Feds: Taxpayers could cover layoff costs under sequester
Taxpayers would be on the hook for the costs of laying off defense industry workers if automatic, across-the-board budget cuts were to take effect Jan. 2.
Defense giant Lockheed Martin, which backed off Monday from an earlier threat to issue thousands of layoff warnings later this month just as voters were preparing to go to the polls, said it welcomed a notice from the Office of Management and Budget that affirmed vendors could bill Uncle Sam if “contract actions” next year meant they were forced to close plants and lay off employees.
Continue ReadingThe notice also made clear that layoff notices under a labor law called the “WARN Act” would be in order in the run-up to potential cancellations, although those cancellations would likely take place months after the Jan. 2 budget restrictions, rather than on the same day.
“The additional guidance … ensures that, if contract actions due to sequestration were to occur, our employees would be provided the protection of the WARN Act and that the costs of this protection would be allowable and recoverable,” said company spokeswoman Jennifer Allen.
Lockheed CEO Robert Stevens warned earlier this year that he might issue layoff warnings in late October because the Jan. 2 onset of $55 billion in automatic cuts for fiscal 2013 — called sequestration — might mean cancellations, plant closures and lost jobs, and as such he owed his employees a warning under the law. But OMB guidance issued Friday said that although the Defense Department would probably have to abrogate or renegotiate contracts under sequestration, that wouldn’t happen all at once.
“The additional guidance offered important new information about the potential timing of DoD actions under sequestration, indicating that DoD anticipates no contract actions on or about Jan. 2, 2013, and that any action to adjust funding levels on contracts as a result of sequestration would likely not occur for several months after Jan. 2,” Allen said.
Another major defense vendor, BAE Systems, also said Monday that OMB’s notice obviated the need for layoff advisories around the end of this month.
“As it remains less than clear how and when sequestration might be implemented for individual programs, BAE Systems has determined it will not issue conditional WARN notifications to all of its employees following the guidance issued by OMB and DoD last week,” said the company’s top spokesman, Brian Roehrkasse. Still, like Lockheed, he made clear BAE still believes that option remains open.
“If specific information becomes available that certain company facilities may suffer mass layoffs due to sequestration, we will issue WARN notices at that time as required by law,” Roehrkasse told POLITICO. “Unless sequestration is avoided, we eventually may have no choice but to issue WARN notices to potentially impacted employees. When that might happen will depend on the circumstances as they develop.”
Readers' Comments (21)
Lyin' Ryan & others in Congress who voted for the sequester didn't think this through, because their voting is all about P.R. and spin, with no thought to actual consequences.
As the real-world results of that brainless sequestration stunt come into view, stand back and watch Congress scramble to weasel out of its solemn "automatic" commitment -- while trying to pretend that they didn't ask for it in the first place.
Actually if you were more informed, it has been revealed that the sequstionatration was an idea that came out of the Obama White House.
Obama bluffed and put America's national security in the pot and the GOP called his bluff.
Frankly I'm disappointed that the administration hasn't had more "public hangings," a term we used in tech firms to call out non-team behavior. The administration should be making bluntly clear some of the defense contractor waste that's built up ever since 9/11, especially with the fiascos in Iraq, Afghanistan and Pakistan. And you think that "ending the wars" has cut the budget? Of course not!
Just give the public a little refresher on the 'star wars" missile program that the Pentagon itself tried to kill (billions for something that doesn't work, never did work and never will work). Or show them just an everyday scene in the life of a defense contractor sales exec (typically retired senior officer spending lavishly on oodles of goodies for congresspersons). Or show the sheer number of dollars spent by Defense on a handful of companies for things like "logistics services" (computer systems designed to be so complex that they get a 10-year run on service contracts at $$millions/year and NO ONE can describe what benefit there is to safety & security).
The fiscal cliff is coming and these are the things that Washington will fight over - NOT the jobs impact as the article states. And the fighting will be brutal because we've allowed so many to get onto the big fat juicy end of the defense te@t.
The White House should have "playing cards" like they used in Iraq to identify the top-50 bad guys, but in this case the top-50 ripoff-artist-contractors. Hand them out to taxpayers and let us play games with them. Maybe someone will play a hand that lends us taxpayers some logic.
Excuse me Politico: This is a shameful spin on the actual truth. But why am I not surprised, since you are in Obama administrations pants, too.
The truth is that Obama directed the Labor Department to rewrite the Warn Act rules and Labor Dept sent out a notice last week directing DOD contractors NOT to issue layoff notices under sequestration in advance of the Elections. The deal was that Uncle Sam (read the American taxpayers) would foot the bill for any contractual penalties DOD contractors would have to pay -but ONLY if they followed the "Obama rewritten" Warn Act and did NOT issue layoff notices prior to the election as is currently required by LAW.
Your spin on the facts is as bad as MSNBC these days.
Everyone knows Obama and Liberals hate rich people, rich companies, and especially Defense contractors, so I am sure they are thrilled with news of Americans being laid off.
Ex-Im Bank approved a $118 million loan for Vietnam to buy a communication satellite from Lockheed, and the US Coast Guard ordered 3 Lockheed aircraft; both occurring today within a few hours after Lockheed agreed not to send out the notices. Must be a coincidence.
