Dismayed at a returning Congress still struggling to avert automatic budget cuts, defense contractors could soon alert thousands of employees their jobs are at risk.
The defense industry is gambling that neither Congress nor the White House wants headlines about potential layoffs so close to Election Day — and that the threat of layoff warnings could push lawmakers and President Barack Obama into resolving a budget standoff that has dragged on for more than a year/.../
One of the big questions is whether defense contractors would have a legitimate need to reduce their workforces soon after Jan. 2 — or if their layoff threats are a political ploy meant to spur Congress to act to prevent sequestration.
Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments, said it’s the latter.
In August, Harrison released a report that said it would be three to four years before contractors felt the full effects of sequestration. In the next fiscal year, the reduction in Pentagon outlays, or expenditures, would be about 4.6 percent.
“There’s actually some cushion there for the defense industry,” Harrison told reporters. “When [contractors] tell you their labor force will have to be cut by 10 percent — it’s true. It just won’t happen in January.”