-Due to WARN, defense companies will need to give layoff notices to employees about 60 days prior (and in some cases 90 days prior) to employment termination.

-The first of the cuts to the defense sector is set to take place in January 2013. Thousands of people are going to get 'let go' nationwide. Some estimates are far above 100,000... including the main defense companies, as well as smaller companies that act as subcontractors to the main defense companies.

-60 days prior to January, when the layoff notices will go out, is right before the November elections.

Discuss.

7/15/2012 7:40:28 PM

- Unless the defense industry has created 100,000 jobs in the past few years, the number of job cuts is grossly overestimated.

- Social programs will be cut to make up that money anyways.

7/15/2012 7:48:10 PM

I'm curious if you really think your industry is at the "right level" or not

Is the government buying too much or too little of your company's products? Are they paying too much or too little for what they do get?

[Edited on July 15, 2012 at 7:54 PM. Reason : .]

7/15/2012 7:54:11 PM

Quote :

"- Unless the defense industry has created 100,000 jobs in the past few years, the number of job cuts is grossly overestimated. "

I don't really understand the logic behind this statement at all. Please explain.


This thread wasn't really intended to be about whether the sequestration is the right or wrong thing to do. If it ends up there, so be it. But it really was intended to be a discussion of the effects of giving thousands of people possibly termination letters immediately prior to elections... elections where one of the main talking points was how to best create jobs.

Quote :

"I'm curious if you really think your industry is at the "right level" or not Is the government buying too much or too little of your company's products? Are they paying too much or too little for what they do get? "

Way too broad of a question to give any sort of a meaningful answer.

"Right level" for what?

What products?

7/15/2012 8:02:42 PM

Are you worried about losing your job? No offense intended, I'm just wondering.

7/15/2012 8:46:06 PM

Quote :

"I don't really understand the logic behind this statement at all. Please explain."

Even with the cuts, defense spending will still be at 2007 levels.

Quote :

"elections where one of the main talking points was how to best create jobs."

Is expanding the defense industry really how we want to create jobs?

7/15/2012 8:50:32 PM

^^ Difficult question to answer. I suppose I'm concerned over my job in the way that any working person is.

However, how the sequestration will be implemented is still so ill-defined, it's hard to say what will happen. In addition, I have a separate funding source that theoretically wouldn't be effected by sequestration.
There's always a possibility though - I do work for a company that will be effected by this.

^ Ahh, yes, I see what you're saying. I do think that perhaps you're 'fat fingering' the term defense spending. I was under the impression that procurement has been shrinking budget-wise and losing jobs for several years now.

[Edited on July 15, 2012 at 9:04 PM. Reason : s]

7/15/2012 8:56:33 PM

Quote :

"I do think that perhaps you're 'fat fingering' the term defense spending."

Per the CBO:

Quote :

"The FYDP describes the department’s “base” budgetary plan—for its normal activities, such as manning, training, and equipping the military—and excludes overseas contingency operations, such as the war in Afghanistan and other nonroutine military activities elsewhere. Accordingly, CBO focused its analysis on DoD’s base-budget costs and produced two projections."

Quote :

"For 2013, CBO’s projection of the cost of DoD’s plans is $14 billion higher than the funding that would be available under the BCA’s limits on discretionary appropriations for national defense before the BCA’s automatic reductions. Those costs would be $66 billion higher than the funding that would be available after the automatic reductions. Accommodating those reductions, in particular, could be difficult for the department to manage because it would have to be done over only nine months. Even with that cut, however, DoD’s base budget in 2013 would still be larger than it was in 2006 (in 2013 dollars) and larger than the average base budget during the 1980s."

http://www.cbo.gov/publication/43428

7/15/2012 9:20:29 PM

...correct.

I guess I'm just missing the connection. I don't see how you could gauge a staffing level of the defense industry from that in order to say:

Quote :

"Unless the defense industry has created 100,000 jobs in the past few years, the number of job cuts is grossly overestimated."

