Facing the Fiscal Cliff
By PHILIP L. DUNMIRE, Navy League National President
While Republican and Demo- cratic Party leaders rallied
the faithful at their respective
national conventions in Tampa,
Fla., and Charlotte, N.C., the nation
they so desperately want to represent continued its slide toward the
edge of a fiscal cliff called sequestration, a cliff these leaders created by
their failure to act.
And as they take their campaigns
on the road in the run-up to Election Day with the promise of “jobs,
jobs, jobs,” companies across this
nation that do business with the federal government — from mom-and-pop shops to multibillion-dollar corporations — must take steps now to deal with federal
funding cuts that will take effect Jan. 2 if lawmakers fail
to do something to delay or stop our tumble over the
edge. Those steps will include layoffs in a fragile economy and the possible permanent loss of critical industrial
capabilities and expertise.
This is not a Republican problem. It is not a Democratic problem. This is a national crisis. Nothing could
undermine national security and economic prosperity
more than sequestration. In fact, programs related to
national defense and homeland security will absorb 50
percent of the sequestration cuts despite being just 19
percent of the federal spending budget.
The Budget Control Act of 2011 called for more
than $900 billion in cuts to discretionary spending
over the next decade. The Doomsday scenario that is
sequestration was triggered when the bipartisan Joint
Select Committee on Deficit Reduction — the so-called Super Committee — failed to agree on a deficit-reduction plan, meaning an additional $1.2 trillion in
across-the-board cuts to discretionary spending over
that same decade.
For the defense and security sector, this means $487
billion in cuts already mandated by the Budget Control
Act and nearly $500 billion more over the next decade
should sequestration occur.
Jan. 2 may seem a long way off, but the federal
Workers Adjustment and Retraining Notification
(WARN) Act mandates that companies notify their
employees 60 days in advance of
plant closings or mass layoffs —
meaning pink slips on Nov. 2.