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Warner: Sequestration Worse Than You Imagine

Virginia Senators Warner and Kaine warn about sequestration's effects on the economy and national security.

If sequestration goes into effect in March, it will be "worse than you can imagine," Virginia Sen. Mark Warner (D) told a group of mostly government contractors a Northern Virginia breakfast meeting Friday organized by the Northern Virginia Technology Council.

Warner, along with junior Sen. Tim Kaine (D), spoke in Reston about the short-term and long-term impact of the potential $1 trillion federal budget cuts happen March 1 if Congress doesn't reach a compromise.

Half of that would affect the defense industry, which some estimates say could cost Virginia more than 207,000 jobs.

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Sequestration could have a large impact in Reston, where hundreds of firms depend on government contracting, and thousands of workers are employed by various agencies and companies that could be affected.

The senators, along with Virginia Reps. Gerry Connolly and Jim Moran, have been making the rounds in the Northern Virginia business community the last several weeks to discuss how to prepare - and also what the legislators can do to avoid - sequestration.

Both Virginia senators are on the Senate Budget Committee.

"It's a perfect storm of both sequestration, combined with the end of the CR [Continuing Resolution] and how those two intersect," Warner said. "Thinking about managing the largest enterprise in the world — the federal government —and the Defense Department budget on two- and three-month intervals is absolutely stupid."

Kaine and Warner both pointed out that the effects of pending sequestration and budget uncertainty are already being felt in hesitation of contracts and assignments.

Kaine, a member of both the Senate Armed Services and Senate Foreign Relations Committee, recalled how Secretary of Defense Leon Panetta said recently that the budget uncertainty is a real threat to national security.

"He said it is the single greatest threat to national security," said Kaine. "We are talking Iran with nuclear, nuclear North Korea, Afghanistan and Pakistan and Al Qaeda. Our ability to deal with all the external threats depends on having some degree of certainty so we can plan for the rest of the challenges we face."

Warner went over some of the possible fixes for avoiding sequestration. One — getting rid of the idea and replacing it with a balance of some additional cuts and revenue and start of a more comprehensive approach.

"Even under that scenario, there will be additional defense cuts," he said. "It cannot be done unless we do mix of cuts and revenues. But are we going to get it done before March 1? Doubtful."

The second approach is to "buy down a couple of more months" in order to reach a solution. Warner says that comes with issues, though. He said the imbalance could result in breaking many large contracts — and that could end up costing the government rather than saving it money.

The third idea — let sequestration happen so parties can see the urgency in fixing it.

"If we are going to have to go through a little before come to our senses, let's at least give secretaries appropriate budget authority to move money from one account to another," said Warner.

Kaine said "there is blame to go around" for the predicament the government is in. He pointed out that the Senate has done a normal budget process in four years, and the President's budget is late. It is going to take a focused and bipartisan effort, he said.

"We all talk out of both sides of our mouths," he said. "But the day is here. We have to figure this out. We have to get back on a normal budget calendar. Long term, we've got to fix both sides of the balance sheet. We have got to make spending cuts. We have got to show we are serious."

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