We're talking about a 10% cut from private sector firms across the board within the first year. At the one extreme of the largest firm, that roughly equates to ~12,000 jobs. I mean... no private company is going to keep employees around if they aren't working. I don't think it's such a gross overestimation to say industry wide (including subcontractors), that number could grow over 100K.

[Edited on July 15, 2012 at 9:45 PM. Reason : maybe if there were a pie chart or something.]

7/15/2012 9:33:45 PM

I would think all the incumbents that decided to stone wall any type of compromise and let the cuts go will be out in any defense heavy areas (Va). But that is if people believe the incumbents did stone wall compromise causing the cuts or if they believe whatever some campaign ad tells them..

7/15/2012 10:24:51 PM

^ aha, it would appear as if political dick-trickery is already afoot in attempts to get around WARN... and somehow postpone letting pink-slips go out until after elections.

http://www.washingtonpost.com/blogs/election-2012/post/governors-may-push-for-delay-of-defense-layoff-notices-until-after-election/2012/07/15/gJQAi4bamW_blog.html?tid=pm_pop

7/15/2012 10:40:04 PM

Quote :

"- Social programs will be cut to make up that money anyways."

Isn't this part of the problem with Sequestration though? Defense cuts are only half of sequestration: an equal portion is being taken out of non-defense discretionary spending. So while defense contractors will be hurt, just about everything else is going to be decimated.

Regarding the defense cuts, I think the real problem is less about the size of the cuts and more how the cuts are being made (which is fueling the confusion). Normally, when you make these sorts of cuts, you would orderly wind down contracts by letting them expire without renewal, not execute options, etc. While it may not provide an immediate drop in the first year, it does provide the agreed level of cuts over a five year window (which is roughly how the Pentagon plans).

The problem with sequestration is that it calls for an immediate cut without giving the Pentagon or industry time to prepare for it and will likely create complete chaos as the government would essentially be forced to underfund existing contracts, breaking them and thus being subject to penalties for early termination/termination of convenience. This is problematic especially for fixed price contacts. It's the equivalent of saying, "I want to reduce spending so I'm just going to stop paying bills." The Pentagon naively believed Congress would do it's job and come up with a budget for them to work within before sequestration hit. However, since Congress has failed to do so within a reasonable time window, they're now trapped.

7/17/2012 3:53:00 PM

Quote :

"I think the real problem is less about the size of the cuts and more how the cuts are being made"

I hate to quote a single part line out of your post, but I feel this needs emphasis. Agreed... moreso, I don't think this sequestration was ever intended to be so much of a spending reduction plan as it was supposed to be a political tool used to force congress to come up with a better plan.

Congress failed. This blunt force tool is the result.

Quote :

"The problem with sequestration is that it calls for an immediate cut without giving the Pentagon or industry time to prepare for it and will likely create complete chaos as the government would essentially be forced to underfund existing contracts, breaking them and thus being subject to penalties for early termination/termination of convenience."

Yes. These early termination penalties are nothing to sneeze at either. Sometimes, they are even so steep, it would have been cheaper to just follow through with the original contract (excluding logistics and long term maintenance).

7/17/2012 4:38:08 PM

Quote :

"Social programs will be cut to make up that money anyways."

Just as a reminder that this is not a defense only cut, $492B worth of discretionary non-defense cuts are also going to hit the budget with equal if not potentially greater impact than just the defense cuts. To give you an idea of what this includes:

- Air Traffic Controllers
- Food Safety Inspections
- Education spending (early education, K-12 grants)
- All government funded civilian research
- Transportation infrastructure
- Grants to the arts
- FBI, Border Patrol and other Federal law enforcement
- Pretty much everything else that isn't Defense, Social Security and Medicaid

Like in defense, these cuts are going to be indiscriminately peanut buttered across departments, giving little room to prioritize given how sloppy the law was written. We're approaching a Congressionally created cluster while both sides in Congress plays politics.

