Republicans: Obama administration hiding big job losses from sequester

Republicans accused the Obama administration Tuesday of intimidating defense contractors and seeking to hide job losses from pending cuts to the Pentagon’s budget in order to help the president’s reelection campaign. 

Senate Minority Leader Mitch McConnell (Ky.) and other Republicans pointed to guidance issued Monday by the Department of Labor that said it would be “inappropriate” for defense firms to issue layoff notices to employees before the election due to the pending cuts.

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“The president doesn’t want people reading about pink slips in the weeks before his election, so the White House is telling people to keep the effects of these cuts secret — ‘Don’t tell anybody,’ he says, ‘keep it a secret’ — until, of course, after the election,” McConnell said on the Senate floor Tuesday.

Democrats responded by accusing both Republicans and the defense industry of playing politics themselves with threats of job losses and layoff notices. Republicans have used the layoff threats to bash President Obama for not acting now to prevent the pending cuts to both the Pentagon and non-defense domestic spending. 

House Armed Services Committee ranking member Adam Smith (D-Wash.) said that there was no reason to “needlessly alarm hundreds of thousand of workers” with the notices when sequestration’s outcome remains unknown.

And Senate Armed Services Chairman Carl Levin (D-Mich.) questioned Republican charges that the Labor Department guidance was politically motivated.

“I don’t think they ought to attribute political motives to every action, and that’s their tendency these days,” Levin told The Hill.

Lockheed Martin CEO Bob Stevens pressed the issue last month when he threatened to issue layoff notices to all 123,000 of his employees on the Friday before the election due to a provision in U.S. labor law requiring large employers to notify employees 60 days in advance of layoffs caused by a foreseeable event. 

Trade groups have claimed 1 million defense jobs could be at risk from the pending cuts, which are known as sequestration and were triggered by the failure of a supercommittee of lawmakers to reach a debt deal last year. 

Sen. John Cornyn (R-Texas) on Tuesday accused the administration of trying to “intimidate” contractors from properly warning their employees that jobs could be at risk.

“I think it’s really disgusting, quite frankly,” Sen. Lindsey Graham (R-S.C.) said of the guidance. “The companies have to comply with the law, and the law of the land is come January, sequestration begins.”

The Labor Department and Democratic congressional aides have argued that the 60-day layoff notices under the Worker Adjustment and Retraining Notification (WARN) Act don’t apply because sequestration cuts remain an uncertain event, while the WARN Act refers to specific contract actions and locations.

“Without any detailed information here, it’s crazy to say you need to warn your entire firm that jobs may be at stake in the sequester,” said Gordon Adams, a defense analyst at the Stimson Center. “It’s not consistent with the WARN Act.”

But John Irving, a former NLRB general counsel appointed by former President Ford who worked on negotiating the WARN Act, said that the guidance was incorrect. He said that the Labor Department does not enforce the act and employers could still face lawsuits from employees despite the guidance.

“The Labor Department doesn’t determine whether a company has failed to give the warn notices,” said Irving, now a counsel at Kirkland and Ellis. “Even the Labor Department has said, in advisory interpretations of the WARN Act, that when in doubt you are supposed to give notice.”

Of course, the Labor Department guidance still does nothing to prevent companies from ultimately sending the WARN Act notices. A spokesman for Lockheed Martin said the company was still reviewing Monday’s guidance.

The partisan fight over the layoff notices is the latest front in the larger war in Washington over sequestration, the $1 trillion, 10-year cut to defense and non-defense spending set to hit Jan. 2.

The fight is poised to bubble over on Wednesday when acting Office of Management and Budget Director Jeffrey Zients comes to Capitol Hill to testify before the House Armed Services Committee on implementing sequestration.

Republicans have repeatedly criticized the Obama administration for not planning for the cuts, arguing that the defense industry has to prepare for layoffs because of the uncertainty surrounding the sequester.

They have accused President Obama of being AWOL in trying to fix sequestration as their party’s presumptive presidential nominee, Mitt Romney, has attacked Obama on cuts to the military.

Zients announced in a letter to Capitol Hill Monday that military personnel accounts would be exempt from sequestration, something the law gives the president the ability to do. While the decision was widely expected, it was criticized by three Republican senators for avoiding difficult decisions on sequestration. 

The GOP senators, Sens. John McCain (R-Ariz.), Graham and Kelly Ayotte (R-N.H.), launched a four-state, two-day sequestration tour Monday, visiting presidential battleground states in an attempt to mobilize the public against the cuts.Senate Majority Leader Harry Reid (D-Nev.) took aim at the trip Tuesday, saying the GOP senators were “wandering the country stirring up things on sequester.”

He applauded McCain’s and Graham’s willingness to negotiate on revenues but said they should spend their time instead bringing other Republicans on board.

“By refusing to replace cuts with revenues, Republicans are putting millionaires ahead of the middle class and the military,” Reid said, echoing a line from Obama last week. “We could avoid these defense cuts tomorrow if Republicans would simply agree to ask millionaires to pay their fair share.”

Both parties want to avert the sequestration cuts, but have deep disagreements over how to find the alternative deficit reduction to do so. Democrats say new taxes must be part of the deal, while Republicans want mandatory spending cuts, making a deal unlikely before the election.

— Pete Kasperowicz and Carlo Muñoz contributed.