Threat of sequestration takes a toll on employee productivity

With few signs that Congress and the White House are close to a new budget deal, agency employees continue to plan reluctantly for across-the-board spending cuts, leaving vacancies unfilled and drawing up springtime furlough schedules, according to observers.

“Agencies are scrambling, and there’s nothing pretty about what they’re trying to do,” said Max Stier, president and chief executive officer of the nonprofit Partnership for Public Service. “With all the uncertainty, things are frozen in place, and there are hiring freezes everywhere.”

At the Justice Department, for example, staff sizes are down, “but they’re not hiring because they don’t want to be in a position of laying off people they just hired,” Stier said. “Across the board, this has a negative impact detrimental to the long-term goal of having government operate more effectively and efficiently.”

Inside the Defense Department, employees “have been told to prepare for a 22-day furlough, starting in April, one day a week, or two days per pay period,” said an employee who spoke on condition of anonymity. “At least some people have had their alternative work schedule days canceled. Most of the work being done is in preparation for sequestration. In other words, current workloads are being threatened because employees are being told to focus on preparing for sequestration.”

Contingency planning for April-though-September furloughs was confirmed on Friday by Deputy Defense Secretary Ashton B. Carter, who told reporters the move might save $5 billion. Carter also noted that the Pentagon is “stuck with” last year’s budget “category by category” until the current continuing resolution expires on March 27, more than three weeks after the March 1 deadline for avoiding sequestration under the new tax law enacted Jan. 2.

Even if the sequestration law’s mandatory cuts of just under 9 percent are headed off, other cuts would likely be part of any new fiscal deal.

Preparing for this confluence of events requires a delicate balance between acting too early and planning too late, Carter said Sunday in a television interview on This Week in Defense News with Vago Muradian. “The reason not to make adjustments too early is these are not desirable things to do,” he said. “They're not good for defense, so you don't want to do them until you have to.”

The department normally hires some 1,000 people each week to maintain stable levels of personnel, Carter said. But “if I worry that I'm going to run short of money later in the fiscal year, I’d better stop hiring.” Pentagon managers have “been doing that quietly,” he said, “because we haven't wanted to act as though sequestration or any of these things was either inevitable or, certainly, something that we could manage with ease. These are damaging, destructive things to do.”

At the Library of Congress, planning for budget cuts is also proceeding. “Without firm budget numbers, it is not possible to make definite plans--nor is it wise to speculate--but the library is planning for various scenarios,” said spokeswoman Gayle Osterberg.

Employee unions, meanwhile, are equally displeased with the fiscal stalemate. The National Treasury Employees Union has had “very preliminary discussions with agencies” such as the Internal Revenue Service and Customs and Border Protection, National President Colleen Kelley said in an email to Government Executive. Though they’ve heard no specifics, “It is hard to imagine that cuts of this size could take place without requiring some personnel actions, such as furloughs. Prior to the [January] fiscal cliff deal, NTEU had initiated discussions with agencies on their plans, but when the date changed those discussions became more general,” she said.

Before taking personnel actions, agencies should “first examine government contracts and look to make cuts in those programs,” Kelley added. “We will urge agencies to look for other cost-cutting measures that can be taken before considering such actions as furloughs and buyouts. One furlough day is one too many.”

J. David Cox, national president of the American Federation of Government Employees, on Tuesday reiterated a call for the government to cap taxpayer reimbursements for contractor salaries, warning in a statement that “allowing agencies to fall off the fiscal cliff by failing to stop sequestration would drastically hinder their ability to continue providing vital services to the American people.” AFGE argued some $50 billion of what sequestration would cost agencies over 10 years could be offset by capping the contractor compensation reimbursement rate at $200,000. Such a cap was passed by the Senate last year, but was dropped in the final version of the defense authorization bill. “Contractor employees who could not bear to make the same sacrifices that federal employees have been making for years,” Cox said, “could always ask their employers to supplement their compensation out of corporate profits.”