October Wake-Up
"The markets don't want to wait until Dec. 31," Fisher, a former Federal Reserve and Treasury official, told Bloomberg Television on May 30. "Congress is going to have to wake up in October when the markets start pricing in the uncertainty of a recession in 2013."
Lawmakers, for their part, said they don't anticipate much from Congress until after the November election. The two parties are just too divided.
Preferred Systems Solutions is among government contractors coping with delayed procurements and agency cost-cutting, said Scott Goss, president and chief executive officer of the Vienna, Virginia-based engineering and information technology provider. One intelligence agency asked Goss to lower his charges on an existing 10-year contract.
Feeling 'Squeeze'
"I'm feeling more of a pinch and squeeze than I ever have before," Goss said. "As soon as they start these massive cuts, they're going to impact the economy."
Defense contractors are "most fearful" of across-the- board reductions that could spur as many as 350,000 job losses if Congress doesn't act, said Cord Sterling, vice president of the Aerospace Industries Association of America.
In the absence of guidance from President Barack Obama's administration about how the cuts would be carried out, companies "have to assume those go into place," he said.
The prospect of cuts already is having a "chilling effect" on the industry and Lockheed Martin Corp. and other companies may stop hiring and training, Robert Stevens, chief executive officer of the world's largest defense company, said in March on Capitol Hill. Last month he said that laws requiring advance notice of firings may prompt grim warnings in September and October.
Other companies have changed their hiring plans. RTI International Metals Inc. began building a plant in Virginia in 2007, intending to hire more than 200 workers and devote half of the facility's capacity to defense programs, said Dawne Hickton, chief executive officer of the Pittsburgh-based titanium manufacturer.