7/26/2012 9:29:01 AM

^ Sequestration isn't here yet, and Congress is certainly trying:

From May:

http://www.nytimes.com/2012/05/08/us/house-bill-offers-aid-cuts-to-save-military-spending.html?_r=2&ref=federalbudgetus

Now they're sending in the big guns:

http://www.politico.com/news/stories/0712/78569.html

Republican's are ramping up the 'Budget Control Act is all Obama's fault' rhetoric.

7/28/2012 4:28:14 PM

I don't doubt Congress is trying, but they can't seem to break through the logjam. The last I heard, they're still locked horns on revenue with Republicans taking the no new revenues stance, and Democrats refusing to give ground without any new form of revenue. There's also a strong faction that refuses to allow any easement on defense cuts without some help on the non-defense discretionary spending as well. Some cynics are even calling for the country to go off the fiscal cliff as it would guarantee both the reductions in budget spending and expiration of the Bush tax cuts.

I think both sides have motivations to fix the problem, they'll hang together if they don't fix it, but they're also locked into ideological positions that aren't easy to break with this close to the election.

7/30/2012 5:36:07 PM

Quote :

"-60 days prior to January, when the layoff notices will go out, is right before the November elections. Discuss."

January has 31 days in it.

[Edited on July 30, 2012 at 5:47 PM. Reason : .]

7/30/2012 5:47:43 PM

Sequestration goes into effect January 2, 2013. Nothing like a layoff notice thanks to Congressional action right before election day.

7/30/2012 6:24:58 PM

This is what you call "sharing the pain", the defense department shouldnt be immune to cuts....all this gloom and doom talk...it will be just fine.

8/11/2012 1:08:19 AM

What exactly makes you think the DoD hasn't been "sharing the pain"? What exactly makes you think the DoD has enjoyed immunity from budget cuts?

8/11/2012 1:50:59 AM

Looking at percentages of budgets cut, roddy is absolutely correct. The defense budget is almost never on the table for large cuts, especially before the last 18-month period.

8/11/2012 3:14:59 PM

I'm a little confused as to why you would want to exclude the past 18 months in terms of defense cuts. That encompasses much of the recovery from the recession in which "sharing the pain" would be necessary. There was a significant cut prior to the sequestration, and the DoD is routinely put on the table for cuts both by both sides of the aisle.

I'm also a little confused about what you mean about "percentages of budgets cut". I can think of a handful of things that could mean... please explain, if you wouldn't mind.

8/11/2012 5:54:35 PM

Whatever, it needs to be cut more.

8/11/2012 10:45:23 PM

I'd like to cut the defense budget about in half.

8/11/2012 11:08:16 PM

What?! Then we will only spend what the entire world combined spends on defense!!! That is completely unacceptable!

[Edited on August 11, 2012 at 11:36 PM. Reason : Sarcasm on the Internet.]

8/11/2012 11:34:33 PM

yep.

i think im pretty conservative compared to most on this board, and even i think defense is long overdue for major cuts.

thats not the only thing of course, but it could be a huge source. the size of our standing army is ludicrous and so is our number of bases worldwide.

maybe isolationism is naive, but im a proponent. we should capitalize on our technological superiority and end this post-HS grunt welfare program we're running.

i dont give a shit if it was the only chance some of these fuckups had! (you know the ones i mean; we all went to school with them).

i might add that the soldiers who enlist for all the right reasons have my utmost respect.

8/12/2012 12:01:09 AM

Quote :

"I'm a little confused as to why you would want to exclude the past 18 months in terms of defense cuts. That encompasses much of the recovery from the recession in which "sharing the pain" would be necessary. There was a significant cut prior to the sequestration, and the DoD is routinely put on the table for cuts both by both sides of the aisle. I'm also a little confused about what you mean about "percentages of budgets cut". I can think of a handful of things that could mean... please explain, if you wouldn't mind."

