That was the grim message that U.S. Sens. Saxby Chambliss (R-Moultrie), Johnny Isakson (R-east Cobb), and U.S. Rep. Phil Gingrey (R-Marietta) delivered to a group of community leaders at Southern Polytechnic State University on Tuesday.
Chambliss said the president of Lockheed Martin has spoken about the impact such cuts would have on Lockheed by warning of the possibility of plant closings.
“Sequestration itself is about an 18 percent cut to the Department of Defense,” Chambliss said. “If you applied it across the board to every contract that exists in the Department of Defense, you would devastate the contract community.”
Georgia is the fifth largest state from the standpoint of an industrial and military base, Chambliss said.
“When you look at the numbers overall around the country, it’s projected somewhere between 800,000 and a million jobs will be lost, and Georgia is going to be impacted in a very heavy way,” Chambliss said. “Lockheed Martin has already sent out notices that are required by law to their employees that come Jan. 2, some of them may lose their jobs,” he said.
Isakson said Dobbins Air Reserve Base has a $182 million annual impact on the local economy.
“$182 million is a lot to pull out of the local economy in terms of services, restaurants, barber shops, laundries, all those types of things, so it has an impact on the whole county,” Isakson said.
The proposed cuts are the result of the Budget Control Act of 2011 — which Isakson voted for and Chambliss and Gingrey voted against. The Act created a 12-member bipartisan “supercommittee” to cut the federal deficit. Yet the supercommittee failed to reach consensus last year, which triggered a poison pill in the Act, spurring across-the-board cuts which are slated to begin in January.
Congress may still act between now and the end of the year to stop the cuts, which is why Chambliss has been traveling around the state talking about the dangerous effects that sequestration could have on the country.
“Sequestration was put in the Budget Control Act as a hammer over the head of the select committee, whose job it was to find some cuts,” Isakson said. “We never thought they would blink. We never thought they would look the other way.”
Gingrey expanded on the reason for the poison pill being placed in the legislation.
“We finally stood our ground on not just automatically defending the debt ceiling every time a treasury secretary or a president says, ‘members of Congress, it’s time once again to increase the debt ceiling to borrow more money,’” Gingrey said.
Chambliss said he was “not greatly optimistic” that a deal could be reached before the end of the year to head off the cuts.
“This law has been on the books for a year, and Congress has a history of kicking the can down the road and trying to solve long-term issues with short-term solutions,” Chambliss said. “Now that being said, we’ve never had an issue in my 18 years in Congress that is as significant as this issue, and more and more policy makers are coming to understand it because their constituents understand it. People all across America get it. I’m hopeful that that groundswell and pressure will come from the bottom up toward Washington and will force us back to the table to negotiate an agreement.”
The country is in serious financial trouble, spending at a rate of 25 percent of GDP even though revenues are around 15 percent of GDP, Chambliss said.
“So that 10-point gap between the amount of spending your federal government does and the amount of revenue that your federal government takes in has created almost a $1.5 trillion annual deficient for the last four years,” Chambliss said.
That means the U.S. now borrows 40 cents out of every dollar it spends.
The largest holder of U.S. debt is China, which could present an interesting situation in the future given that the U.S. is bound by treaty to defend Taiwan against Chinese attack, Chambliss said.
“We will defend Taiwan,” Chambliss said. “We will live up to our obligation. But we’ll have to borrow the money from China to defend Taiwan against an attack from China.”
There are currently four options on the table, Chambliss said. The first is to do nothing and let the cuts take effect, something that many members in Congress think should happen, although Chambliss believes it is a bad idea.
The second option is to eliminate the sequestering provision.
“That’s really not a good option either because we need to reduce spending by that additional $1.2 trillion,” Chambliss said.
The third option is to delay the cuts for a period of months.
“The problem with that is we will procrastinate, and we’ll be back here in either three months, six months or 12 months where we’ll be telling you, ‘OK, here we are again at a crucial stage,” Chambliss said.
The fourth option is what is called the grand bargain, which adopts the Bowles-Simpson proposal as well as the one Chambliss’s Gang of Six recommended that addressed the $17 trillion debt the U.S. faces next spring.
“(That is) a combination of reduction in spending, taking the entitlement programs and reforming them in the right way before they go broke, as we know Social Security and Medicare are fixing to do, and then thirdly get our tax code modified in a way that makes it much simpler and less complex and more competitive from a corporate standpoint from our folks around the world that we can energize the economy and increase revenues and get them up to where they need to be,” Chambliss said.
“These are not going to be easy votes to make. We’re going to have to see spines by members of Congress that are not always there because these are not going to be popular votes. But folks, we’re in serious, serious trouble in this country, and unless we make those hard and tough votes and unless we have the support back home to make those votes, then we’re not going to fix the problem.”
Among those in attendance were Cobb Schools Superintendent Dr. Michael Hinojosa, Cobb Chamber Chairman Tony Britton, Chamber CEO David Connell, SPSU President Dr. Lisa Rossbacher, lobbyist Michael Paris, county manager David Hankerson and state Sen. Doug Stoner (D-Smyrna), to name a few.
Britton said after the forum that unfortunately there were no new surprises.
“Washington’s got a lot of decisions that need to be made, and as the Senators and Congressman Gingrey said it needs to be done, but it needs to be done appropriately,” Britton said. “I worry about the military community here in general; I worry about any of those associated businesses that tie in, certainly Lockheed is one of those. Whether it’s cutbacks, whether it’s closures, I certainly think they expressed the importance of Dobbins, there’s only one other joint base like this it sounds like in the country that has as much presence, so that gives me a little peace of mind, but in this day and age, peace of mind is only until tomorrow comes out.”
Coming out of the forum, Britton said he was certainly not in a more peaceful frame of mind.
“They did address what has happened since the supercommittee met, and I’m glad to hear that there are more things that are ongoing now,” Britton said. “I don’t like all the options that the senator laid out of kicking it down the road. It needs to be addressed for our business community but also for our military community.”
As to whether the problem will be solved by January, Britton said he just doesn’t know.
“What I would say from the Chamber’s standpoint and the business community I believe we’ve done a great job in addressing our military partners here in the community, but I think we need to reach out and do even more now that we’ve got the Guard here with their headquarters all the more reason we have to be constantly reaching out to them, engaging them because their life seems to be changing on a day to day basis.”