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Coats Statement on Obama Administration Guidance on Sequestration Layoff Notices

Press Release

Location: Washington, DC

Senator Dan Coats (R-Ind.) issued the following statement on the Obama administration's recent guidance instructing defense companies and government contractors not to issue mass layoff notices to their employees, as is required by law under the WARN Act, even though $109 billion in across-the-board budget cuts will occur under sequestration on January 2, 2013:

"It is outrageous that the Obama administration is encouraging companies to disregard the law requiring businesses to warn employees of potential layoffs due to the looming budget cuts and then promising taxpayer dollars to cover liability costs," said Coats. "With November around the corner, this is a blatant political attempt to keep Americans in the dark when it comes to our budget and fiscal crisis."

"The administration cannot pick and choose which laws to follow for political purposes," added Coats. "Current law requires companies to notify employees of layoffs from government contracting work so families can prepare. The Budget Control Act, signed into law by the president, includes $109 billion in across-the-board budget cuts that could eliminate several hundred thousand defense jobs. While I did not support this legislation, it is the law of the land and the president should try to work with Congress to correct it rather than hide its real impact from the American people."

The WARN Act requires companies to provide at least 60 days' notice of layoffs from government contracting work. On Friday, the Office of Management and Budget advised the defense industry and other government contractors that they do not have to notify workers of the potential layoffs even though the $109 billion across-the-board budget cuts will occur on January 2, 2013 and could result in as many as one million lost defense jobs.

According to the defense industry an estimated 13,273 private sector jobs in Indiana are at risk from projected Department of Defense spending reductions. Indiana had $4.37 billion in defense related contracts in 2010, and $3.66 billion in 2011. Estimates show that Indiana defense contractor revenue losses could be greater than $659 million annually under the sequestration.

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