Defense sector braces for sequester - WCAX.COM Local Vermont News, Weather and Sports-

Defense sector braces for sequester

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At Preci Manufacturing in Winooski, precision components for the aerospace and defense industry are constantly being built.

"Anything that flies -- like helicopters, tanks, submarines, ships -- you name it," said the company's Jeff Grunvald.

Reporter Gina Bullard: Who is your biggest customer?

Jeff Grunvald: The U.S. Government.

Seventy-five percent of the business is government contracts. That's why all the talk about sequestration has the company bracing."Not knowing is worse than knowing because not knowing there's no way to plan for it and that's a big issue," Grunvald said.

So what exactly is sequestration -- to put it simply, it's mandatory federal budget cuts scheduled to go into effect by March 1st.

"Passed and approved legislation signed by the president  back in 2011 when they had the budget battle that would implement across the board cuts to the U.S. Budget," said Col. Stephen Pomeroy with Norwich University.

Those across the board cuts will be triggered if President Obama and Congress don't agree on a plan to reduce the nation's deficit by $1.2 trillion over the next ten years. Non-defense discretionary programs, or those that don't have earmarked funds, will see cuts of roughly 9-percent. The Defense Department is bracing for a 13-percent cut to its budget.

That means civilian employees at the Vermont National Guard could see a shorter workweek.

"If sequestration is enacted there will be a big impact, particularly on civilians and that translates into some our military technicians who are civilians as well as military members, so there could be a budget impact that will affect Vermont," said Vt. Adjutant General Steven Cray.

Things like Social Security, Medicaid, the food stamp program and veterans' benefits will be exempt. Some government employees will be subject to furlough and/or layoffs. Airport security screeners, customs agents and air traffic controllers would face a day of furlough every two weeks.

"These will be real cuts, but real cuts to the 2013 budget which was 8-percent larger than the 2012 budget, so you'll have the same money to work with as we had in 2012," Col. Pomeroy said.

As far as Preci -- the company isn't sure how or when the cuts could effect business. "Where it trickles down and when it starts effecting major programs I have no idea," Jeff Grunvald said. "Am I worried? Not in the immediate future."

President Obama is looking for a 50-50 mix of spending cuts and tax increases to replace the sequester while Republicans say they will not raise taxes.

When it comes to the state, Governor Shumlin said sequestration wouldn't be pretty but it has no specific plan in place.

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