The Obama administration is taking criticism from Republican lawmakers for encouraging defense contractors not to give out layoff notices this year to prepare employees for the possibility of massive sequestration-spurred layoffs in January/.../
However, Todd Harrison, a senior fellow at the nonpartisan Center for Strategic and Budgetary Assessments, said WARN Act notices would not be necessary this year, calling it little more than political theater. He believes there will be no defense contractor layoffs due to sequestration in January.
“From a defense industry perspective, whatever [contractors] were working on before Jan.2, they will be working on after Jan. 2,” he said, since that work has “already been funded.”
Defense Department comptroller Robert Hale testified during a congressional hearing last month that no signed contracts would be canceled as a result of sequestration on Jan. 2.
Sequestration would have “a delayed effect on the defense industry,” Harrison said.
It would first hit unobligated funds, likely hitting the ordering of equipment first. That could happen within months after sequestration starts, leading to layoffs and reduced hiring later in the year. More layoffs would be expected in future years, he said.
As a result, the recent Republican uproar over the government’s potential liability for lawsuits resulting from a failure to issue WARN Act notices this year, from the guidance, is “kind of a nonissue,” he said.
Nor should the guidance leave the government open to picking up the tab on the cost of future WARN Act-associated lawsuits, as Republican lawmakers have implied. The guidance is specifically for potential Jan. 2 layoffs, he said, and the administration would likely send out revised guidance if the situation changes.
However, sequestration, in addition to resulting in across-the-board cuts of about 10 percent, would also prompt the furlough of 100,000 civilian defense employees, likely beginning within weeks of the new calendar year and lasting through Sept. 30, the end of the fiscal year, he said.
With the election nearing and voters to be courted, Harrison does not expect the uproar over contractor layoffs to die down soon.
“We’ll continue to see this political fight now until the election,” he said.