Transcript: Press briefing Q&A on impacts of sequestration on non-defense discretionary funding

Partial transcript of press briefing Q&A with NDD United, Aerospace Industries Association, and Task Force for American Innovation on the negative impacts of sequestration. The press briefing was held on Feb. 11, 2013.

Question:
Mr. Rawlings says he favors a balanced package including revenues. I’m wondering if you all agree with that or if some of you think that revenues should not be included?

Wes Bush, Chairman of Aerospace Industries Association and Chairman, Chief Executive Officer and President of Northrop Grumman Corporation:
I can certainly speak for Aerospace Industries Association and Marion as well, and I think all of our member companies we have long called for a balanced approach. To solve our nation’s fiscal issues, we know you just can’t pull one lever. You have to reach and pull all of the levers available to our nation to deal with this. Unfortunately, what we’ve seen today has been primarily…a pulling of the lever on the discretionary budgets. We think this has to be much more balanced. So yes, everything has to be on the table to make sure we make a good decision about the future of our country.

Peter McPherson, President of the Association of Public and Land-grant Universities:
I think all of us believe – Hunter and I have long been on record on this – that there needs to be a balanced approach in the big deal, and that’s what we really have to do the work through the regulatory budget process, we would hope, in the Congress in the month ahead. The struggle that we’ve got right now is how to do we deal with sequester right now. And that’s a lot more complicated and we haven’t really gotten the details on how to do that. But what we do know is this is counter-productive for the long-term situation of the country, including the deficit, to have the sequester go forward.

Emily Holubowich, Executive Director, Coalition for Health Funding and Co-Chair, NDD United:
And I would just add for NDD United for the record. I’m not an economist, but I read what a lot of economists write and all of them say, from Simpson-Bowles to Domenici-Rivlin, we need a balanced approach of spending cuts and revenue. I can tell you right now what we’ve seen is an unbalanced approach. We’ve had $2.50 cut for every $1 of revenue. If sequestration were to take effect, that ratio would go $5 in cuts to every $1 revenue. Clearly not balanced. So we’re hopeful that in the next few weeks, we can see a balanced approach to avoid sequestration and put our nation on a more sustainable fiscal path.

Question:
What’s been the reaction from mostly House Republicans who are against making revenues a part of – are they listening what you all are saying?

Marion C. Blakey, President and CEO of the Aerospace Industries Association:
Yes, I think that one of the things that we have to understand here is that to have the kind of compromise that has lasting important effect, it’s got to be bipartisan. And that means that we’re asking both sides – and I think we’re seeing evidence – that both sides of the aisle are listening without question. We also are pointing out that the area that really has not been considered so far seriously is the question of entitlement spending, and entitlement spending as I think everyone understands is a very fundamental part of how you solve this equation…It’s important for others on the Hill, beyond the House Republicans, to listen to that as well. So there are several facets to this solution.

Question:
How did all of these groups come together under this big tent?

Emily Holubowich, Executive Director, Coalition for Health Funding and Co-Chair, NDD United:
…It’s certainly a function of the environment, and it’s really not that unusual, I think, for us to come together. I think what’s often lost in some of the coverage and conversations on the Hill sort of pitting one against the other when in fact both are critical to our security and safety. You can’t have a strong military when you’re outsourcing science and technology or when you have recruits that are obese and uneducated. At the same time, you can’t thrive in the United States if you’re facing threats from overseas and you feel insecure in your own home and in your own community…

Wes Bush, Chairman of Aerospace Industries Association and Chairman, Chief Executive Officer and President of Northrop Grumman Corporation:
We came together because we recognize we need each other not only to fight sequestration but to make our economy work. This is how our nation functions. It functions when enterprises work together. From the corporate perspective, we need the amazing university education and research system that we have in our nation to help propel our economy. We need employees who get the benefits of great public health and the safety provided by law enforcement. All the parts of our economy have to work together for us to continue to grow and thrive…

Question:
…Would you guys be happy with another short-term solution or would you prefer to see them do something to stop the thing permanently?

Wes Bush, Chairman of Aerospace Industries Association and Chairman, Chief Executive Officer and President of Northrop Grumman Corporation:
I’ll offer an opinion on that. We all know we have to solve this problem, and continuing to kick the can is not the way to solve the problem. Now, would we be relieved if there were a short-term break in this that allow the Congress to come together and act in a way that we know it can act? Sure, absolutely, we’d like to see Congress have the opportunity to resolve this. But it needs to get resolved. We can’t keep kicking the can down the road. We know this process is already having a big impact. It’s having an impact across our country in terms of a willingness on the part of corporations to invest and hire. This is costing our country something today already. We know it’s having an impact in terms of confidence in our economy both domestically and internationally. So kicking the can is not free. It has a cost, and we can’t keep doing that. But if a short-term avoidance is necessary to allow the functions of government to operate as they’re designed to do, then okay, we need to do that. But we need to be aware that this has to be resolved. We do have to come to resolution.

Hunter Rawlings, President of the Association of American Universities:
Wes makes a very important point that I think could easily get lost. This is already having a very negative impact. This is not simply something three weeks in the future. We’re seeing, for example, that the federal agencies are holding back research awards. The University of California system is already reporting over a 20% drop in the research awards to its faculty as compared to last year. And Wes has pointed to how business is already holding back because of this big uncertainty. So this is not future only; this is now. It’s happening. It’s negative…

Marion C. Blakey, President and CEO of the Aerospace Industries Association:
In terms of the contemporary economic impact, our companies are laying off now. Remember that we are absorbing already $487 billion of cuts that occurred under the Budget Control Act in 2011. So when you see in the paper that there are pink slips going out, people are losing their jobs, it is very real. And on top of that as the Department of Defense is announcing, we are pulling back in terms of our readiness, we are pulling back in terms of the equipment that is in the field, we are not going forward with maintenance on critical assets such as our nuclear aircraft carriers…this is maintenance that is necessary and yet we cannot go forward because of the uncertainties and the overhang of sequestration…So these are immediate and very serious drags on the economy…

Emily Holubowich, Executive Director, Coalition for Health Funding and Co-Chair, NDD United:
I would just say in a public health space we’ve already seen 46,000 public health professionals in state and local communities laid off, and that does not include the numbers that are currently experiencing furloughs. It’s almost a joke in the public health community if you work with folks at the state level “It’s furlough Friday” for public health. And these are folks that make sure the food you’re eating this morning is safe, that deliver immunizations, deliver critical preventive services in the community.

And I think that kicking the can in Washington…if it were an Olympic sport, we’d win the gold medal. But it is real and we’re seeing the cuts already back home. They’re planning for sequestration now. I recall a briefing that we did on the Hill earlier where we had a superintendent of schools from South Dakota, and she said that right now – she works on a tribal reservation and she has 4 teachers and one of them, if sequestration happens, she’ll have to lay off…Picture being a teacher and you don’t know in 3 weeks if you’re going to have a job or not. So are you going to buy that new house? Or are you going to buy that new car? Probably not because you have that uncertainty. And all those 4 teachers they don’t know who it’s going to be. So I think we’re seeing the impacts of sequestration already…Kicking the can and that level of uncertainty is not a solution, and so we’re urging folks to work as quickly as they can to stop sequestration and put some certainty back into the economy and people’s lives so they can live their lives and make important decisions.

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3 Comments on “Transcript: Press briefing Q&A on impacts of sequestration on non-defense discretionary funding

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