Now, with another round of sequester cuts looming, the lobby is again sounding the alarm, but its past hyperbole has defanged its warning. "When they went full bore saying the sky is falling January 2, and then later on March 1, they were betting it would never actually come to pass—so no one would be able to say they were overhyping this or exaggerating the immediacy of the impact," says Todd Harrison, a defense-budget analyst at the Center for Strategic and Budgetary Assessments. "They miscalculated. Now the defense industry is left with its credibility damaged."
The situation is all the more painful for defense lobbyists because this time around—perceptions aside—they would have had a much stronger case to make. If the proposed budget deal founders, the Pentagon could lose $52 billion from its 2014 request; if the deal passes, congressional appropriators must still find a way to cut $31 billion.
Last year, the Pentagon used a cushion of unobligated funds to pay down some losses, and it delayed weapons programs and testing to avoid cancellations. But this coming year, that cash has evaporated. More cuts mean the Pentagon can no longer mask the pain and must make tough decisions on weapons programs. Preserving pay and benefits for troops means further raiding funds for research and development.
Warning of disaster—while still lacking specific cuts to make a strong case—is a losing proposition. Even the lobbyists acknowledge the impotence of their message now. "All the screaming to high heavens" about how sequester would raise the unemployment rate came too soon, says one from a major company. "Whether it's the voting public or elected officials, I think there is legitimate reason for them to question the industry's estimations of significant job losses." Still, lobbyists can point to some visible signs of military distress: The Army says that only two of its 43 active-duty brigades are fully ready for combat. The Navy canceled the deployment of an aircraft carrier to the Persian Gulf. Hundreds of thousands of civilians were furloughed, and the services say more long-term cuts will force them to downsize people and equipment.
But the signals are confusing. Despite warnings that sequestration would harm operations, the U.S. deployed warships for high-profile relief efforts in the Philippines, and President Obama floated the possibility of military action in Syria. And although some layoffs have come—Lockheed Martin cut about 4,000 jobs last month—major defense firms appear to be doing just fine: Defense giants, including Lockheed and Raytheon, reported third-quarter profit increases. "There have definitely been people who have accused us of crying wolf," AIA spokesman Dan Stohr says. The group, he says, did not anticipate that the Pentagon could minimize the sequester's pain. "We were taking our best shot at trying to estimate the effects, with the information we had at the time." This year, AIA is no longer commissioning unemployment studies—"been there, done that," Stohr says—but is focusing instead on "messages that resonate." Perhaps in tacit acknowledgment that defense is not the center of the political universe right now, AIA this year partnered with domestic sectors, including education, to talk about the sequester's broader effects on the nation's workforce.