November 20, 2012

Defense industry cautiously upbeat on sequester

So far, this fall’s lame-duck congressional session has been stuffed with sensationalism, but defense insiders are confident that a defense authorization bill and sequestration won’t fall by the wayside.

November’s return of Congress was supposed to bring focus on the National Defense Authorization Act and the avoidance of sequestration, but those priorities were interrupted by calls for a select committee to investigate the Sept. 11 terrorist attacks in Benghazi, Libya, and the flurry of attention to CIA Director David Petraeus’s resignation over his extramarital affair.

“It’s suddenly crowded with stuff that we had no idea was coming. … It took people a little off their game, it looks like,” said Bill McQuillen, vice president of public affairs for the consulting group JDA Frontline.

But while lobbyists and advocates can’t help but notice that their priorities aren’t making the morning television shows or drive-time radio discussions, they’re confident their issues will be addressed in hushed tones far from the view of the media.

“I’m working so hard on [the NDAA], but every time I lift my head up, it’s another report on Benghazi or Petraeus,” one defense lobbyist told POLITICO. “I’m still laser-focused on NDAA. There’s a consensus among staff and members that there will be a bill done. I think it is still in a good place.”

“There is a pretty strong scramble, both in industry and in government, in how to deal with these coming defense cuts. … I’m not too worried about the government juggling more than one ball at the same time,” added Robert Newton, the CEO of NCE, a defense engineering and consulting firm based in Tucson, Ariz. “What the industry cares about is that sequestration won’t dramatically affect the defense industry and the defense capabilities that we have. That’s the detail we’re just yearning to hear about in the industry.”

In fact, a shift in focus away from sequestration might be just what the doctor ordered.

“It’s better to have the Senate work on NDAA without pressure at this point,” said a senior staffer for a top defense firm. “We need some guidance — some sense of congressional priorities.”

The issue for many politicians, it seems, is that the solution to sequestration will be decided by a very small group of House and Senate leaders, forcing others to create ways of gathering attention.

“Other members need to find things to keep them busy and keep their names in the papers and faces on TV, so those House members and senators will focus on a Benghazi select committee and the Petraeus scandal — while the ‘real’ work gets done by the leadership,” the first defense lobbyist said.


“The rank-and-file members have little to do with the deal that will ultimately be made — or not — regarding the fiscal cliff, and while they wait for the House and Senate leadership and White House to decide, they’ll need legislation on the floor to buy time, including the NDAA,” added defense analyst Mackenzie Eaglen of the American Enterprise Institute.

One possible problem for NDAA, however, will be if Republicans on the warpath start attaching Benghazi riders to the bill.

“There are going to be a million amendments related to Benghazi that could stall NDAA, which would give [Senate Majority Leader Harry] Reid an opportunity to claim he tried and Republicans failed to pass an authorization,” predicted the defense firm staffer.

But the first defense lobbyist doesn’t think this will happen. If floor action leads to obstacles from Republicans, it’s likely that the Senate will go into a “ping pong” scenario and go straight to a conference with the House.

“I hope that none of the senators try to attach crazy riders that the White House will have to veto,” said the lobbyist, pointing out that Sen. John McCain, a passionate advocate for the Benghazi select committee, has shown a “commitment and a seriousness” to getting the NDAA passed. “[A Benghazi amendment] is maybe not a poison pill, but pretty close to it. And if you’re in a lame-duck situation with not much time left, why would you complicate your life?”

Reid may have had this thought on his mind Wednesday evening when he announced plans to legislate on the NDAA after Thanksgiving.

“I’ve been assured by Sens. [Carl] Levin and [John] McCain … that all these nonrelevant, vexatious amendments, they will help us table them or dispose of them in some appropriate matter,” he said on the Senate floor.

So while the airwaves are saturated with scandal, those familiar with defense issues say progress and attention continue behind the scenes.

“Fiscal cliff issues, including but certainly not limited to sequestration, will continue to be the single most urgent topic during the lame-duck session,” said Nora Bensahel of the Center for a New American Security.