Four Agencies' Varied Approaches to Sequestration

Energy Department Deputy Secretary Daniel Poneman has sent letters to at least 10 governors outlining coming cuts to states partnering in programs Energy Department Deputy Secretary Daniel Poneman has sent letters to at least 10 governors outlining coming cuts to states partnering in programs Pat Sullivan/AP

Uncertainty appears to be the one constant shared by agencies grappling with sequestration, as suggested in the diverse approaches being taken by four in a sampling by Government Executive.

The president’s March 1 sequestration order, as described by the Office of Management and Budget, requires a 7.8 percent reduction in defense discretionary funding and a 5 percent cut in non-defense discretionary spending. But because these cuts must be achieved over only seven months instead of 12, the effective percentage reductions will be about 13 percent for non-exempt defense programs and 9 percent for non-exempt nondefense programs.

The precise percentage, the extent of an agency’s room to maneuver and its ability to take advantage of savings pocketed earlier in the fiscal year all depend on the nature of its mission and programs.

“Many programs will have to cut services by more than 5 percent in the remaining months of 2013,” noted Sharon Parrott, vice president for budget policy and economic opportunity at the Center for Budget and Policy Priorities. “In some programs, an assigned 5 percent cut in annual funding would require something closer to a 10 percent cut over the seven months that remain in fiscal 2013,” she said, giving a hypothetical example.

“While agencies generally were told to operate normally prior to January despite the fact that sequestration was scheduled to go into effect, some managers used their flexibility to take steps, such as postponing hiring, to save money earlier in the year,” she said. “The ability to do so differed significantly by program, depending on how funds are used and whether the agency mission requires steady expenditures during the year or allows the agency to bunch some of them in certain quarters.”

Parrott’s examples of programs that have to spend money throughout the year to continue providing benefits include the Women, Infants and Children nutrition program and federal unemployment insurance.

Entitlement programs, such as Medicare and Medicaid, are exempt under sequestration, which means largely business as usual at the Health and Human Services. “We do not have final plans or estimates of the impacts on HHS employees at this time,” said Bill Hall, director of the HHS news division. “But we continue to evaluate the situation and have made no determinations at this point as to whether we will need to implement any furloughs.”

Energy Department Deputy Secretary Daniel Poneman has sent letters to at least 10 governors outlining coming cuts to states partnering in programs, noting that the department’s overall budget will be cut by $1.9 billion in fiscal 2013. “For the state of Texas,” he wrote to Gov. Rick Perry, “the department’s preliminary analysis is that the impacts will include” direct reductions to federal contractors of $22 million, including reductions to the cybersecurity program at the Pantex plant of more than $11 million, which could result in 2,500 furloughs or layoffs at that site. “The department is reallocating money from long-term efforts to limit sequestration’s near-term impact,” Poneman wrote. “The impact of prolonged or permanent sequestration, then, would be greater than described here.”

At the Internal Revenue Service, acting Commissioner Steven T. Miller warned of a likelihood of furloughs in a Feb. 28 memo to employees. “We will continue to operate under a hiring freeze, reduce funding for grants and other expenditures, and cut costs in areas such as travel, training, facilities and supplies,” he wrote before sequestration took effect. “In addition, we will need to review contract spending to ensure only the most critical and mandatory requirements are fully funded.”

The size of the anticipated budget cut at IRS makes “a number of furlough days necessary,” Miller said. “Despite our current and planned efforts to cut expenses, the reality is that our greatest expense, by far, is employee pay.” Miller added: “We know that asking you to take even one furlough day is difficult. That’s why we’ve spent so much time and energy trying to minimize the impact on our employees as much as possible while carrying out our mission. We will continue to look for cost savings in the coming weeks and months.”

Miller also promised to engage with the National Treasury Employees Union to “ensure that any necessary furloughs are applied in a fair and appropriate manner and consistent with our collective bargaining agreements.”

Furloughs are also possible at the Housing and Urban Development Department, though no specifics have been announced. Employees were given access to a website that contains links to congressional testimony on sequestration by Secretary Shaun Donovan, as well as letters sent to 50 governors and state housing agencies.

In the letters, Donovan stressed coming cuts to individual families, including homeless veterans. He told New Hampshire Gov. Maggie Hassan, “You can expect reductions totaling approximately $5 million compared with fiscal 2012 levels for rental assistance provided through the Tenant Based Rental Assistance program; for homeless assistance and affordable housing; community development and special needs assistance provided through the HOME and Housing Opportunities for Persons with AIDS (HOPWA) formula grant programs.”

Assistant HUD Secretary Sandra Henriquez wrote state housing chiefs saying that HUD’s Public Housing Operating Fund subsidy program, because of Congress’ current budget plans, would be prorated at a lower rate, at 81 percent rather than the 92 percent, not factoring in sequestration.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.