海角大神

Rodney Hudson鈥檚 13-person business, QuickSilver Analytics, builds sampling kits for weapons of mass destruction, used by Air Force bases, the Coast Guard, and Special Operations Forces.

Even though the test kits are widely popular and his Abingdon, Md., company鈥檚 sales average $2 million to $3 million annually, Mr. Hudson is predicting a 15 percent slowdown in orders next year.

That鈥檚 due almost entirely, he says, to the threat of looming cuts known as sequestration, which would contract the US defense budget by $500 billion over the next decade if Congress doesn鈥檛 come to a 鈥渇iscal cliff鈥� deal.

鈥淚 have no idea how it鈥檚 going to go, but it doesn鈥檛 look good. You can鈥檛 plan,鈥� warns Hudson, who adds that he is already considering the possibility of laying off some staff.聽

鈥淲e want to be loyal to people as long as we possibly can, but if it looks bad, the bottom line is that we鈥檙e going to have to let folks go or close the doors.鈥�

Sequestration has for months prompted dire predictions of job and income loss among small businesses nationwide. Defense Secretary Leon Panetta, for one, has alternately called the cuts a 鈥渕eat ax,鈥� a 鈥済oofy meat ax,鈥� and 鈥渇iscal castration.鈥�

But lately, lawmakers have begun moderating their predictions in an effort to reassure the defense industry in particular.

鈥淚f you go off the fiscal cliff, you don鈥檛 actually hit bottom,鈥� says Rep. Chris Van Hollen (D) of Maryland, the ranking member on the House Budget Committee. 鈥淭here are a number of parachutes on the way.鈥�

House Speaker John Boehner has signaled that he might be willing to push back any fight over the federal debt limit for one year.

For their part, some defense contractor executives are now making it a point to stress that sequestration, if a fiscal cliff deal isn鈥檛 reached by Jan. 1, would be less of a 鈥済uillotine鈥� than a 鈥渟peed bump.鈥�

That鈥檚 long been the view of military analysts. 鈥淭he fiscal cliff metaphor just isn鈥檛 accurate,鈥� says Todd Harrison, senior fellow in the Defense Budget Studies program at the Center for Strategic and Budgetary Assessments in Washington. 鈥淚t鈥檚 more of a slope 鈥� but it is a slippery slope.鈥�

Moreover, sequestration does not apply to cases in which defense companies are working now on vehicles and weapons contracts that have already been obligated. 鈥淭hat鈥檚 an important point, because if you鈥檙e a defense contractor, whatever you鈥檙e working on now is something that has already been obligated, and that will continue until the money runs out,鈥� Mr. Harrison says. 鈥淭here won鈥檛 be any immediate impact on Jan. 2.鈥�

Small companies that are already talking about layoffs are 鈥渟elf-sequestering,鈥� he adds. For most companies, it would be 鈥渢wo or three, or even four or five years鈥� before they would feel the impact of sequester.鈥�

Still, in places like Fayetteville, N.C., home to Fort Bragg, the city is already feeling the impact of sequestration, says Joy Thrash, executive director of the North Carolina Defense Business Association, a professional trade association for the defense industry. She recently received an e-mail from the head of a small company who has already lost three major contracts because of the sequestration threat.

Some larger companies in the region are combing through their budgets. 鈥淭hey鈥檙e taking a look at their research and technology to see if they need to cut back on that,鈥� says Ms. Thrash, who adds that she fears this could create consequences for the Pentagon.

鈥淭he problem is that it may hurt the military, because what if they cut research on a product that troops may need?鈥� she asks.

Really, she adds, the problem is the uncertainty. 鈥淚 don鈥檛 know anybody at this point who鈥檚 not touched by the threat of sequestration,鈥� Thrash says. 鈥淚t鈥檚 not that they鈥檙e saying don鈥檛 cut the defense budget: They understand that there has to be give and take. What they鈥檙e saying is, 鈥楯ust get it figured out.鈥� 鈥