It’s not exactly bribery and extortion. Let’s call it, “the carrot and the stick.”
The Obama administration is getting serious about preventing defense contractors from issuing layoff notices when their government contracts are cancelled due to budget cuts occurring when sequestration happens on January 1, 2013. For the second time in the last couple of months, they have issued “guidance” for contractors regarding layoffs.
The “guidance” is worthy of The Godfather; they are making the contractors an offer they can’t refuse.
The Obama administration issued new guidance intended for defense contractors Friday afternoon, reiterating the administration’s position that the companies should not be issuing layoff notices over sequestration.
The Labor Department issued guidance in July saying it would be “inappropriate” for contractors to issue notices of potential layoffs tied to sequestration cuts. But a few contractors, most notably Lockheed Martin, said they still were considering whether to issue the notices — which would be sent out just days before the November election.
But the Friday guidance from the Office of Management and Budget raised the stakes in the dispute, telling contractors that they would be compensated for legal costs if layoffs occur due to contract cancellations under sequestration — but only if the contractors follow the Labor guidance.
The guidance said that if plant closings or mass layoffs occur under sequestration, then “employee compensation costs for [Worker Adjustment and Retraining Notification] WARN act liability as determined by a court” would be paid for covered by the contracting federal agency.
Senate Republicans, who accused the White House of trying to hide job losses after the first guidance, said Friday that the new OMB statement “puts politics ahead of American workers.”
“The Obama Administration is cynically trying to skirt the WARN Act to keep the American people in the dark about this looming national security and fiscal crisis,” Sens. John McCain (R-Ariz.), Lindsey Graham (R-S.C.) and Kelly Ayotte (R-N.H.) said in a statement. “The president should insist that companies act in accordance with the clearly stated law and move forward with the layoff notices.”
The fight over WARN Act notices began in June when Lockheed Martin CEO Bob Stevens said his company might send the notices to all 123,000 of its employees.
Some companies were hesitant to follow Lockheed, but several others told McCain in letters earlier this month they might send the notices, too, despite the Labor Department guidance.
But the new guidance would appear to address one of the chief concerns from the companies — that they could be liable to compensate employees who were laid off if the companies don’t issue the notices.
The GOP senators complained, however, that this tactic would push the cost of the layoffs onto taxpayers.
Apparently, if sequestration goes through and workers lose their jobs without getting a layoff notice, the company is liable to pay them anyway. The Obama administration has volunteered the tax payer to take care of that little political problem by bribing the companies and paying any wages owed to workers – as long as they don’t send layoff notices that would cause the unemployment rate to spike.
Speaking for myself, I would like the government to unvolunteer the taxpayer and put the burden back where it belongs; on companies who should be following the law, not helping Barack Obama get re-elected.
If anything, it is one more example of the huge power of incumbency and how a sitting president has the ability to shape events in his favor.
On the other hand, if they were not worried about the election, would they do this kind of arm-twisting?
No reason they can’t send out a pre-notice warning that notices may be issued if sequestration takes place.
I think it is time to have a societal discussion about what it is in J-schools that allows media bias to exist and flourish, and if in fact J-schoolsshould even be part of public univerisities.
For “if Bush had done this”….
So, because a negotiated agreement couldn’t be reached concerning the federal budget, we’ll be shutting down a significant chunk of our defense forces, along with their suppliers. We’ll be doing this because we have to start cutting the fed’s spending somehow, and this is the fallback scenario.
But if BO somehow manages to slide money to the affected companies so that the companies’ workers can remain on the payroll, and thus not become yet another group of unexpected unemployeds, then where exactly would the needed savings come from?
The man is just strikingly, jarringly dishonest at a very basic level. What’s worse, though, is that he makes no bones about it – indeed, he barely even tries to cover his lies at all anymore. He just looks out at us, makes up crap out of whole cloth, and then stares at us secure in the knowledge that no one is going to call him on it.
And his pet reporters – we need to find a new label for that profession, as there’s damned little reporting going on – his pets now scurry about trying to find ways to make his lies sound believable.
Now, as we approach the election, we’ll start seeing some of these pets start making tentative stabs at objective reporting. Think “sinking ship”, and rodents. But we need to remember the identity of every single one of his pets who gave us lies, or who simply ignored what BO wanted ignored, and we need to make certain that they all know that it’s far too late for them to return to honest reporting – and that we consider them to be lying whores. We can NOT simply give them another chance.
Definitely dishonest, and weak.
The W.A.R.N. act says that employers must do the notices or be in violation. Seems to be a clear cut bribery scam if the Obama administration is telling them to violate it anyway with the promise of covering those costs. Or is there a different standard as far as rule v. law?
US defense contractors are only concerned about what will happen in congress, since that is where their funding really comes from. Presidential administrations come and go. But congressional senators and representatives may stick around for decades.
We should also put this in perspective with what most state governments routinely do with public school teachers when confronted with budget cuts. They issue blanket lay-off notices to all teachers before the budget cuts even become approved.
This is nothing but a repeat; before the 2010 election he asked a solar company not to lay off people so it would refelct badly on him. People were layed off right after the election.
Most, but not all, defense contractors are public companies. Their Board directors and officers have a fiduciary responsibility to conform to the WARN act. Not do so would be a material event that requires an appropriate SEC filing. I can’t imagine that their D&O insurance carriers will give them a pass on SEC corporate governance filings. Skirting the law could put said Directors & officers in personal jeopardy.
Shareholders need to light up their email & telephones STAT.