Because prior to the last 18 month period or so, defense was never on the table for budget cuts. Even if defense does get cut, it probably won't be by more than 0-5%, which is vastly lower than just about every other government program. I understand that's a large number in actual dollars, but budgets work on percentages of growth year over year. Most of the reason defense is even being discussed is because Congress is full of fucktards and they missed their deadline to find cuts in other places.

I understand that defense is a HUGE portion of our economy, but it's about time it was put under the microscope.

8/12/2012 1:32:07 AM

There are two separate issues here: the level of funding for the defense budget and how it is cut.

I am a firm believer that the defense budget should be cut. There really is no reason that it should be up at the levels it currently is at. I think at very least we can go back to a pre-9/11 level adjusted for increased costs in personnel (salaries, health care, etc.) and inflation.

However, that doesn't mean sequestration is a good thing either. The law is so poorly written, it doesn't give the DoD flexibility to cut their budget in a way that makes sense. So instead of being able to say, cut a wasteful program like JSF or LCS, they just shave a fixed percentage off each budget line, even if it's a useful program or the government has a signed fixed price contractual obligation to pay. It's the difference between adjusting your budget to live in your means or to stop paying your loans.

And again, the DoD cuts will be bad, but the Sequestration cuts to non-Defense discretionary spending will be devastating.

8/12/2012 9:04:02 PM

Maybe they should have passed a fucking budget if they wanted smarter cutting

8/12/2012 11:33:58 PM

Completely agree, but that doesn't change the fact that this is bad policy.

8/12/2012 11:46:13 PM

8/13/2012 11:12:41 AM

Quote :

"maybe isolationism is naive, but im a proponent."

Don't worry, you're not. Believe it or not, there are gray areas between isolationism and world-empire-ism

8/13/2012 11:15:33 AM

good thread, i might come back here and say stuff later.

8/13/2012 11:56:49 AM

I for one am stoked about the possibility of massive across the board budget cuts. Of course, this will never happen, but it would be great if it did.

8/13/2012 1:51:13 PM

Yeah me too, much in the same way I'm happy for my grandma every time they cut off one of her limbs because of diabetes.

8/13/2012 3:34:14 PM

I mean.... I don't think that anyone can honestly look at the defense budget and say the it doesn't need to be cut. I'm not really sure why there are people in this thread arguing as if someone said otherwise. Hell, I've spent enough time on Air Force bases and seen first hand tons of people sitting around getting paid to do jack shit. There's definitely room for belt tightening.

Quote :

"thats not the only thing of course, but it could be a huge source. the size of our standing army is ludicrous and so is our number of bases worldwide."

Cutting down on active bases, and the number of standing troops would be a start. Establishing better guidelines and oversight for acquisitions, better training, less ground and more cyber warfare, reducing the United States role and responsibility in world conflicts/The U.N., etc... would also be great ways to responsibly get a handle on the defense budget. Sequestration, however, is not a responsible way to deal with the budget concerns in both defense and non-defense programs in my opinion.

Quote :

"Because prior to the last 18 month period or so, defense was never on the table for budget cuts."

Look, man. That is not an accurate statement.

Quote :

"Even if defense does get cut, it probably won't be by more than 0-5%, which is vastly lower than just about every other government program. I understand that's a large number in actual dollars, but budgets work on percentages of growth year over year. Most of the reason defense is even being discussed is because Congress is full of fucktards and they missed their deadline to find cuts in other places."

And this is in no way an indication that the DoD has not "shared any pain" thus far. It would appear that you're comparing the defense budget to other government "programs", which is about as an apples to oranges comparison as you can get. I do, however, think I see what point you're trying to drive home. I would say, however, that even a 0-5% cut from a budget that encompasses roughly 20% of the total U.S. spending is fairly significant.


But as RedGuard noted, the budget is somewhat of a different issue than sequestration. Sequestration was never meant to be a 'good way' of cutting the budget. It was never meant to even reduce the budget in any fair and balanced way. It was meant to be a deterrent forcing those in congress to find a better solution. I don't think it's really a question of 'IF' the budgets will be cut... it's a matter of 'HOW'.

