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Panetta, Defense Industry Leaders Meet to Discuss Sequestration

Jul. 24, 2012 - 10:21PM   |  
By MARCUS WEISGERBER   |   Comments
Defense Secretary Leon Panetta speaks with defense and aerospace industry CEOs at a meeting sponsored by Aerospace Industries Association, National Defense Industrial Association and Professional Services Council.
Defense Secretary Leon Panetta speaks with defense and aerospace industry CEOs at a meeting sponsored by Aerospace Industries Association, National Defense Industrial Association and Professional Services Council. (Erin A. Kirk-Cuomo / Department of Defense)
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U.S. Defense Secretary Leon Panetta and a diverse group of more than two-dozen CEOs continued discussions of how $500 billion in cuts to military spending would impact the defense industry and DoD and potential courses of action Congress might take to avert the reductions.

The Aerospace Industries Association, National Defense Industrial Association and Professional Services Council sponsored the meeting, one of the largest gatherings to date between DoD leadership and industry on the subject.

Panetta was joined by Frank Kendall, the Pentagon’s acquisition chief; Bob Hale, comptroller; and Brett Lambert, the industrial policy chief.

In all, 27 top industry officials — including Lockheed Martin’s Robert Stevens, SAIC’s John Jumper, Boeing’s Jim Albaugh, CACI’s Dan Allen, Northrop Grumman’s Wes Bush, General Dynamics’ Jay Johnson and Textron’s Scott Donnelley — attended the meeting.

The number of attendees and broad range of areas they represent — such as prime contractors, subcontractors, hardware manufacturers and service contractors — is significant, defense observers said.

“It really was representative of the entire industrial base that supports the Department of Defense,” said one source who attended the meeting.

With sequestration — $500 billion in mandatory defense spending cuts over the next decade set to begin in January — looming, the group discussed four possible scenarios that might play out in the coming months. They are:

• Congress does not act and sequestration happens;

• During the lame duck session of Congress after the November elections, a plan is constructed to thwart sequestration;

• Members of the congressional supercommittee come up with a $1.2 trillion cut to avert sequestration; and

• Congress inserts language into a continuing resolution that delays sequestration another year or two when there is a less-heated political environment.

No decisions were made about which option the group should support, but there was solid agreement to apply pressure on Congress that sequestration would be damaging to DoD and the defense industry, defense and industry sources said.

Attendees also discussed how sequestration could result in massive job cuts and how other “domestic cabinet agencies” could apply pressure on Congress to modify the Budget Control Act of 2011, the law that mandates sequestration to lower the U.S. deficit, should lawmakers not be able to agree on alternate ways to reduce the country’s debt.

“Panetta is right now the only cabinet official that is doing anything to try to ward off what is going to be a total disaster for all industries, not just the defense industry,” the official who attended the meeting said.

“Secretary Panetta and industry are 100 percent on the same sheet of music on the fact that everybody’s got to do everything we can to basically put pressure on the Congress to fix the problem,” the official added.

Panetta was adamant that he wants to keep “the dialog going” with industry, the official said.

Panetta has been routinely meeting with top industry leaders over several months to discuss the impact of sequestration.

“Secretary Panetta believes it is critical Congress act to avoid sequestration,” said Carl Woog, assistant Pentagon press secretary.

———

Vago Muradian contributed to this report.

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