Letterkenny Army Depot stands to be one of the biggest losers if the federal sequestration cuts take place as scheduled in one week.
According to the U.S. Department of Defense, the depot would absorb spending reductions of more than $449 million. This would mean a massive loss of jobs and a ripple effect on the economy.
“We’ve got real families here that are very nervous and anxious about what’s going to happen,” said L. Michael Ross, president of the Franklin County (Pa.) Area Development Corp.
Defense Secretary Leon Panetta told Congress on Wednesday that if automatic government spending cuts — which is being called a “sequester” — kick in on March 1, he might have to shorten the workweek for the “vast majority” of the Defense Department’s 800,000 civilian workers.
They would lose one day of work per week, or 20 percent of their pay, for up to 22 weeks, he said.
Letterkenny Army Depot north of Chambersburg is Franklin County’s largest employer with about 4,000 workers. The depot repairs Patriot missile systems, aviation generators, vehicles and other items for the military.
“The cuts are going to be devastating, and the Ninth Congressional District is not immune from them,” U.S. Rep. Bill Shuster said, saying sequestration is not the way to balance a budget.
Shuster, R-Pa., said several of his staff members participated in a tour of the depot Wednesday.
“They met with the (depot) command and civilians who are making preparations should the cuts go into effect. We will continue to work with them and take their concerns back to Washington,” Shuster said in an email.
“The design of these cuts is not at all optimal because so much of it falls on the defense budget. The defense department will take a 7.7 percent hit; that’s a big hit in one year,” Sen. Pat Toomey, R-Pa., said in an email.
The military faces $500 billion in budget cuts over 10 years from sequestration.
“Now, while the defense budget should not be sacrosanct, there is a lot of waste at the Pentagon, and we should put pressure on the Pentagon to help identify and cut that waste. I think 7.7 percent is probably too much,” Toomey said.
Toomey said if the sequester goes fully in effect, federal spending will still be greater than it was in 2012.
“The government will continue to grow and will spend more than last year, just not as much as some people thought we might,” he said.
Ross encouraged public comments and transparency from Shuster, Toomey and Democratic Sen. Robert Casey Jr., whose office did not respond Thursday to an interview request.
“At this point, very candidly, I think we need to hear from them what their take is on this,” Ross said.
The sequester is a result of the Budget Control Act of 2011, which passed the House by a 269-161 margin with three representatives not voting, and passed the Senate by a margin of 74-26. Casey and Shuster voted in favored of the legislation and Toomey voted against it.
The agreement increased the debt ceiling. It also specified an incentive for Congress to act. If Congress failed to produce a deficit reduction bill with at least $1.2 trillion in cuts, then Congress could grant a $1.2 trillion increase in the debt ceiling but this would trigger across-the-board cuts. These cuts would apply to mandatory and discretionary spending in the years 2013 to 2021. The idea being that these across-the-board cuts would force Congress to come up with an alternative. The cuts were initially to go into effect Jan. 3. However, that effective date was delayed to March 1 when Congress took action on the extension of the Bush-era tax cuts on Jan. 1.
There would be some exemptions: reductions would apply to Medicare providers, but not to Social Security, Medicaid, civil and military employee pay, or veterans. Medicare benefits would be limited to a 2 percent reduction.
“Letterkenny is something we worry about,” said state Sen. Richard Alloway, who has the depot in his district.
Alloway, R-Franklin/Adams/York, said he is not opposed to federal spending cuts, but feels they should be done fairly.
“You can’t be a Republican and say, ‘I’m for cuts, but don’t cut the thing in my backyard,’” Alloway said.
He said Letterkenny’s work should not simply be transferred to a powerful congressman or senator’s district in the end.
There is not much that can be done on the state level to help the depot through sequestration, Alloway said.
Still, Alloway hopes to use the Pennsylvania General Assembly’s Military Installations and Base Development Caucus, of which he is co-chairman, to show off the depot’s importance. He also said Letterkenny’s seven Shingo medallions for excellence in manufacturing and business practice are a testament to its work.
Ross described a sense of worry and helplessness as the deadline approaches.
“I think the expectation all along was we were going to get this resolved, ... (but) we’re looking at a law that goes into effect next Friday,” Ross said.
“The frustration is that there is very little as a community we can do about it,” he added.
Employees at the depot and their families are being used as pawns in this debate, which is a clash of ideologies, Ross said.
“I think it has absolutely devolved into a game of chicken, of who is going to jump out of the way first,” he said.
Curtailing work at Letterkenny Army Depot and facilities like it will affect defense readiness, Ross said.
Although troops are coming back from Iraq and Afghanistan, their military vehicles need to be refurbished for the next conflict, he said.
“This (issue) is really hard to explain because it’s artificially created,” Ross said.
Shuster said President Obama has refused to put forth an alternative to a plan that was approved twice last year in the House and neither has the Democratic-controlled Senate.
“If the president opposes the House Republican plan, he should put forth an alternative that would protect our troops, our national security, and our economy,” Shuster said.