LOS ANGELES — The nation’s military contractors say they are preparing to shut facilities, tear up supplier contracts and issue pink slips to thousands of aerospace employees to deal with proposed federal budget cuts threatening to hit Pentagon spending.
LOS ANGELES — The nation’s military contractors say they are preparing to shut facilities, tear up supplier contracts and issue pink slips to thousands of aerospace employees to deal with proposed federal budget cuts threatening to hit Pentagon spending.
After a decade of heady growth amid the military buildup following Sept. 11, 2001, contractors had already braced themselves for $487 billion in cuts over the next decade. But an additional $500 billion in cuts are now being discussed in Washington.
The new cuts are part of an automatic round set to take effect in January if Congress fails to reach an agreement on reducing the mounting federal deficit.
Although there is much speculation about whether Congress would let those automatic cuts actually occur in January, military contractors are ringing alarms now. Pentagon boosters in Congress, including Rep. Howard “Buck” McKeon, a California Republican and chairman of the House Armed Services Committee, are also issuing stark warnings.
“Congress is playing political chicken with people’s jobs,” McKeon said in an interview. “The clock is ticking.”
The automatic cuts would come if a budget deal fails to emerge in Washington. Under a law approved last year, federal funds of all kinds would be held back — “sequestered” — until there is agreement, at which time the funds may or may not be reinstated. Congress passed an amendment last week, calling on the Obama administration to specify which federal programs would be affected.
The buzzword used by contractors is “sequestration,” and aerospace workers and subcontractors will be hearing that word a lot in the months ahead.
The Aerospace Industries Association, a trade and lobbying organization in Arlington, Va., has estimated 1 million jobs of all kinds nationwide would be lost if sequestration occurs.
Still, there is skepticism about whether sequestration will take place. If it happens, it would affect both military, which is a core issue for Republicans, and social spending, which is important to Democrats, said John Pike, director of GlobalSecurity.org, a website for military policy research.
“Because of the convergence of these two things, I have a hard time believing that sequestration will go forward,” he said. “I have tended to think the whole thing is smoke and mirrors.”
Meanwhile, military contractors are trying to raise awareness and drum up support. It’s essential, they said, because they are required by law to issue warnings to employees and suppliers when their jobs and contracts are in danger of elimination.