Spending cuts likely to trigger furloughs

Budget expert is not optimistic Congress will reach deal to avoid governmentwide cuts before deadline.

Federal agencies will have to consider furloughing employees if Congress and the White House cannot reach a deal before the end of the year to stave off the governmentwide automatic spending cuts scheduled to take effect in January 2013, according to a former top budget aide on Capitol Hill.

“I’m afraid you are going to have to be looking at furloughs,” Bill Hoagland, a longtime policy and budget adviser to former Republican Sens. Bill Frist of Tennessee and Pete Domenici of New Mexico, told an audience of federal employees during Government Executive’s Excellence in Government conference in Washington on Thursday. Hoagland said if furloughs are to occur at some agencies, managers will have to decide them wisely to avoid triggering reductions-in-force among staff, which could be costly. A furlough of more than 30 calendar days, or of more than 22 discontinuous work days, is considered a RIF, according to the Office of Personnel Management.

Hoagland, now vice president of public policy at CIGNA Corp., is not optimistic that Congress can cut a deal to avoid the spending cuts, known in budget parlance as sequestration, before the Jan. 2 deadline. Congress returns from August recess next week for a handful of legislative days when lawmakers likely will pass a continuing resolution to keep the government running through March 2013. After that, Congress won’t be back until after the Nov. 6 election, and lawmakers then will have to confront a perfect storm of policy issues, including sequestration, that will have a major effect on the economy. The 2011 Budget Control Act mandated sequestration go into effect starting in January 2013 if the bipartisan congressional super committee failed to devise a deficit reduction plan. The automatic, governmentwide cuts will total about $1.2 trillion, spread evenly from fiscal 2013 through fiscal 2021, and would be divided equally between defense and nondefense spending. The White House is required to release a report this week detailing where the spending cuts will fall across government.

Sequestration offers some protection to federal benefits, but it also could result in layoffs or furloughs at some agencies. For example, federal employees' pensions and health care are both protected under sequestration, but if a worker is laid off as a result of cuts stemming from sequestration, then the government's contributions to retirement and health care would cease. Also, furloughed workers are not guaranteed back pay; Congress decides whether to give retroactive pay. Massive across-the-board spending cuts also would adversely affect government contractors, many of whom are located in the Washington area.

“I have to be honest with you, I don’t see a solution [before the deadline],” Hoagland said. “The worst-case scenario is Thelma and Louise, we do go over the cliff.” The government is facing what officials refer to as the “fiscal cliff” at the end of 2012 and the beginning of 2013 -- a range of expiring tax cuts, sequestration and another round of negotiations over the debt ceiling.

Jim Hearn, director for federal programs and budget process at the Senate Budget Committee, said most of the energy on Capitol Hill now is focused on getting the stopgap spending measure passed to avoid a government shutdown after Sept. 30. Hearn, who used to work for Hoagland, tried to offer a slightly less bleak assessment of sequestration. “What is best and worst depends on your perspective,” Hearn said. He added automatic spending cuts would be bad for agency managers, but could be good for future generations who would benefit from less government debt and the longer-term growth spawned by fiscal belt-tightening.

Hoagland agreed with Hearn that sequestration today could help the country tomorrow, but wondered at what price -- especially since Medicare and Medicaid are exempt from the automatic spending cuts. “Will the medicine kill the patient?” he asked, adding that sequestration will be “very tough medicine.”

NEXT STORY: Roth Progress

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.