Politico writes: "Defense giant Lockheed Martin, which backed off Monday from an earlier threat to issue thousands of layoff warnings later this month just as voters were preparing to go to the polls, said it welcomed a notice from the Office of Management and Budget that affirmed vendors could bill Uncle Sam if “contract actions” next year meant they were forced to close plants and lay off employees."
Why did the writen claim that Lockheed backed off an earlier threat? A threat of what.... following the law? I guess the law is only followed if it helps Obama, and if Obama doesn't like the law he just ignores it.
http://thehill.com/blog...
Look at all the conservatives supporting union workers AND keynesian economics...
Funny how that works.
Is it possible to even imagine the shrieks from the corrupt media if this were a Republican administration aiding and abetting what is clearly an illegal action by encouraging numerous defense contractors to violate long standing labor law by ignoring the 60 day notice requirement of the WARN act while offering to pay any costs incurred BUT ONLY if they don't send out the notices? When a Senator, Obama wanted to increase the WARN notification period to 90 days from its current 60 days - but, of course, he didn't have any skin in the game back then.
IMHO, this rises to the level of a high crime or misdemeanor - an impeachable offense.
Interesting Politico deep sixed this article when too many savvy people called them on their duplicity.
Posted at 05:38 PM ET, 09/27/2012
TheWashingtonPost Patty Murray complains GOP senator blocked vets’ COLA increase
The chairman of the Senate Veterans’ Affairs Committee complained Thursday that an unnamed Republican senator blocked a bill last week to provide veterans with an annual cost of living adjustment, a maneuver that could delay payments for recpients.
Sen. Patty Murray (D-Wash.) brought the bill to the Senate floor Sept. 21. The bill was cleared by Senate Democrats but was held up by an unnamed Republican, according to her office. The Senate subsequently recessed without passing the bill.
After Murray issued a statement Thursday morning calling the development “stunning,” the office of Sen. Richard Burr (R-N.C.), the ranking Republican on the Senate veterans’ committee, said the issue had been resolved.
“It has cleared our side, meaning there is no hold,” David Ward, a spokesman for Burr, said Thursday afternoon.
Under Senate rules requiring unanimous consent, a single senator can block legislation by privately placing a hold on the bill.
The bill, HR 4114, was passed by the House in July and is intended to provide more than 3.9 million veterans and their survivors with a cost-of-living adjustment to disability compensation and benefits meant to offset inflation and other factors, according to Murray’s office. The bill normally passes each year without controversy.
With the Senate out of session until Nov. 13, it will have to immediatley pass the legislation to provide the increase in time for January’s disability checks, according to Murray’s office.
The Department of Veterans Affairs said Thursday afternoon that in order for VA to pay the December cost of living adjustment as scheduled on Jan. 1, Congress would have to pass the COLA by Nov. 13.
“Should Congress pass the COLA after that date, VA would have to make complex programming changes to the system that could not be accomplished in time to pay the COLA increase on January 1,” the VA said in a statement. “Consequently, the December COLA increase would have to be paid retroactively.”
Veterans’ representatives reacted angrily to Murray’s disclosure.
“It is outrageous that disabled American veterans are once again being held hostage to partisan politics,” said Bob Wallace, executive director of the Veterans of Foreign Wars of the U.S.
Failure to pass the bill could cost veterans and their families up to $500 next year, according to Paul Sullivan, director of Veterans Outreach for Bergmann & Moore, a law firm concentrating on VA disability law.
Last week, Senate Republicans blocked a bill to create a Veterans Job Corps after raising procedural objections over the program’s cost.
Of course if there are any layoffs, it will be the white males. It is virtually impossible to fire a non-Caucasian these days.
The liberal press and this administration won't tell you that layoffs have already started in most of these defense contract companies in the Washington DC area - affecting people of ALL backgrounds and walks of life - not just white people.
The one thing that all Americans can agree on - Democrat or Republican - that this administration will best be known for all the people who can break the law and get away with it while also encouraging others to go ahead and break the law.
Another blocking maneuver by this administration in order to insure votes - at the cost of the American taxpayer - so transparent.
Another blocking maneuver by this administration in order to insure votes - at the cost of the American taxpayer - so transparent.
Hey POLITICO:
Your incredulous spin on the layoff notice fiasco orchestrated by the WH is despicable.
The president is paying companies to break the law with taxpayer money...to make the Obama economy look less dead than it is.
POLITICO SUCKS BIG HARRY DONKEY BALLS.
$16 trillion of debt with no end in sight.
And $1 trillion of cuts over ten years is unreasonable?
Don't think so. Since the Federal Government can't seem to cut anything without being forced to, then let the secuesters occur.
Every family, State, municipality, private business has been forced to cut back already. It's time the Federal Government and those who live off its coffers do the same.
They "called his bluff" because they thought they could weasel out of it and as to date have not. Not sure how you figure that it put our national defence in jeopardy. Worst case scenario is we go back to a national defence instead of a national offence.
Then why under Obama is wall street at a 10 year high. I don't hate the rich, I hate the thieves.
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