Facing economic uncertainty, defense contractors are plotting to spur Congress to nix the automatic budget cuts set to begin next year.
The plan? Threaten to send out layoff notices — hundreds of thousands of them, right before Election Day.
Congress, industry leaders contend, has left them few options. Federal law, they say, requires employers to give notice of 60 days to workers facing layoffs.
For President Barack Obama and congressional incumbents, the timing couldn’t be worse. With the automatic cuts, called sequestration, set to begin taking effect on Jan. 2, the layoff notices would have to be sent out by Nov. 2 — four days before this fall’s elections/.../
In Congress, there has been a mixed reaction to the looming cuts. For some members, sequestration is having its intended effect: Prodding lawmakers to agree to a deficit-reducing compromise — one that includes both Democratic priorities, such as new revenues, and Republican priorities, such as cuts in Medicare and other social programs.
For others, sequestration has caused them to become only further entrenched in their positions. House Majority Leader Eric Cantor (R-Va.) has indicated he doesn’t favor a grand bargain with Democrats and believes the differences between the two parties will have to be decided in the Nov. 6 elections.
But if no deal is reached before the election, it could be sitting members of Congress — in both parties — who suffer.
“If it really did happen, if hundreds of thousands of layoff notices went out right before the election, it could hurt incumbents – mainly, the president,” said Todd Harrison, a defense expert at the Center for Strategic and Budgetary Assessments.
“You could do a layoff notice that just informs people they might be laid off, and you could do that very broadly,” Harrison added. “Do companies make the notices go to all of their employees, half of their employees or just the 10 percent of their employees who are likely to be affected?”