Wisdom of two-week furlough proposal is subject to debate

Legislation mandating two-week furloughs for federal workers is a poor management strategy and might not save money, according to observers.

Rep. Mike Coffman, R-Colo., on Jan. 12 introduced a bill (H.R. 270) that would require all federal employees not working in the areas of defense, public health, homeland security or law enforcement to take two weeks of mandatory unpaid leave in fiscal 2012. The legislation is one of a series of recent proposals affecting the government workforce.

"Furloughs are becoming commonplace for state and local governments, and it's only reasonable for the federal government to follow suit," Coffman said. "I want to make the U.S. government as cost conscious as the states. At least 24 states have enacted similar budget-cutting measures, while the federal government continues to grow and rack up debt."

A spokesman for the House Oversight and Government Reform committee, which could take up the legislation, declined to comment.

Coffman's bill would not require federal workers to take a single continuous two-week furlough. A number of states in recent years have begun furloughing employees on specific days, or requiring workers to take unpaid leave for a certain number of hours annually to address budget shortfalls.

For example, Wisconsin state employees are required to take eight furlough days annually between July 1, 2009, and June 30, 2011. Individual agencies can set furlough schedules and designate specific closures in addition to four statewide furlough days determined by the Office of State Employment Relations. In California, state agencies started in August 2010 closing for three Fridays each month. The mandate was adjusted in November 2010 to apply only to specific bargaining units. Those employees now are required to take three furlough days monthly through June 2011.

"There's no smart way to do it," said Max Stier, president and chief executive officer of the nonprofit Partnership for Public Service. "There are less smart ways to do it. You have to think about what are the functions that are going to have to take place anyway. Furloughs are really poor management. They're a symptom of dysfunction and not a strategic way of saving dollars."

Furlough Facts

Short-term furloughs do not adversely affect most federal benefits, such as annual leave, retirement, promotions and health insurance. According to the Office of Personnel Management, an employee has to be on "nonpay" status for at least two weeks before benefits are affected.

Workers can stay enrolled in the Federal Employees Health Benefits Program for one year after being furloughed. If an agency can't cover its premium costs, then workers might be eligible for unemployment insurance.

Employees cannot take paid leave -- scheduled or unscheduled -- on days they are furloughed. They also cannot take out loans from their Thrift Savings Plan accounts during the furlough. Depending on their job title and description, they might be able to seek other employment during this time, though conflict-of-interest and legal restrictions still apply.

Setting a Precedent

Employees affected by past federal furloughs have received retroactive pay for the days missed. The last governmentwide furlough occurred in late 1995 and early 1996, when a budget impasse kept thousands of federal employees home. Those workers eventually were repaid for the time they did not work, at a cost of $400 million.

The Transportation Department in March 2010 furloughed 2,000 employees for two days after Congress failed to enact legislation that included a short-term extension of the Highway Trust Fund. The affected workers received back pay several months later, which cost the government $1 million.

Other agencies in recent years have considered furloughs as a cost-saving measure, but congressional action kept the proposals from moving forward. The Social Security Administration in 2006 threatened 10-day furloughs for its employees, while the Defense Department in 2007 considered furloughing more than 100,000 civilian workers due to budget shortfalls.

Facing the Consequences

Employee groups have denounced Coffman's proposal, noting furloughs would have a detrimental effect on government operations and the national economy. The legislation could result in more spending, delays in federal services and a drop in employee morale, they said.

"We remain dubious based on research we have done that show furloughs actually can cost more in lost productivity, lost income from revenue-raising government services, longer wait times for services, hiring out of responsibilities to much more expensive contractors and potential losses of jobs in the private sector due to reduced spending on nonessential items from the furloughed workers," said Janet Kopenhaver, Washington representative for Federally Employed Women.

Furloughs in Wisconsin, for example, resulted in increased cost because the state had to pay overtime to employees working additional hours to make up for the days others were furloughed, Stier said. There's also a human element involved, because people have the expectation of working, making furloughs one of the least attractive mechanisms for reducing cost, he added.

"Requiring federal employees to take two weeks of unpaid leave would have a detrimental impact on the federal services and programs that millions of American taxpayers depend on each and every day," American Federation of Government Employees National President John Gage said. "Even though this proposed legislation would exempt employees in positions involving national security, law enforcement and public health and safety, every federal employee is vital to the effective operation of our government."

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