President Barack Obama made a late appeal for compromise to stave off across-the-board cuts Tuesday in a speech at Newport News Shipbuilding.
He called sequestration – the budgetary term for the cuts – an ugly word, and an even uglier concept, particularly for working-class people like the roughly 2,000 shipyard employees who crowded into a submarine construction facility for the event.
"The main reason I'm here is to call attention to the important work you're doing on behalf of the nation's defense, and this work, along with hundreds of thousands of jobs, are currently in jeopardy because of politics in Washington," Obama said, speaking in front of an aircraft carrier propeller.
Sequestration is scheduled to start March 1 if Congress doesn't find another way to address the budget deficit. It would come on top of another set of cuts stemming from the inability of lawmakers to pass a budget for the 2013 fiscal year.
Navy officials have already canceled or delayed a string of ship maintenance projects, including a postponement of the refueling and overhaul of the aircraft carrier USS Abraham Lincoln, which had been scheduled to come to the shipyard on Valentine's Day.
The shipyard also builds new aircraft carriers and is one of two manufacturers of nuclear-powered Virginia-class submarines, and though it has long projects under contract the construction programs could, nevertheless, be impacted long-term. The pace of sub construction could slow, and the start of the carrier John F. Kennedy could be delayed if lawmakers don't take action on cuts.
Obama pleaded instead for a deal.
And he urged lawmakers to follow the lead U.S. Reps. Scott Rigell, R-Virginia Beach, and Robert C. "Bobby" Scott, D-Newport News, and remain open to a compromise.
Obama credited Rigell for asking colleagues in the House "to consider closing tax loopholes instead of letting these automatic cuts go through. (Rigell)'s more than prepared to make some really tough cuts but he wants to do it in a smart way."
But, Obama said Rigell is the exception in his party: "There are too many Republicans in Congress right now who refuse to compromise even an inch when it comes to closing tax loopholes and special interest tax breaks."
Obama said loopholes should be closed "for the well-off and the well-connected" – specifically "hedge fund managers, oil companies and corporate jet owners."
He also said Democrats have to make concessions.
"None of us will get 100 percent of what we want."
House Speaker John Boehner, R-Ohio, told reporters at a news conference earlier this week that Republicans understand there are "smarter ways" to cut the deficit but are waiting to see a proposal from the Democratic controlled Senate.
Boehner also criticized the president for "holding campaign rallies" on sequestration instead of spurring the Senate to action.
While the president was in Newport News, Senate Democrats huddled in Washington in an 11th-hour bid to head off sequestration. Sen. Mark Warner said the day's developments offered "some hint of good news."
Senators on both sides have been talking about a deal on the budget cuts that would include new revenues and reforms to social programs.
Failing that, the Senate could propose legislation allowing the country to avoid sequestration for the balance of fiscal year 2013. That plan makes smaller cuts over a smaller period of time – the remainder of the year – through a combination of new revenue and spending cuts.
A third option would give the White House authority to cut the budget at the level envisioned in sequestration but with flexibility in terms of what programs would be scaled back. The Navy in particular has asked for this authority, saying it would allow them to restart stalled projects.
But Obama dismissed this possibility during his shipyard speech. He said the cuts are so steep that even if he has such discretion, they'll damage the country. And Warner said he didn't like the idea either, even if it's better than doing nothing.
"If the sequester is stupid on steroids, this is only slightly less stupid," Warner said. "Let's hope it doesn't get to Plan C."
In his introduction for the president Mike Petters, CEO and president of shipyard parent company Huntington Ingalls Industries said sequestration demands a "balanced approach" and a collaborative effort in Washington.
"Sequestration doesn't benefit anyone, and that includes the thousands of shipbuilders here today, our families, our friends and neighbors, and our extended family of 5,000 suppliers in all 50 states," Petters said.
Before the speech, Petters and two shipyard executives huddled with the president, and showed him two attack-submarines under construction: the Illinois, a boat that Michelle Obama is sponsoring, and the John Warner.
Petters told the Daily Press it's tricky to pinpoint where members of Congress are on a solution to avert sequestration but that people should understand what happens if a deal cannot be reached.
"I learned a long time ago, when you're inside of a negotiation, folks outside the negotiation don't really know what's going on," Petters said.
"My purpose is to say, 'Here are the consequences or potential outcomes.'"
The shipyard has not laid out exactly how it would react to cuts. But Petters has said that if the Lincoln refueling is not funded in the current fiscal year, the company, which has been in a hiring posture, will have to consider layoffs.
The speech represents the first presidential visit to the sprawling shipyard – Virginia's largest industrial employer – since George W. Bush came for the christening of the aircraft carrier bearing his father's name.
Tuesday's event was popular, with workers filling a large section of the Supplemental Modular Outfitting Facility, a 65,000-square-foot space finished in August to accommodate a faster schedule for submarine production.