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McCain Asks Panetta for Sequestration Severance Costs Report

John McCain

Sen. John McCain (R-Ariz.), ranking member of the Armed Services Committee, said in a Wednesday statement he has asked Defense Secretary Leon Panetta to issue a report to Congress on costs associated with potential defense contractor layoffs if sequestration occurs.

In his letter to Panetta, McCain said he requested information on costs from sequester-related layoffs not issued according to the Worker Adjustment and Retraining Notification Act.

The Office of Management and Budget issued guidance on how WARN applies to the potential sequester last week, saying the government would cover contractors’ severance costs if they did not issue 60-day notices of layoffs.

WARN requires businesses to notify employees 60 days in advance of any mass layoffs in most instances.

McCain wants the report within at least 30 days in advance of reimbursing contractors for those severance costs and said the report should include information on funding for the specific program on which employees had been working on and fund transfers between defense accounts.

Severance cost reimbursements could reach about $4 billion, McCain claimed in his letter.

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