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GOP Sees Politics in White House Push to Delay Layoff Notices

Congressional Republicans are indignant over last week’s White House decision to encourage a delay in government contractor layoff notifications that could be triggered by automatic spending cuts set to begin in January.

“As Americans learned last week in a Friday evening news dump, the White House is pressuring American defense contractors to avoid issuing layoff notices relating to the imminent threat from the president’s sequester,” Speaker John Boehner (R-Ohio) said in a release today marking 90 days until the cuts – also known as sequestration – go into effect.

Boehner said that cuts, which would be split between security and non-security spending, would hurt national security efforts and charged that President Barack Obama has shown no leadership in dealing with the impending issue.

“This is a White House in denial about the consequences of its own irresponsible actions,” Boehner said.

The Speaker also noted that the House passed legislation in May that would maintain the same level of cuts at $109 billion set for fiscal 2013, but would replace the $55 billion reduction that would hit defense spending with cuts elsewhere in the budget, including cuts to mandatory spending programs such as food stamps and other social programs.

The Senate has not passed that bill nor any similar measure. Democrats were critical of the proposal for cutting social programs.

“The Republican-led House, by contrast, has acted to protect our national security by passing legislation to replace the president’s devastating sequester with responsible reforms and spending cuts,” Boehner said. “President Obama and his do-nothing Democratic Senate have refused to pass the House bill – or any other bill – to address the looming defense cuts.”

House Majority Leader Eric Cantor (R-Va.) also weighed in on the issue Monday.

“For an Administration that talks a lot about transparency, it is disappointing that they apparently think it is more important to protect their political interests than give hard working families any indication that they might in fact lose their job in 60 to 90 days due to inaction by the President and Senate Democrats,” Cantor said in a release.

Under the Worker Adjustment and Retraining Notification Act, employers with at least 100 employees are generally required to provide written notice to affected employees 60 days before ordering certain plant closings or mass layoffs if they are reasonably foreseeable. The sequester is scheduled to take effect Jan. 2, so any layoff notices would have to go out early next month, days before the Nov. 6 elections, a scenario that will be ripe for political saber-rattling.

But the Office of Management and Budget said Friday “that it is neither necessary nor appropriate for Federal contractors to provide WARN Act notice to employees 60 days in advance of the potential sequestration because of uncertainty about whether sequestration will occur and, if it did, what effect it would have on particular contracts, among other factors.”

Citing a policy letter issued by the Department of Labor in July, OMB said “giving notice in these circumstances would waste States’ resources in undertaking employment assistance activities where none are needed and create unnecessary anxiety and uncertainty for workers.”

In an effort to help keep contractors from issuing notices, OBM said that “liability and litigation costs associated with the WARN Act compliance” could be covered by the federal government.

Other Republicans that have also weighed in on the issue, including Senate Judiciary ranking member Chuck Grassley (Iowa) and Sen. Kelly Ayotte (N.H.). The duo today wrote to OMB Acting Director Jeffrey Zients seeking additional information.

“What the administration has done raises serious questions,” Grassley said in a joint release today. “In our letter of inquiry, we’re asking what authority the administration is using to say it is okay to disregard the law and commit to pay for monetary judgments and other expenses resulting from lawsuits. If workers aren’t given the notice they’re due, the costs could amount to billions of dollars for taxpayers. The public deserves answers and accountability without any delay.”

“The administration’s new guidance tells employers to willfully ignore the law and stay silent about looming layoffs until after the election – and promises them a taxpayer funded bailout for their legal expenses if they do so,” Ayotte said. “The administration must explain its legal basis for this interpretation of the WARN Act that leaves taxpayers on the hook, American workers in the dark, and our national security in jeopardy.”

Grassley and Ayotte’s letter comes after the White House released a report on how it would implement the sequester. Republicans said it did not provide the level of detail sought. Congress recently passed a law seeking the report.

Other GOP Members who weighed in on the White House guidance included Sen. John Thune (S.D.), who is the Conference chairman, and Sen. Dan Coats (Ind.).

The sequester – part of last August’s deal to raise the debt ceiling – was triggered by the failure of the super committee to reach agreement on a $1.2 trillion deficit-reduction plan last fall. The threat of such harsh cuts was intended to provide an incentive for House and Senate lawmakers to come up with their own comprehensive plan.

But that didn’t happen, and Republicans have been warning that defense contractors may have to lay off workers as a result of the sequester. Democrats have said that they would be willing to revisit the sequester issue, but have stressed that any deficit reduction package that would replace it would need to include tax increases on upper income earners.

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