Mandated trims will cost jobs

eral contracts and legal responsibilities due laidoff workers.

Half of the budget cuts would hit the Pentagon; the other half would affect social service and education programs nationwide.

Congressional Democrats and Republicans, who haven’t reached a deal to keep the cuts from kicking in Jan. 2, agree that they couldn’t come at a worse time, with the economy sputtering and unemployment again rising in metro Atlanta.

“It doesn’t take a rocket scientist to figure out that if you have a decrease in investment in the military industrial complex, or in ... highways, roads, bridges and things like that, it’s going to have a corresponding depressant on the recovery, which is already on its knees,” said U.S. Sen. Johnny Isakson, R-Ga.

Layoff notices could start coming days before the Nov. 6 election. With the prospect of thousands of Americans losing jobs, “More and more members are realizing that we’ve got to figure out a way forward,” Sen. Saxby Chambliss, R-Ga., said.

“I agree, to a certain extent, that there’s politicking going on,” and the cuts might yet be eased or averted, “but I’ve seen quite a few cutbacks lately with clients getting their funding turned off,” said Kelly McBride, president of Global Defense Consulting in Roswell, which provides accounting and other services to small businesses that contract with government agencies. “Cuts of this magnitude could be absolutely devastating to these small businesses.”

McBride, who employs 25 full-time and contractual workers, has frozen hiring until a budget deal is worked out. Her clients who contract with Defense, Energy, Homeland Security and other federal agencies are unsure if business-services contracts will be funded next year.

A year ago, Congress agreed to raise the federal borrowing limit in exchange for $900 billion in cuts to agency budgets, plus another $1.2 trillion in savings between 2012 and 2021. But a 12-member “supercommittee” charged with finding the $1.2 trillion in reductions failed, triggering the automatic cuts.

The idea was to force lawmakers to make hard decisions to reduce future deficits, a goal both parties embrace. Officials including Education Secretary Arne Duncan and Defense Secretary Leon Panetta have urged some alternative deficit-reduction plan. Republicans, basically, want to restore defense funding by cutting domestic programs. Democrats, largely, propose using new tax revenue to close some of the gap.

“We never really looked at sequestration” — Washington’s term for the automatic cuts — “in terms of the consequences, the unintended consequences of what it was going to do,” said Rep. David Scott, D-Atlanta. “We merely looked at it as some kind of a way to get an agreement.”

“We understand the need to address our nation’s fiscal challenges and we are very much doing our part,” Bob Stevens, the CEO of Lockheed Martin, said last month.

The airplane manufacturer could lose hundreds of millions of dollars in government business if the cuts go through.

Stevens warned Lockheed Martin’s 120,000 employees in a July 18 letter that 10,000 jobs are in jeopardy if Congress doesn’t rework the budget deal. More than 7,500 people build C-130 transport planes and F-35 jet fighters at Lockheed’s plant in Cobb County.

A George Mason University study published July 17, commissioned by the Aerospace Industries Association, said the cuts could cost 2.14 million jobs and return the economy to recession.

Defense cuts could reach $57 billion the next two fiscal years; domestic programs would be cut by $59 billion.

Georgia would suffer the 10th worst employment impact, the report states, with 27,609 defense-related jobs and 26,903 non-defense jobs in jeopardy.

On Wednesday, Sen. Tom Harkin, D-Iowa, detailed possible effects of the cuts: a 7.8 percent across-the-board cut to education programs, 1.6 million fewer adults receiving job training and nearly 660,000 Americans going untested for HIV.

Isakson spent much of Tuesday morning in meetings with constituents who could be affected, including Dr. Thomas Frieden, who runs the Atlanta-based Centers for Disease Control and Prevention.

The CDC faces the potential loss of $500 million to its budget.

“The cascading consequences of a sequester would make all Americans less safe, increase preventable illness and increase health care costs,” CDC spokesman Tom Skinner wrote in an email. “Virtually every state and community in the United States would be at higher risk from natural or terrorist threats.”

Dan Beale, an employment attorney with McKenna Long & Aldridge in Atlanta, has alerted clients about their legal responsibilities if the cuts come through and jobs disappear. Large-scale layoffs require employers to notify the Labor Department 60 days prior to the firings.

“This could impact companies large and small,” Beale said. “There are a lot of small contractors in Georgia and around the country that sell things directly to the Defense Department and other agencies, so a variety of companies could be impacted, not just large ones.”

A government contract, for example, may last five years, prompting a business to plan and hire for that entire span. The government, though, typically only pays on a year-by-year basis, leaving contractors this year more uncertain than ever whether contracts will be honored.

“It’s the unknown that’s unsettling,” said Global Defense’s McBride. “As a small business, you have this delicate balance between keeping highly skilled workers or letting them go. What happens when the government comes back to [fulfill] the contract and you don’t have the resources? Businesses really can’t get a straight answer as to what is coming next.”