February 28, 2013
When Transportation Secretary Ray LaHood appeared on network and cable television last week and told Americans to expect massive delays at airports because of a “disaster” caused by the sequester, he accomplished two things: He scared travelers who were told that air-traffic controllers would be laid off, and he gave the airline business heartburn over potential revenue losses.
LaHood was one of a dozen cabinet members in the Obama administration who appeared in the media to make the case to abandon the budget cuts imposed by the sequester, a plan agreed upon by the president and Congress in 2011 in the wake of failed budget talks. LaHood called it a “calamity;” Janet Napolitano, Homeland Security secretary, said, “We can’t maintain the same level of security.”
But not everyone is buying the doomsday scenarios, especially the Republicans.
The mounting administration warnings of literally hundreds of thousands of layoffs and furloughs in the private and government sectors if sequestration is allowed to take hold raises an intriguing question:
Why is it that a handful of agencies, including the General Accountability Office (GAO), the Small Business Administration and possibly the behemoth Department of Health and Human Services are likely to avert furloughs while other departments claim they are powerless to block the personnel actions?
The GAO has reduced its workforce by 60 percent in the last three years, cutting more than 350 full-time employees through attrition, according to GAO congressional testimony. The agency began planning to absorb the sequester cuts late last year, and has already reduced travel costs by 36 percent and infrastructure costs including information technology by nearly 21 percent.
Additionally, the GAO, with an annual budget of $526.2 million and a workforce of 2,975, plans to further reduce travel costs and employee benefits, according to Charles Young, the GAO’s director of public affairs. “Furloughs are a last resort and we are hopeful that we can avoid them,” Young told The Fiscal Times.
Similarly, the SBA, with an annual operating budget of $949 million and a staff of roughly 3,200 employees has indicated it will be able to avoid furloughing workers by making fewer “504” economic development loans to small businesses. And the Department of Health and Human Services, with a $76.4 billion annual budget and about 66,000 employees, has signaled the possibility that it too can get through the year without furloughing workers.
LaHood said during a White House briefing Feb. 22, “Over $600 million of these cuts will need to come from the Federal Aviation Administration, the agency that controls and manages our nation’s skies. As a result of these cuts, the vast majority of FAA’s nearly 47,000 employees will be furloughed for approximately one day per pay period until the end of the fiscal year, and in some cases it could be as many as two days.”
But Republican Gov. Bobby Jindal of Louisiana replied that there were “hundreds of millions of dollars on consulting contracts, on travel” in the agency that could be cut instead of furloughing workers. “Let’s not cut the air traffic controllers first, let’s cut waste” he said on NBC’s “Meet the Press” Feb. 24.
Indeed, the House Transportation Committee staff ran the numbers and came up
with another way to achieve $600 million in cuts,” according to the Washington Post. They noted that the FAA did not use $200 million of its quarterly obligations in the first quarter and that it appeared to have budgeted $500 million for consultants, and $200 million for supplies and travel. According to their math, the quarterly savings, a reduction in non-personnel costs and a hiring freeze would easily fund the sequester reductions.
FAA officials disputed the committee staffers analysis, saying they misinterpreted some of the numbers. Still, many Republicans believe plenty of savings can be found short of forcing large numbers of federal employees to accept reduced work weeks and accompanying 20 percent reduced paychecks.
THE LAST STRAW
The Obama Administration’s decision to release hundreds of illegal immigrants from detention centers along with the threat of widespread furloughs of air traffic controllers ahead of $85 billion of spending cuts set to kick in on Friday have exacerbated the Republican outcries. They believe the president is using scare tactics to paint the GOP as the cold, uncompassionate party that doesn’t care about people. And they accuse Obama of shirking his responsibility for managing the budget reductions.
Several House members speaking at a Wednesday panel sponsored by the conservative Heritage Foundation said they view the president’s claim of hundreds of thousands of layoffs with extreme skepticism and consider the deficit reduction to be an economic positive. “He wants a crisis and he wants to try to blame it on us,” said Rep. Mick Mulvaney, R-S.C. “He has the ability to manage this money . . . My guess is he chooses to ignore that responsibility.”
House Transportation Committee Chairman Bill Shuster, a Pennsylvania Republican, meanwhile challenged Transportation Secretary Ray LaHood’s recent warning that furloughs of FAA traffic controllers would raise havoc with the nation’s airline traffic this spring and summer, noting that the Air Traffic Organization’s operating budget is $7.4 billion, and that a 5 percent cut would amount to a mere $370 million.
