Updated Sequestration Budget Cut reports; Administration tells businesses NOT to send sequestration layoff notices


Center Releases Updated Defense Breakdown Economic Impact Reports for Congressional Districts, as Controversy Grows Over Obama Guidance to Businesses Not to Warn Employees about Possible Layoffs.

Will Businesses Lay Off Workers in Your Community Due to Sequestration Defense Budget Cuts?


For more information or to schedule an interview, contact
Christine Brim (cell 202-379-6776, office 202-835-9077) christine@securefreedom.org

WASHINGTON DC, October 8 2012: The Center for Security Policy released today an updated version of the widely-used “Defense Breakdown Economic Impact Reports” for cities, counties, congressional districts and states. The reports detail baseline revenues and estimated local economic impacts from the 2013 Defense budget cuts under sequestration. The “Defense Breakdown” reports are being used in dozens of communities across America by media, planners and elected officials, and are freely available at www.forthecommondefense.org/reports.

Voters are concerned about sequestration’s impact. According to the Aerospace Industries Association, “Four out of five likely voters in critical battleground states want our leaders in Washington, DC to find an alternative to ‘sequestration’ budget cuts before the November elections take place, according to a Harris Interactive online poll.”

Employees in your community may not be aware that sequestration layoffs can happen to them. In recent days, controversy has been growing over the Obama administration’s instructions to businesses not to comply with the WARN Act in the face of possible layoffs due to sequestration. The WARN Act requires employers to give employees at least 60-days notice of potential suspension or termination of their jobs.

Who are the defense contractors in your community? The updated “Defense Breakdown Economic Impact Reports” for congressional districts include a baseline of FY 2011 revenues earned by each contractor – with complete contractor contact information – at www.forthecommondefense.org/districts. Users can download individual spreadsheets for each congressional district and its bordering zip codes. All reports use FY2011 contract revenue data from the Federal Procurement Data System.

Why are defense contractors not warning workers in October and November about possible sequestration layoffs?

Sequestration defense budget cuts are expected to result in a nationwide loss of an estimated one-million jobs. WARN Act notices would normally have to be provided by companies with 100 or more employees in October and early November – just before the election – since the sequestration budget cuts will take effect on January 2, 2013. Instead, the administration has insisted that the WARN Act must not be followed by employers.

Critics of this suppression of WARN Act notices have questioned the administration’s timing. Rep. Howard P. “Buck” McKeon (R-CA) said in a statement: “Instead of engaging with Congress months ago to chart a resolution to this crisis, President Obama decided to issue politically motivated memos with dubious grounding in the law…Notifications will not be sent to those at risk, even though we have heard directly from CEOs in hearings this summer that layoffs will occur.” The administration has issued several of these WARN Act memos including:

  • Obama administration tells Businesses – Don’t warn employees: On July 30 2012, the Obama administration issued instructions to businesses that the WARN Act would not be enforced and notices did not need to go out to employees. The Department of Labor gave as its rationale that, since sequestration‘s potential effects on particular contracts had not been specified, there was insufficient basis to know the impact on employment so the WARN Act would not apply.
  • Obama administration tells Pentagon – Don’t make plans: On Thursday, September 27, the Obama administration affirmed its previous instructions to Defense Department civilians and military commanders that they are not permitted to make any plans for sequestration’s effects on particular defense contracts.
  • Obama administration tells Businesses – If employees sue you for not warning them, taxpayers will pay your legal costs: On Friday, September 28, the Obama administration issued new instructions to businesses that the federal government would pick up (ie, with taxpayer money) any costs or liability the companies face if they end up laying off employees without the required warning. The new instructions emphasized that employees were not to be warned because of “uncertainty about whether sequestration will occur and, if it did, what effect it would have on particular contracts.” Businesses were instructed that their legal costs would be paid by the government only if they do not issue warnings to employees about potential layoffs.

Critics of the administration’s position have sent their own notices to defense employers. On October 5, U.S. Senators John McCain (R-AZ) and Lindsey Graham (R-SC) sent a letter urging 15 major defense contractors to issue the layoff notices to their employees and stating that they ” plan to block any effort by the Administration to reimburse contractors who fail to provide the required WARN Act notifications.”

Use the “Defense Breakdown Economic Impact Reports” to investigate how sequestration will affect your community.

The “Defense Breakdown Economic Impact Reports” are a tool to help local officials and businesses prepare for the possible impact of job losses and harm to local communities from the sequestration budget cuts of $500 billion over the next 10 years. Defense businesses face $500 billion in sequestration defense cuts – in addition to a separate earlier $487 billion of defense budget cuts already taken, all to start in 2013. In total, defense budget cuts are estimated to total 18% for ten years starting in 2013. In contrast, in estimates thought to be understated, last year Russia reported increases in its defense budget of 9% and China reported increases of 6%.

The “Defense Breakdown Economic Impact Reports” provide detailed information about your community:

  • City, county and state reports (www.forthecommondefense.org/reports) show FY2011 defense contractor revenues with estimated Sequestration budget cuts of 18%.
  • Congressional district reports (www.forthecommondefense.org/districts ) show every contractor’s revenues in each congressional district (and bordering zip codes) for FY 2011, as a baseline (without estimated sequestration budget cuts), as well as complete contact information for each contractor.

The “Defense Breakdown Economic Impact Reports” are a project of the Center for Security Policy for the Coalition for the Common Defense, intended to educate and engage the American public on the importance of maintaining a strong national defense.
About the Coalition for the Common Defense
The Coalition for the Common Defense is an alliance of like-minded individuals and organizations who believe that without provision for the “common defense,” as articulated by the Founders, the freedom that has allowed unprecedented opportunity and prosperity to flourish in this country would soon be imperiled. In this new age of budgetary cuts, the Coalition rejects the false choice between military strength and economic health contending that economic prosperity depends on a strong national defense. Through a series of events and strategic partnerships, the coalition is calling on elected officials, candidates for office and others who share our commitment to the common defense to uphold these principles. We must return the United States to sensible fiscal principles without sacrificing our national security.
A full statement of principles can be located here. The Coalition of the Common Defense can be found online at www.forthecommondefense.org.

About the Center for Security Policy
The Center for Security Policy is a non-profit, non-partisan national security organization that specializes in identifying policies, actions, and resource needs that are vital to American security and then ensures that such issues are the subject of both focused, principled examination and effective action by recognized policy experts, appropriate officials, opinion leaders, and the general public.
For more information visit www.centerforsecuritypolicy.org.