For the last several months, Gregory Bloom has worried about his small Irvine aerospace business and what would happen if federal funds were held back or "sequestered" because of Congress' inability to reach a budget agreement.

And now his worst fears are approaching. Cuts in the nation's defense budget could total $3.2 billion in California alone, and Bloom knows the Southland could be hit hard in the months ahead with payrolls, contracts and plans all in doubt.

"We could wake up and face a world we've never seen before," Bloom said. "We can't make long-term decisions on an uncertain future."

As president of Seal Science Inc., a maker of rubber gaskets for fighter jets, Bloom made several trips to Washington to warn lawmakers that the defense industry could be severely harmed by the cuts.

On Friday, $85 billion in federal spending is set to be slashed over the final seven months of this fiscal year unless Congress reaches an agreement on reducing the mounting federal deficit. Defense programs are expected to be cut about 15% for the remainder of the fiscal year, according to the White House.

Specific cuts to programs remain largely a mystery, but for companies such as Seal Science, with 120 employees, alarm bells are ringing. Bloom has held back on hiring and investing in new machinery because he has no idea what to expect.

He's not alone. Thousands of Southern California aerospace suppliers many with only a handful of workers collectively employ more than 162,000 people in California. With jobs on the line and state unemployment already at 9.8% at the end of 2012, all eyes are on Washington.

Sequestration's biggest effect would be to California with an estimated $3.2-billion cut in military spending on procurement, wages and grants, according to data compiled by Federal Funds Information for States, a service created by the National Governors Assn. and the National Conference of State Legislatures.

Rep. Howard P. "Buck" McKeon (R-Santa Clarita), chairman of the House Armed Services Committee, said he believes sequestration will go forward and that Congress is playing political chicken with people's jobs by not coming to an agreement.

"There's going to be drastic consequences for California," he said. "The large companies will survive, but the small companies don't have the finances to wait this thing out."

More here:

Southland aerospace firms brace for defense cuts