Cheney, Lockheed CEO deliver dire warnings of impact of automatic cuts

Former Vice President Cheney made a rare trip to Capitol Hill on Tuesday to give House and Senate Republicans a dire assessment of what $500 billion in cuts to the Pentagon budget would mean for national security.

Cheney’s appearance came amid a concerted lobbying push from the defense industry, which is trying to persuade Congress to act now on the sequester by warning the cuts will lead to massive job losses. 

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Lockheed Martin CEO Bob Stevens, who will testify before a House panel on Wednesday, has threatened to issue layoff notices to all of his company’s 123,000 employees just before the November election. And the Aerospace Industries Association unveiled a new study Tuesday that claimed 2 million jobs could be lost due to the automatic cuts that are scheduled for both the defense and domestic sectors.

Defense hawks hope that the flurry of activity will put the issue in the public eye and convince Congress to act.

Cheney, who served as Defense secretary under President George H.W. Bush, told the Senate GOP conference that sequestration could have a damaging long-term impact on the military by killing major weapons programs, according to senators at the meeting.

“He just talked about the stupidity of the sequester, where you cut everything the same,” said Sen. Tom Coburn (R-Okla.).

Cheney’s appearance underscored the effort Republicans are making to apply pressure to Democrats, who are threatening to walk away from the negotiating table on sequestration unless the GOP agrees to tax increases.

 “It was just really a very sensible presentation about how sequester is a blunt object,” Sen. Bob Corker (R-Tenn.) said of Cheney’s talk. “He did talk about his time as Defense secretary in the ’90s and how he benefited from investments made the decade before.”

 Cheney did not discuss potential fixes for the cuts, GOP senators said, or other foreign-policy issues such as Syria.

Democrats were decidedly unimpressed. White House deputy press secretary Josh Earnest said it was “odd” that Republicans “would be taking budget advice from somebody who famously declared that ‘deficits don’t matter.’ ”

 Senate Majority Leader Harry Reid (D-Nev.) questioned Cheney’s motives, noting his ties to the military contractor and oil giant Halliburton.

 “We know that before he became vice president, he worked for Halliburton,” Reid told reporters. “Halliburton did extremely well during his time as vice president, and I assume there’s going to be some concern about Halliburton again in this conversation they’re going to have today.”

 The sequestration debate is likely to dominate Capitol Hill on Wednesday, when defense executives will testify before the House Armed Services Committee and the House takes up the Sequestration Transparency Act, which requires reports from the Obama administration on the impact of the cuts.

 Stevens, one of four executives scheduled to testify before the panel, has led the charge in the defense industry to warn about job losses from sequestration.

 The Lockheed chief’s argument was boosted Tuesday when AIA, a leading defense industry trade group, released a report claiming the sequestration cuts would result in the loss of 2 million jobs, including about 1 million to the defense sector.

The report was the second from AIA to project devastating job losses from the spending cuts. 

 Critics such as Stimson Center defense analyst Gordon Adams have accused AIA of inflating the job-loss numbers for political gain.

 Speaking at the AIA event Tuesday, Sens. Kelly Ayotte (R-N.H.) and Jeanne Shaheen (D-N.H.) pushed for a one-year delay in the cuts, which they said would give lawmakers more time to reach a deal.

 Congressional lawmakers cannot afford to be “playing political chicken” over sequestration with so many American jobs on the line, Ayotte said. 

 “We need to send a signal … we are serious about addressing this issue,” Shaheen said. 

 While both senators agreed a yearlong delay would be a step in the right direction, the two parties remain at loggerheads over a long-term solution. 

 Democrats have been adamant that any compromise on sequestration must include revenue increases or the elimination of tax loopholes for the wealthiest Americans. 

“You can’t get there without revenue [increases] on the table,” Shaheen said, reiterating her party’s line.

 Republican lawmakers, however, have been opposed to any effort allowing the Bush-era tax rates to expire. 

At a media event last month, Stevens said he thought all options had to be included in a deficit-reduction deal, including discretionary spending, mandatory spending and new revenues.

The Lockheed CEO, who is retiring at the end of the year, is expected to urge Congress on Wednesday to find a solution now in order to give the industry some certainty.

Stevens has said that his company would be required to put out layoff notices just days before the election due to federal 60-day reporting requirements.

Republicans have supported Stevens’s threat, saying the layoff notices will help the public understand the impact of sequestration.

“I’d just as soon they did it tomorrow,” Sen. John McCain (R-Ariz.) said Tuesday.

Senate Armed Services Committee Chairman Carl Levin (D-Mich.) said he would understand if the companies decided to issue pink slips before the election, but doubts it would have much impact at the polls.

“I think by then probably most people will have made up their minds,” Levin said. “That’s my hunch.”


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