Democrats press defense contractors to approve of tax hikes

A file photo of House Armed Services Committee Chairman Buck McKeon (R-CA).
A file photo of House Armed Services Committee Chairman Buck McKeon (R-CA).
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Mandatory defense cuts known as sequestration are scheduled to take effect in January. Defense companies told a Congressional panel today they’re required to send out pink slips 60 days in advance. Those layoff notices will arrive days before the November election.

It was supposed to be a discussion about the effect of sequestration on the defense industry, a hearing House Armed Services Committee Chairman Buck McKeon called probably the most important one he's ever attended. The stakes are high, especially for California, which would lose thousands of defense jobs if the automatic deficit reduction cuts take effect.

But the morning quickly turned into political finger-pointing. Chairman McKeon put the blame on the White House for not providing guidance to defense contractors. The Republican from Santa Clarita said, "I worry that the cavernous silence from the president will lead many to exit the industry or to walk away from capital investments that are in the best interest of our troops."

Democrats blamed the GOP for ruling out tax hikes, making cuts the only way to reduce the deficit. New Jersey Congressman Robert Andrews asked the four defense industry witnesses whether they’d rule out tax increases. David Hess, the president of the jet engine company Pratt and Whitney, reluctantly agreed "everything has to be on the table at this point."

The defense companies warned the lawmakers that the administrative disruption will wipe out any savings from sequestration.