Workers at federal defense contractors across the country may see WARN notices go out as early as September if Congress cannot strike a bipartisan deal on the federal budget soon. In 2011 Congress was unable to agree to a bipartisan budget that combined cuts and revenue streams and instead kicked the can down the road. Their inability to come to an agreement will result in automatic sequestration effective January 2, 2013.

Sequestration will force $1.2 trillion of automatic spending cuts over 10 years, roughly half of that coming in defense spending.

Contractors, like Lockheed Martin, and Huntington Ingalls Industries say they will be forced to cut their workforce by as much as 10 percent if sequestration takes effect.

The potential new budget cuts come at a time when the Defense Department is already reducing projected spending by $487 billion over 10 years as required by the Budget Control Act passed by Congress last year.

Republicans in the House want to cut funding to many social safety net programs like Medicaid and Medicare and have refused to raise taxes. Democrats believe that tax revenue enhancements have to be part of the final plan. In a recent article in The Hill, House Armed Services Committee ranking member Adam Smith (D-WA) said, "My position is pretty straightforward. We have to find $1.2 trillion, revenue has to be part of it and we can't separate out defense. I don't want to see transportation and housing and education devastated any more than I want to see defense devastated."