Sequestration looms between now and Johnstown’s Showcase for Commerce.
On March 1, automatic across-the-board federal cuts are set to take place unless Congress and President Barack Obama reach an agreement on how to reduce spending. More than $40 billion of this year’s slashing would occur in defense.
Meanwhile, the Showcase is expected to bring together 150 exhibitors and 2,000 attendees from the military, government and defense contracting industry from May 29-31 inside the Cambria County War Memorial Arena. So, there is obvious concern as to what impact, if any, sequestration will have on the event that is supported by the Johnstown Area Regional Industries, Greater Johnstown Cambria County Chamber of Commerce and other groups.
“Any time that you have uncertainty about business as usual, it makes everybody concerned,” said Showcase Chairman Edward Sheehan, Concurrent Technologies Corp. president and CEO. “It makes it very hard on decision-makers.”
Sheehan thinks sequestration will happen before the federal government puts together an alternative plan.
“I expect it might not last real long,” he said.
The Showcase’s new congressional sponsor, Pennsylvania senior U.S. Sen. Bob Casey, not only discussed sequestration’s impact on the exposition, but also its possible overall effect on the economy.
“Sequestration is a bad idea for a lot of reasons,” Casey said. “You have to cut and make tough decisions, but not all cuts are the same. Indiscriminate across-the-board cuts don’t make any sense.”
The sequester was originally created as part of the Budget Control Act of 2011, passed by a Republican-controlled House and Democratic-held Senate before being signed by Obama. Along with increasing the debt ceiling, the legislation assigned a bipartisan Joint Select Committee on Deficit Reduction the job of eliminating $1.5 trillion in spending over 10 years. In order to motivate the group, a deadline of Dec. 31, 2012, was put into place, meaning sequestration would occur if no agreement was reached by then.
The federal government then passed the American Taxpayer Relief Act of 2012 in early January, which, among other things, moved sequestration from Dec. 31 to March 1. The current sequestration plan calls for cuts of $1.2 trillion in spending from fiscal year 2013 through 2021.
“Sequestration’s a problem,” said freshman U.S. Rep. Keith Rothfus, R-Sewickley, from the 12th district. “The president proposed sequestration back in August 2011 as part of a deal to raise the debt ceiling by $2.1 trillion. It was the president’s idea. Then they kicked off to a supercommittee. The supercommittee wasn’t able to get its job done, so now we’re at this point.”
Rothfus, then a candidate, attended last year’s Showcase.
He plans to return in 2013.
“I’m looking forward to being here again this year,” he said. “I’m looking forward to working with JARI and those with the Showcase to help.”
Even if sequestration is not implemented, its effects have already been felt, as numerous defense contractors, including those with presences in Cambria County, such as CTC and Lockheed Martin, do not have a clear picture of the immediate future.
“It’s definitely weighing in,” said JARI President Linda Thomson. “Company executives are doing what they think they have to do to stay competitive, given lean times.”
On Feb. 13, Lockheed Martin announced a plan to close its Global Supply Chain Services in Richland Township and consolidate the operation with a facility in Middle River, Md. The move is expected to save Lockheed Martin $1.6 million annually, mostly from no longer needing to rent the local building.
Although sequestration is looming, a Lockheed representative said the possible spending cuts did not affect the decision-making process.
“I think mostly it’s a coincidental thing,” said company spokesperson Emily Caruso.
Click here to subscribe to The Tribune-Democrat print edition.
Click here to subscribe to The Tribune-Democrat e-edition.