Class Warfare: Sequestration Edition

Obama official blames GOP, wealthy for massive looming defense cuts

Jeffrey Zients / AP
August 1, 2012

The Obama administration’s senior budget official blamed nearly $500 billion in looming mandatory defense cuts on "Republican refusal to have the top two percent pay their fair share," a political jab that many members of the House Armed Services Committee (HASC) deemed offensive.

Jeffrey Zients, the Office of Management and Budget’s acting director, surprised lawmakers by engaging in a partisan attack after Republican members of HASC demanded to know exactly how the Obama administration plans to stave off nearly $500 billion in mandatory defense cuts known as sequestration.

The cuts are scheduled to kick in on January 2, barring a last minute budget compromise in Congress.

"What is holding us up right now is the Republican refusal to have the top two percent [of earners] pay their fair share," Zients said in response to a question from Rep. Randy Forbes (R., Va.).

"The root cause problem here is the Republican refusal to ask the top two percent to pay their fair share," he reiterated, much to the surprise of several committee members who slammed Zients for turning a practical hearing aimed at preventing catastrophic defense cuts into a partisan blame game.

Zients’ partisan remarks appeared to shock Rep. Mike Turner (R., Ohio), who chastised the Obama administration for showing a lack of seriousness about a series of cuts that will shrink America’s military and imperil the country’s national security.

"We’re not usually in the habit of hearing such partisan comments in what is really a bipartisan committee," Turner said. "We don’t usually hear people throw around ‘Republican’ and ‘Democrat,’ but you have, very, very well. I want to commend you on your broken record of partisanship."

"Zients’ comments are pretty brazen in light of the $800 billion in wasted taxpayer dollars that was supposed to (but didn’t) stimulate the economy and which were, in effect, paid for by $800 billion in defense cuts," said Gary Schmitt, resident scholar at the American Enterprise Institute. "And is he really suggesting the country’s national security be put at risk because the administration want to raise taxes (on more than the top 2 percent) in order to save PBS, Amtrak, and the Education Department?"

While Congress is responsible for finding nearly $1.2 trillion in budget cuts in order to avoid the sequester, lawmakers chastised Zients and the Obama administration for failing to push Congressional Democrats into a reasonable bargaining position.

"The president has the full responsibility for sequestration, having endorsed it and then signed it himself," Turner said. "You have no plan."

"It is stunning that the White House is willing to hold our men and women in uniform hostage to their desire to raise taxes," said Jamie Fly, executive director of the Foreign Policy Initiative. "Congressional Republicans have laid out a specific plan for fixing current law to avoid this impending nightmare scenario. The White House has not offered any specific proposals and seems only interested in playing politics with America’s national security."

Lawmakers also challenged Zients on a recent Department of Labor (DOL) memo that may have instructed defense contractors to break a law known as the Worker Adjustment and Retraining Notification (WARN) Act.

The Monday memo suggested government contractors delay issuing more than 10,000 pink slips to employees, a move that could leave them vulnerable to expensive labor lawsuits under the WARN Act. That law requires companies to notify their employees at least 60 days in advance (or 90 days in some states) that their jobs may be cut during periods of mass layoffs.

DOL maintains that the act is not applicable because sequestration is not a certainty—a viewpoint that led critics to accuse the administration of election year posturing.

Rep. Howard "Buck" McKeon, HASC’s chairman, recounted the worries of leading defense industry officials, most of whom do not want to leave their companies vulnerable to costly lawsuits.

"This is the law of the land and we have an obligation to" ignore the administration’s advice and follow the law, McKeon recounted the industry leaders as saying.

"They all believe that layoffs are reasonably foreseeable and the WARN Act applies, so why do you disagree with them?" McKeon asked Zients.

"Clearly, the companies you just talked about need to absorb this guidance from the DOL, which is very clear," Zients said, failing to acknowledge industry concerns.

Rep. Turner also chastised DOL’s advisory on the WARN Act.

"The statement by the DOL that people need not give WARN notices has no effect," he said. "It’s not worth the paper it’s printed on. It might be the desire of the administration" to avoid massive layoffs in the run-up to the election, "but it’s a fiction."

Zients went on to explain that if the sequester becomes reality the administration will be prepared to carry out painful defense cuts.

"We will be ready at DOD and across the government if unfortunately Congress doesn’t do its job," he said. "There is more than enough time for us to be ready for the unfortunate possibility of January 2 coming to be. We will be ready."

Others in attendance at the hearing avoided the partisan skirmish by focusing on the potentially disastrous result of the looming sequester.

Military families and veterans, for instance, would see their medical benefits slashed in certain instances, according to Deputy Secretary of Defense Ashton Carter, who testified beside Zients.

"We could be forced to cut back on base support services, facility maintenance, and maintenance of government owned family housing," Carter said. "Commissary hours might have to be reduced [and] funds for the Defense Health Program, which provides health care for retirees and military dependents, would be sequestered, resulting in delays in payments to service providers and, potentially, some denial of service."

Massive cuts would additionally scale back the military to what Carter and others have described as unsafe levels.

In a worst case scenario, sequestration would shrink the U.S. Army from 560,000 troops to fewer than 490,000; the Marines from 202,000 to fewer than 182,000; the Navy from 325,000 to fewer than 322,000; and the Air Force from 333,000 to fewer than 330,000, according to statistics provided by the Reserve Officers Association (ROA).