07/18/2012 05:39 pm ET Updated Jul 18, 2012

As Defense Cuts Loom, Weapons Makers Say Tax Hikes Should Be On The Table

WASHINGTON -- Executives for some of the leading defense industry corporations told Congress on Wednesday that tax hikes should be among the remedies considered in order to prevent steep cuts to their budgets.

The remarks came during a tense hearing of the House Armed Services Committee to discuss a looming deadline that would see defense funding slashed by $500 billion if legislators cannot find a way to balance the budget.

The defense industry has lobbied hard to prevent the automatic cuts, known as sequestration, but it has offered little by way of alternatives. At the hearing, Democratic lawmakers lashed out at the generally reticent executives, pressing them on just what, exactly, they believe Congress should do to avoid the cuts.

"I think everything has to be on the table at this point," said Pratt and Whitney's president David Hess.

A second CEO, Lockheed Martin's Robert Stevens, offered more equivocal support for including revenue-raising measures, telling legislators, "When we face challenges in our business ... we try to put into the recipe every possible ingredient that might lend itself to the formation of a solution."

Two other CEOs on the panel -- Sean O'Keefe of EADS North America, and Williams-Pyro's Della Williams -- avoided making similar remarks about tax hikes but joined Hess and Stevens in stressing the damage to their industry and their employees if the companies are forced to make cutbacks.

Sequestration would automatically take effect on Jan. 1 if lawmakers cannot find a solution to the debt crisis.

Throughout the day, partisan fissures grew over how to handle the crisis, even as all but two lawmakers voted to make President Obama explain how he would carry out the cuts.

Washington Rep. Adam Smith, the top Democrat on the Armed Services Committee, spent much of the hearing criticizing the industry titans for dodging a barrage of questions about their recommended solutions.

"Everybody does exactly what you did today," Smith said as the hearing wound down. "You flatly refused about saying anything about making those choices and dump it all on us. Not only do you flatly refuse to say anything about it, you take steps that systematically kick our legs out from under us as we try to deal with it."

The committee's Republican chair, Rep. Howard "Buck" McKeon (Calif.), pushed back against the Democratic hostility, declaring the Armed Services Committee is not the "general welfare committee" and that the defense contractors were only there to elaborate on the sequester's impact on their industry.

After Rep. Tim Ryan (D-Ohio) asked the panel how he should explain to his constituents that averting sequestration will involve borrowing money, a smirking McKeon thanked him for his "beautiful, eloquent arguments."

The political rancor over the automatic cuts did not ease up as the day dragged on.

A news conference with House Majority Leader Eric Cantor (R-Va.) and Virginia Gov. Bob McDonnell (R) was canceled hours after Virginia's Democratic delegation decried the GOP-only event as a strictly partisan affair.

Cantor and McDonnell were expected to discuss how the defense sequester would affect military-heavy Virginia.

Led by Sen. Mark Warner, Virginia Democrats in the House and Senate boycotted McDonnell's routine meeting with his state's elected officials on the Hill earlier in the day.

"In politics everyone wears two hats," McDonnell spokesman Tucker Martin said in an email later Wednesday. "However, policy must always come first. That is why, to assuage Democratic concerns, we canceled our unrelated press conference scheduled for after today's meeting. And yet, even after they got what they wanted, the Democrats still unfortunately chose to just take their ball and go home."

Instead, only GOP members from Virginia's delegation met with McDonnell in Cantor's office.

Despite the partisan tone of the day's events, lawmakers managed to reach a bipartisan consensus on the House floor Wednesday afternoon.

The House passed the Sequestration Transparency Act in a 414-2 vote, effectively asking Obama for a specific outline of how he will implement the more than $100 billion in automatic cuts triggered by the failure of the Super Committee last fall. That bipartisan panel was tasked with finding a $1.2 trillion deficit reduction package.

During floor debate Wednesday, Rep. Todd Young (R-Ind.) described the bill as "blessedly bipartisan."

Cantor's office blasted out a statement on the law's approval just a half an hour short of when he and McDonnell would have addressed reporters outside the Capitol.

"Time is overdue for the President to come to the table to work with Congress," Cantor said in the statement. "There should be no disagreement that a strong national defense and job creation are top priorities."

This story has been updated to reflect McDonnell spokesman Tucker Martin's comments.