Sequestration could boost unemployment, altering 2012 politics
The looming threat of sequestration is proving to extend beyond the walls of the Pentagon, making its way into the political arena as the November elections get closer.
Not only will the additional $500 billion in defense cuts have an effect on the lives of more than 1 million government contractors and manufacturers, but incumbents up for re-election in November could face defeat as voters associate the spiraling economy and the major cuts.
Sequestration cuts are set to automatically take place following the failure of the deficit-reduction super committee.
“I don’t see it cannot [have political ramifications],” said House Armed Services Committee Chairman Rep. Buck McKeon. “We’ve been 40 months above 8 percent unemployment. I would think that would have a very negative impact. The people that haven’t been focusing on it [sequestration], haven’t been thinking about it, are going to get a real wake up call.”
Defense companies such as Lockheed Martin — the world’s largest — and Northrup Grumman are preparing to hand out pink slips to employees in preparation for potential layoffs in the thousands. Under the Worker Adjustment and Retraining Notification Act (WARN), employers must notify workers of layoffs 60-90 days prior to their termination. With the potential sequestration to come through in January, workers legally have to be notified of their potential termination as early as September and as late as Nov. 2 — right before the Nov. 6 elections.
“The economy is the number one issue going in. If we see these pink slips starting to hit, and you see a lot of workers who may, they have been the people who voted Democrat before,” said Rep. Randy Forbes, Republican congressman from Virginia. “You’re going to see people start to realize this economy is in bad shape and they’re going to be mad as they can be with this administration.”
For incumbents, the sequestration may raise questions for voters who want to see changes in the economy, and Rep. Forbes predicts the issue will be brought up in congressional debates. If the people want answers from their representatives, he said, the same questions need to be posed to the presidential candidates, too.
“If they [lawmakers] wait until after the election, the opportunity to stop it gets more and more remote,” Rep. Forbes said. “You get all these pink slips that come out in October, and you don’t know if you have a job or don’t have a job.”
While the House Armed Services Committee has begun talks on the impact of the sequestration, the White House has remained fairly quiet and has threatened to veto any attempts to avoid sequestration.
President Barack Obama’s administration declined to return TheDC’s request for comment.
With Election Day less than six months away, voters in key battleground states could likely be swayed, especially if the unemployment rises as a result of the cuts, Rep. Forbes said.
But, he added, the sequestration is bigger than just defense contractors: For cities that center around military bases and defense companies, the cuts create a ripple effect throughout the community, creating an “economic tidal wave.”
In San Diego, for example, 30 percent of the economy comes from the military. The loss of defense jobs could ultimately cause the city to see mass changes in its local economy.
California, Virginia and Florida lead the pack in states that will lose the most jobs, with 148,000, 114,900 and 109,000 workers, respectively, projected to be out of work by 2014 as a result of the sequestration.
If the additional cuts do come through, the Department of Defense would be facing a total of close to $1 trillion in cuts. As a result, more than 1.01 million jobs would be lost by workers in the defense industry, including 130,000 manufacturing jobs — a loss that would bring the unemployment rate up to 10 percent — McKeon said.
“Right now I am very concerned,” Rep. Forbes said. “There’s nothing that I’ve seen that is putting the machinery in place that I think will effectively stop it. It is so horrendous that I’m hoping that even in Washington, common sense will take place.”
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