McCain joins GOP vow to block layoff payments to defense firms

Sen. John McCain (R-Ariz.) is joining the ranks of
Republicans vowing to block payments to defense contractors from the Obama
administration for the severance costs associated with any layoffs due to
sequestration.

McCain said in a letter Wednesday to Defense Secretary Leon
Panetta that he would try to deny payments from the administration to defense
contractors for the costs of layoffs, and requested the Pentagon provide 30
days’ notice to Congress if any payments are being made.

The senator jumped on board with his close ally Sen. Lindsey
Graham (R-S.C.), who said Monday he also would block any payments.

Graham’s vow, first reported by The
Hill, was the beginning of a barrage of Republican attacks on the Obama
administration’s budget guidance for issuing mass layoff notices, which
prompted Lockheed Martin and other defense contractors to say they would not
send the notices this year.

{mosads}The Office of Management and Budget on Friday said it would
cover the costs associated with any layoffs that take place due to sequestration under a law
requiring 60 days’ notice of mass layoffs, but only if companies did not send
out the mass notices this year.

“Companies have a choice whether to rely on OMB’s
politically-motivated guidance or to comply with the law,” McCain said in a
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.”

The issue of sending layoff notices under the Worker
Adjustment and Retraining Notification (WARN) Act has taken a sharp political
turn this year, after Lockheed’s CEO Bob Stevens threatened to send notices to
all of his employees because of the uncertainty surrounding the
looming across-the-board sequestration cuts, which would reduce Pentagon budgets $500
billion over the next decade.

Stevens noted that the company would have sent the notices
four days before the election, because the WARN Act requires 60 days’ notice and
sequestration is set to take effect Jan. 2.

The Obama administration said in July that issuing the
layoff notices due to sequestration was “inappropriate,” but Republicans
encouraged the companies to do so, accusing the administration of trying to
hide job losses ahead of the election.

Friday’s guidance from the Office of Management and Budget
sparked a whole new round of attacks from Republicans, who have accused the OMB
notice of seeking to help Obama politically.

Sen. James Inhofe (R-Okla.) said Tuesday that the Obama
administration was “bribing” defense companies not to send the notices, while
Sens. Chuck Grassley (R-Iowa) and Kelly Ayotte (R-N.H.) sent a letter to OMB
demanding legal justification for the payouts.

Not all Republicans are on board with plans to block the
WARN payments. House Armed Services Committee Chairman Buck McKeon (R-Calif.) told The
Hill on Monday that he wasn’t planning to work on blocking payments just yet, as
he wanted to focus first on stopping sequestration before it takes effect. Congress is reportedly working on a deficit-reduction deal that would avert the spending reductions.

The Obama administration has defended the OMB guidance, and
White House press secretary Jay Carney said the White House “absolutely” did
not pressure Lockheed to drop its threat of sending the notices.

Administration officials point to guidance issued by the Pentagon
Friday that says DOD does not expect any contract cancellations on Jan. 2, the
rationale for having to send the notices before sequestration takes effect.