June 26, 2012A movement is building in Congress and the defense industry that challenges the common assumption that the government’s array of unresolved budget decisions can wait until after the November elections, a senator said Tuesday before a panel organized by the contractors group TechAmerica.
Automatic cuts to the Defense Department budget scheduled to take effect Jan. 2, 2013, under the Budget Control Act’s sequestration threat would “render the administration’s defense strategy a mockery” while imposing “devastating impact on the defense industrial base,” said Sen. Kelly Ayotte, R-N.H., ranking member on the Armed Services Readiness and Management Support Subcommittee.
To head off across-the-board cuts in which “everything is done insufficiently,” Ayotte called for a small bipartisan working group from both chambers to pursue a two-year budget deal to cut $109 billion per year from the federal budget “by reducing borrowing and living within our means for a month.” That could give the country “some breathing room” before lawmakers take on the long-term need for a consensus on spending cuts, tax reform and entitlement reform, Ayotte said.
She touted the bill she introduced with other Republican senators last winter that would incorporate many of the spending cuts in the Simpson-Bowles deficit reduction plan. Her 2012 Down Payment to Protect National Security Act would extend the federal civilian pay freeze through 2014 and replace every three federal employees who leave government with two hires until the workforce shrinks by 5 percent.
The prospect of major cuts in troop strength, weapons and intelligence capability at a time when military threats have not receded “keeps me awake at night,” Ayotte said, quoting a general who said sequestration “would render the Marines incapable of doing a single contingency operation.”
Citing alarms being raised by the National Association of Manufacturers and large contractors about job losses in all 50 states, Ayotte also warned that the uncertainty in the Pentagon’s long-range planning soon could require contractors to issue thousands of layoff notices with 60 days’ lead time as required under the 1988 Worker Adjustment and Retraining Notification Act.
“Congress is beginning to wake up” to the fact that it must act before a lame-duck session, she said, calling the need to avoid sequestration “a sleeper issue in the presidential campaign.” She said neither members of Congress nor President Obama as commander in chief would relish campaigning with the “distraction of thousands of WARN Act notices going out because they didn’t take responsibility before the election.” Mayors and governors who might see cuts in their national guards, she added, also are becoming aware of this “smoldering fire that will light up.”
Asked whether sequestration could be avoided by considering a tax increase, Ayotte said, “it’s irresponsible to hold national security in the balance, to use it as lever for some other issue such as the Bush tax cuts or the doc fix,” referring to the 2001 and 2003 tax cuts due to expire this year and the regular need to raise Medicare’s physician reimbursement rates. “At some point, there will be $1.2-trillion deal done in a way that doesn’t damage the economy. But to say we have to suddenly hurt the rest of the economy to solve the problem is a false choice.”
Michael O’Hanlon, director of research and a senior fellow at the Brookings Institution, also pushed for action before the election, saying lame-duck sessions seldom achieve much because “often there’s no clear mandate, the losing party has an excuse to say the results don’t reflect the true hearts of the American people, or they’re already planning for the next election and Congress is still divided.”
O’Hanlon also warned that without action to shore up the defense budget, “American power is on a shaky foundation, and our role in the world is on the cusp of being at risk.”
Max Boot, a conservative author and foreign policy analyst at the Council on Foreign Relations, said, “Congress is asleep if they think they don’t have to get this done before the election. If they want to usher in a China century, there’s no better way than sequestration.”
Steven Bucci, senior research fellow for defense and homeland security at the Heritage Foundation, said defense contractors “will not eat this uncertainty, but will take whatever prudent means to protect their company and their shareholders -- they are not charities.” The need to avoid “mindless sequestration is the one issue that the Heritage Foundation, the Council on Foreign Relations and Brookings agree on. Do we want to give up our dominant position in the world? “
June 26, 2012