Defense contractors, nervous about the automatic sequestration of defense funds effective January 2013, already have begun cutting back on hiring. If the $500 billion sequestration goes into effect, the industry expects it could affect as many as 159,000 jobs in the DC area.
The story is just the latest chapter in the magnum opus to economic failure that is the congressional appropriations process. This episode brings not the greater debt we’ve seen in years past, but something even more disturbing: a crisis of confidence. Businesses need to know the rules in order to make investment decisions, whether those decisions are to build a new plant or to hire more people. Without that stability, capital sits, unemployment continues and the economy stagnates. Indeed, it is the uncertainty, created singularly by Congress’ failure act definitively last summer, that is now impeding economic recovery.
We all know that Congress eventually will lift the sequestration – and probably without any budget cuts. Simply put, there’s just no way Washington will let that $500 billion just sit there when every defense lobbyist in the world is on their tales. The newbie Tea Party representatives in the House who initially held out then took the bait of a Super Committee won’t fight like they did last time, having now been drawn in more closely to traditional congressional power structure. Where does that leave us? Right back where we were last summer when the debt ceiling was debated to a draw and the Super Committee was created.
It’s simultaneously maddening, frustrating and sickening. Above all, though, it’s disgraceful. Disgraceful because it’s a mess we’ve created and will pass on to our children, leaving them with a weaker and more confused America.