"This is a time we really need to sharpen the pencil of the FAA,” Shuster told FAA chief Michael Huerta. “And I've got to believe you're able to find $30 million a month in a $7.4 billion budget ... without the threat of endangering safety.
White House Press Secretary Jay Carney insisted yesterday that the administration was not playing political games with the looming sequester, and disputed suggestions that the White House had influenced the decision of the U.S. Immigration and Customs Enforcement or ICE to begin releasing a few hundred non-criminal illegal immigrants from detentions centers in a move to stay within ICE’s current budget.
“This was a decision made by career officials at ICE, without any input from the White House, as a result of fiscal uncertainty over the continuing resolution, as well as possible sequester,” Carney told reporters.
A RABBIT WARREN OF FEDERAL AGENCIES
Federal departments and agencies differ greatly in terms of their size, budgets and mandates, and each faces a different challenge in navigating sequestration – a seldom used tool that automatically imposes cuts of a specified percentage on agencies, all the way down to individual programs and projects.
For the fiscal year that began Oct. 1, the sequester would cut defense by $42.7 billion, a 7.9 percent reduction; cut domestic spending by $28.7 billion or 5.3 percent, reduce Medicare payments to providers by $9.9 billion, a 2 percent reduction, and cut other mandatory programs by $4 billion.
While revising priorities and programs can help in some ways, experts say, some departments and agencies are so overwhelming dominated by personnel-related costs that avoiding job cuts or furloughs is highly difficult, if not impossible. Those include the Pentagon, the Department of Homeland Security, and food safety and inspection operations.
Patrick Lester, a policy expert with the Center for Effective Government, said yesterday that he doubts the White House is intentionally pressuring department heads to exaggerate the impact of sequestration, for fear of some of the criticism they are now beginning to hear from House Republicans. “I strongly suspect what they’re doing is playing hands off and letting the agencies figure out how to do this and letting the bureaucrats within the Office of Management and Budget work with the agencies.
“It would be very stupid for them to actually start playing political games with this because that would open them up to exactly that charge – suddenly they have to take ownership of all the things that are happening because they supposedly made them happen,” Lester said.
SEQUESTER? WHAT SEQUESTER?
However, Lester contends the administration missed an important opportunity to prepare late last year to mitigate the overall impact of the sequester, using a number of tools that were available at the time. Those included OMB’s ability to carefully control and calibrate the rate of spending by agencies with an eye to the impending automatic cuts; using carryover funds to help cushion the impact; redirecting funds to more urgent program and activities; delaying approval of new contracts and grants, cutting back on travel, eliminating bonuses and awards, and other cautionary measures.
“Altogether, this legal authority is probably sufficient to avoid furloughs and Reductions in Force for most federal agencies for at least several weeks,” Lester wrote in a 10-page analysis late last year. “However, as is true of every other option described in this paper, just because the administration may have the authority to avoid personnel cuts does not mean that it will choose to use it.”
That is certainly the case of the Defense Department, which recently indicated it would likely furlough as many as 800,000 civilian employees later this year to save money for other priorities – such as weapons systems and contracts.
The sequester, which calls for $1.2 trillion of long term deficit reduction equally divided between defense and domestic programs, was originally conceived as a forcing mechanism – spending cuts so blunt and unacceptable to many that they would force Congress and the White House to devise an alternative set of savings.
But Obama’s call for a “balanced” package of spending cuts and additional tax revenue has been repeatedly rejected by House Speaker John Boehner, R-Ohio, and other GOP leaders. And what was once considered unthinkable – that the sequester would actually take affect – now seems almost a certainty.
Tom Shoop, editor of Government Executive Magazine and an expert on federal personnel issues, said yesterday that he doesn’t assume that all the cuts that have been described in grisly detail by the administration will necessarily take effect. “If you really listen to what agencies are saying, they’re sort of saying ‘Up to this many people for up to this amount of time will be furloughed. And clearly they’re trying to put the worst face on it now to sort of sound the alarm. So I would not be at all surprised if the actual furloughs were less than what they’re talking about right now.”
The Fiscal Times’ Josh Boak and Brianna Ehley contributed to this report.