Grassley, Ayotte Want Answers on OMB Promise to Cover Defense Layoff Costs

October 2, 2012

Two top Republicans said this week that the Obama administration may not have had the legal authority to tell defense companies that taxpayers will pick up their legal bills if the companies are sued because of layoffs resulting from pending defense cuts.

Sens. Chuck Grassley of Iowa and Kelly Ayotte of New Hampshire said the government could be on the hook for billions of dollars.

“We are concerned about the authority of the executive branch to instruct private employers not to comply with federal law and to promise to pay the monetary judgments and litigation costs that arise out of the lawsuits that may follow,” the senators wrote in a letter late Monday demanding answers.

It’s the latest twist in the fight over the automatic spending cuts, known in budget speak as “sequesters,” that are due to take effect Jan. 2 under the terms of last year’s debt deal.

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