On a separate note, I find it a bit disturbing the lack of detail on sequestration that has been put forth. Even when prodded about guidance on how this will be implemented, what is exempt, etc... the White House has basically said "Don't worry about that. Congress needs to focus on avoiding sequestration instead. In fact, don't worry about obeying the law in terms of WARN".

8/13/2012 6:28:29 PM

Quote :

"I would say, however, that even a 0-5% cut from a budget that encompasses roughly 20% of the total U.S. spending is fairly significant."

But a 5% increase would be just business-as-usual?

8/13/2012 9:00:58 PM

Historically, it certainly wouldn't be uncommon.

8/13/2012 9:04:50 PM

Quote :

""I would say, however, that even a 0-5% cut from a budget that encompasses roughly 20% of the total U.S. spending is fairly significant.""

The worst part is that with US spending being almost 25% of GDP, a large enough cut could throw us back into a recession.


[Edited on August 14, 2012 at 9:51 AM. Reason : .]

8/14/2012 9:50:28 AM

http://www.defensenews.com/article/20120907/DEFREG02/309070003/White-House-Misses-Deadline-Sequestration-Report?odyssey=tab|topnews|text|FRONTPAGE

Looks like the White House has missed it's promised deadline for delivering, to congress, a more detailed plan of how sequestration would be implemented.

9/7/2012 3:38:10 PM

I guess I'm the only one still interested in this, but whatever.

So in the latest installment of this shitshow, defense companies announced they will NOT send out layoff notices in regards to sequestration, citing guidance from the government.

Most interestingly though, the Obama administration has basically said to these defense companies "ok ok ok, lololol, so... break the law and DON'T send out layoff notices as mandated by WARN. If there are any legal problems that arise from this; we will cover it for you"

So how many millions is THAT going to cost, in addition to fees associated with breaking contracts for these defense and civilian programs?

http://www.defensenews.com/article/20121002/DEFREG02/310020004/Senators-Accuse-Obama-8216-Bribing-8217-Defense-Firms?


BONKERS!

[Edited on October 2, 2012 at 9:18 PM. Reason : MOAR]

10/2/2012 9:16:57 PM

Almost
http://www.whitehouse.gov/sites/default/files/omb/memoranda/2012/m-12-19.pdf

Basically it says, back in January the DOL decided that a notice in accordance to WARN wasn't necessary sequestration may not happen. Then it says that if a court mandates fines due to following the DOL's guidance, the contracting agency will cover the cost so long as they are reasonable and allocable and in line with FAR.

So it's not exactly a blank check

10/2/2012 9:50:43 PM

Sounds like the administration succeeded in convincing contractors not to raise a stink about this until after the election in return for covering legal costs should litigation arise to me - I don't think I would call it a bribe, but it smells like hot garbage from a mile away.

10/2/2012 10:16:34 PM

Hope they don't make a deal on this

10/3/2012 12:03:02 AM

Different take on the guidance.

Quote :

"“Companies have a choice whether to rely on OMB’s politically-motivated guidance or to comply with the law,” McCain said in an e-mailed statement. “But I can assure them that I will do everything in my power to ensure that taxpayer dollars are not used to compensate contractors who do not comply with the law.” "

http://www.bloomberg.com/news/2012-10-03/mccain-threatens-to-block-contractor-payments-from-pentagon.html

10/3/2012 5:49:21 PM

OMB didn't say ignore the law

DOL said its inline with law not to post since no one knows that there will be sequestration

10/3/2012 7:03:49 PM

One of the first semi-detailed projections of programs to be affected. This helps to paint a better picture of both defense and non-defense programs, in my opinion.


http://democrats.appropriations.house.gov/index.php?option=com_content&view=article&id=1037:dear-colleague-consequences-of-sequestration&catid=247:press-releases&Itemid=4

10/9/2012 5:29:32 PM