The ongoing fight to make sure the budget shortfall doesn’t impact the military or any of their contractors is getting increasingly ugly and political today, as the Obama Administration’s Labor Department is urging contractors to ignore the law regarding anticipated layoffs related to budget cuts.

The law, the WARN Act, obliges companies to give 60 days advanced notice before any anticipated layoffs. The problem is that the budget cuts come through the first of the year, and with companies like Lockheed Martin talking about imposing the cuts January 1, the 60 day warning notice would mean sending out the advanced notice just days before the presidential election.

With contractors reaping juicy profits from the endless increases in military spending, the prospect of job cuts could be a huge political issue to erupt just days before the vote, and the Obama Administration is telling them flat out not to send warnings. Both EADS and L0ckheed, which were planning to issue the warnings, say that after the Labor Department memo they are not sure what to do.

This has Republicans screaming “intimidation,” insisting that the administration is trying to keep the law from being followed because it might harm them politically. At the same time, there is speculation that Lockheed’s advance notice of layoff letters was itself a political ploy aimed at securing the usual spending hikes.