Defense industry executives join the House Armed Services Committee Wednesday for a hearing to examine the implications of sequestration and its potential effects on the national defense industry.
Pentagon officials have sounded the alarm on the impact of $500 billion in automatic budget cuts over a decade set to begin Jan. 2013. The cuts, referred to as sequestration, are the result of Congress being unable to agree on deficit reduction measures, and are on top of $487 billion in defense cuts already planned over the next 10 years.
In June, Defense Department Director Leon Panetta told reporters that top Pentagon officials are working with defense industry CEOs to tell Congress it must take immediate action to avoid automatic budget cuts.
At Wednesday's hearing, defense industry executives discussed issues involving the Worker Adjustment and Retraining Notification Act, which requires advance notification of layoffs, the effect of the cuts on the economy and other federal agencies and the need for clarity to allow contractors to plan.
The defense industry executives also noted that they have seen a change in recruitment of new employees since the bill passed, with fewer resumes coming in, and that they have refrained from additional hiring recently knowing that they may be forced to lay people off in the first quarter of 2013.
All of the executives noted that, regardless of the rhetoric in Washington about cancelling the sequestration, they had a responsibility to treat it as law until actions were taken to change it.
Participants include Lockheed Chairman and CEO Robert Stevens and his EADS counterpart Sean O'Keefe. Top defense contractor officials from Pratt and Whitney and Williams-Pyro will also testify.