management and Budget, for our government, to be telling companies that they should break the law and that they will pick up the penalties for doing this. This is the kind of thing we read about happening in countries such as Russia and Venezuela. We should be very shocked that it is happening here,” said Furchtgott-Roth.
“And defense companies are being put in a very awkward position since the federal government is their major employer. And if someone comes to them and asks them to do this, they are caught between a rock and a hard place.”
Rep. Larry Bucshon (R-Ind.) noted Obama, supporting the WARN Act in 2008, said, “American workers who have committed themselves to their employers expect in return to be treated with a modicum of respect and fairness. Failing to give workers fair warning ignores their need to prepare for the transition. It adds insult to injury to close a plant without warning employees. Workers and their communities have a right to know when they are facing a serious risk of a plant closing.”
“This is just a long list of things where the administration subverts Congress,” Bucshon said. “And I can list — it’s a long list — immigration, welfare, NLRB appointments that were proven to be unconstitutional, and they’ve even attempted to tell Congress when or when we are not in session.”
Lockheed Martin said in a company statement after the New Year’s Eve fiscal cliff deal to avert sequestration that the cuts “threaten to weaken virtually all government programs and operations, damage our national security, and adversely affect our industry.”
“Until sequestration is permanently eliminated, there will be an overhang on our industry that stifles investment in plant, equipment, people, and future research and development essential to the future health of our industry.”
“Although it remains uncertain if sequestration will be implemented, it could have a significant impact on the U.S. Military, the Aerospace and Defense Industry and Federal spending,” Raytheon said in its 2012 results released at the end of January. ”Several industry associations estimate that sequestration, if implemented, could have a severe impact on U.S. Aerospace and Defense Industry employment nationwide. We believe that Raytheon’s large international market presence, portfolio of programs, technology and focus on high priority areas should help to mitigate some of the potential overall impact.”
Other contractors have been announcing new deals with the government in recent days, such as a $28 million order to BAE Systems from the Marine Corps to produce lightweight combat helmets. “This order allows us to continue production well into 2014,” said Eric Gavelda, director of Warfighter Protection at BAE Systems Protection Systems.