By Jeremy Herb, The Hill
Lockheed Martin said Monday it will not issue employee layoff notices this year, ending an election-year showdown with the Obama administration.
The company said it based its decision on new guidance issued Friday by the Office of Management and Budget and the Pentagon.
The guidance said the Pentagon did not anticipate killing any contracts on Jan. 2, the day automatic spending cuts are set to begin hitting defense spending. The guidance also said the federal government would cover severance costs that are mandated under a federal layoff notices law.
The decision by Lockheed means tens of thousands won’t get layoff notices days before Election Day, which might have cast a crucial blow against President Obama’s reelection chances.
Other defense firms that had also indicated they could send notices of potential layoffs in November were following Lockheedâ€™s suit Monday, saying they would not be sending them before sequestration took effect.
Layoff notices could have been of particular concern in the Virginia suburbs of Washington, D.C., a key part of the swing state that both Romney and Obama are targeting. The suburbs are home to thousands of employees of defense contractors.
Republican presidential nominee Mitt Romney has repeatedly attacked Obama over the sequestration cuts and the loss of defense jobs, particularly while campaigning in states like Virginia.
Republicans argue that last week’s guidance was a politically motivated effort by the administration to protect Obama ahead of the election, and some were livid on Monday.
Sen. Lindsey Graham (R-S.C.) called the administration’s actions illegal and warned he would do everything he could to prevent taxpayer dollars from being used to pay for severance.
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