WASHINGTON — The White House capitalized on an extended congressional recess by offering to pay for defense firms’ sequestration-related legal and other bills, leaving hawkish lawmakers unable to push legislation to overturn that plan.
When both chambers return after the Nov. 6 elections, pro-defense lawmakers could attempt to quickly force votes in the House and Senate that would require federal contractors with more than 100 workers to issue layoff notices immediately. But congressional sources indicated there were no plans to do so.
One pro-defense lawmaker, Sen. Lindsey Graham (R-S.C.), attempted before Congress adjourned for six weeks to pass a bill that would have forced defense companies to send out layoff notices. But the measure was voted down Aug. 2 by the Senate Appropriations Committee in a 17-13 vote.
Other hawkish lawmakers, like Sens. Charles Grassley (R-Iowa) and Kelly Ayotte (R-N.H.), questioned whether the executive branch has the legal authority to issue such guidance to private-sector firms. Grassley and Ayotte told acting White House budget chief Jeffrey Zients in a letter Oct. 1 they were “seriously concerned” about the instruction to contractors and the determination that the government would pay contractors’ sequestration-related costs.
“In particular, we are concerned about the authority of the executive branch to instruct private employers not to comply with federal law and to promise to pay the monetary judgments and litigation costs that arise out of the lawsuits that may follow,” Grassley and Ayotte wrote. The duo has asked Zients to deliver lawmakers reams of information explaining the executive branch’s legal justification for its recent moves.
This means pro-defense lawmakers likely could be left playing defense should the $500 billion in cuts to planned spending happen, via a process called sequestration. Their best bet appears to be blocking any attempts by Pentagon officials to shift monies already allocated to pay companies’ sequestration-spawned bills.
That threat has been delivered to Defense Secretary Leon Panetta by Sen. John McCain (R-Ariz.), the Senate Armed Services Committee’s ranking member.
“I have advised [Panetta] that I intend to deny any transfer of funds among defense accounts to pay for these costs, including transfers that currently fall below the threshold of congressional notifications,” McCain said in an Oct. 3 statement. Such shifting of funds within the Pentagon’s accounts is typically done through reprogramming actions, which lawmakers must approve.
At issue is whether defense companies must abide by the Worker Adjustment and Retraining Notification (WARN) Act, which requires most companies with 100 or more employees to inform workers 60 calendar days in advance of mass layoffs. The White House says no; GOP lawmakers say yes.
The law has been in play for months as major defense contractors have been gearing up for the possible sequestration. The companies have been warning for months the cuts would force them to issue layoff notices this month, just before Election Day.
The White House’s Office of Management and Budget issued guidance stating that the Labor Department has determined a possible $500 billion, 10-year reduction to planned defense spending fails to create the conditions that would require defense companies to issue layoff notices. The guidance also states that federal agencies will pay companies’ legal bills and employee compensation costs caused by the potential cuts.
Lockheed Martin and BAE Systems have since said they will not issue the notices.
