Military contractors to testify on potential defense cuts

July 17, 2012

House Republicans will call on the leaders of major military contracting firms Wednesday to detail how they plan to deal with the roughly $500 billion in defense spending cuts set to take effect over the next decade.

The hearing before the House Armed Services Committee is part of an effort to paint President Obama as the person responsible for the potential reductions.

Top executives with EADS North America, Lockheed Martin, Pratt and Whitney, and Williams-Pyro are scheduled to appear before the committee a day after a report commissioned by the aerospace industry warned that cuts in defense spending could cost more than 2 million jobs and raise the national unemployment rate by 1.5 percentage points over the next year.

None of the companies has released specific plans to address the cuts, but Lockheed chief executive Robert J. Stevens said last month that his firm may need to notify all employees of the possibility of job losses as early as September or October in advance of the reductions. Current law requires contractors to give employees 60 to 90 days’ notice — depending on the state — of an event that might cause significant job losses or facility closures.

The hearing comes as the GOP-controlled House plans to begin debating Wednesday a bill that would require the White House to detail how it would implement roughly $110 billion in Pentagon and non-defense spending cuts set to take effect in January. The Sequestration Transparency Act mirrors a proposal that has not advanced in the Senate, but is expected to easily sail through the House.

Republicans hope that focusing on the potentially adverse affects of the budget cuts will hurt Obama in states with major military presences, especially Virginia — a must-win state for Obama and Republican presidential rival Mitt Romney.

The automatic budget cuts — commonly referred to as “sequestration” — were designed to be painful so that lawmakers would be compelled to agree on a long-term deficit-reduction plan authored by the bipartisan congressional “supercommittee.” But the panel’s talks collapsed last year without a final agreement, and negotiations over a new plan will likely not occur until after the November election.

Ahead of the vote, former vice president Richard B. Cheney huddled Tuesday with House and Senate Republicans to discuss his concerns with the defense cuts and to suggest potential alternative proposals.

Cheney took no questions after his meeting with senators, but Sen. Tom Coburn (R-Okla.) offered that the former vice president “was just talking about the stupidity of the sequester, where you cut everything the same.”

Ed O’Keefe is a congressional reporter with The Washington Post and covered the 2008 and 2012 presidential and congressional elections.
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