Pentagon Planners Detail 'Distasteful' Sequestration Furloughs

Calling it “the most distasteful task” of his four-year tenure, Pentagon Comptroller Robert Hale on Wednesday outlined the process for furloughing up to 750,000 civilian Defense Department employees should looming across-the-board-budget cuts take effect, hours after his department sent Congress notice that a 45-day furlough clock is now ticking.

Given the need to cut $46 billion, or 9 percent in all 2,500 Pentagon accounts if no new budget law is enacted by March 1, “we feel we don’t have any choice,” Hale told reporters. Reductions in force would be too expensive due to requirements for paying for unused vacation and severance, he added.

The budget crunch leaves Defense about 20 percent short, with operations and maintenance feeling the sharpest pain. The funding shortfall is exacerbated, Hale said, by the current budget, a continuing resolution that “puts the money in all the wrong places—too many investments and not enough for operations and maintenance.” Spending in this fiscal year has been higher than was estimated two years ago, Hale added, because of a “higher operating tempo and equipment withdrawal” in Afghanistan.

Hale joined with the Pentagon’s top personnel chief in laying out the process for furloughs, “an approach of last resort” estimated to save perhaps $4 billion to $5 billion this fiscal year. First, furloughs would be accomplished with consistency across the department. Exceptions would be limited to civilians deployed in combat zones; those who maintain safety of life and property; confirmed political appointees; and foreign nationals (numbering some 50,000 overseas, most of whom are paid by host governments). Components within the department are now at work identifying the exceptions, Hale said, and local unions are being advised.

The required notice period translates into a mid-March deadline for notifying individuals being furloughed, and they will have a week to appeal to the Merit Systems Protection Board. The one-day-a -week furloughs for up to 22 discontinuous work days would begin in late April, unless Congress and the White House “detrigger” sequestration, Hale said.

Further down the road, the department would be forced into “more far-reaching” cuts in areas such as training, which could render “two-thirds of Army combat brigades at less than acceptable readiness by the end of the year,” Hale said.

Jessica Wright, acting Defense undersecretary for personnel and readiness, said that while the impact of sequestration on “military personnel would be devastating, the impact on civilians is catastrophic.” Those employees who maintain depots, care for wounded warriors, teach and care for military families’ children and run programs to prevent sexual assault and suicide “make countless contributions in support of national defense,” she said.

“The first-, second- and third-order effect will be felt in local commands and communities. It’s not a Beltway phenomenon,” she said, noting that 80 percent of defense civilian employees work outside the Washington area. The 20 percent decrease in pay would affect business and communities and confront “many families with tough decisions,” Wright said. Life insurance, health insurance and retirement benefits would continue for all federal employees by order of the Office of Personnel Management.

In handling cuts under sequestration, her office’s main goals include preserving accreditation of the department’s schools on military bases. Planners are “thoughtfully working through” ways to ease impact on the 40 percent of military health care providers who are civilians, as well easing the burden on families on bases who may see commissary hours curtailed, Wright said. Recruiting could be affected by reduced operating hours at processing stations.

The brunt of furloughs will be felt in Virginia, Texas and California, Hale said. The remaining $40 billion in cuts needed over the next seven months would come from weapons systems and services contracts. “We don’t anticipate that we will cancel any contracts,” Hale said, though the department likely will decline to pick up all contract options. “If you’ve got a contract, we will pay you,” he said. The department is required under the law to have a detailed spending plan by April 1.

Calling the planning for sequestration “unparalleled in my experience,” Hale noted that the department has already frozen hiring and laid off between 6,000 and 7,000 temporary workers. Planning for the fiscal 2014 budget submission is delayed, and the final budget may “come in pieces,” he said. “We’re doing worst-case planning, and I am worried,” he added. “The services will see great deal of frustration because they can’t train, and satisfaction with mission adversely affected.”

The effects on readiness are tough to avoid because of “legally binding limits” on the department’s ability to reprogram appropriated funds, Hale said.

The issue of whether employees of intelligence agencies related to defense would be shielded from furloughs has not been finalized by the Office of Management and Budget and the Office of the Director of National Intelligence, Hale added.

Asked whether he regretted not having begun formal planning for sequestration earlier than January, Hale said no, adding that such projections “would have been wrong because Congress changed the deadlines, and it would have hurt morale.”

Responding to Defense Secretary Leon Panetta’s announcement of the furlough notice earlier Wednesday, American Federation of Government Employees National President J. David Cox Sr. called on Congress and the White House to come up with a solution.

“These are tremendous economic hits for all of our members,” Cox said. “An employee in the middle of the pay scale, earning about $50,000 a year, takes home between $500 and $600 a week after subtracting health insurance, retirement and taxes. Taking away one day’s pay every week could mean the difference between covering the mortgage and putting food on the table.”