House Majority Whip Kevin McCarthy, R-Calif.

House Majority Whip Kevin McCarthy, R-Calif. J. Scott Applewhite/AP

Lawmakers Continue to Press Pentagon on Furloughs

Legality of furloughing civilian employees at working capital funds questioned.

House lawmakers are pressing Defense Secretary Chuck Hagel to explain why the department insists on furloughing civilian employees at working capital fund units.

In separate July letters to Hagel, 23 Republicans and 11 Democrats requested a briefing from the Pentagon chief on the legality of forcing the indirectly funded Defense employees to take unpaid leave because of sequestration. The employees work at Defense entities financed through working capital funds rather than direct congressional appropriations. Since the units do not operate on direct funding from Congress, their employees should not be subject to furlough, argued the lawmakers, who count working capital fund employees among their constituents.

The members of Congress were responding to a July 5 letter from Defense Comptroller Robert Hale, who said short-term unpaid leave for WCF employees, who are indirectly funded workers, is “legal” as defined under Title 10, Section 129 of U.S. Code. The furloughs also reduce personnel costs, he said.

“Indirectly funded employees may not be subjected to constraints or limitations based on the number of such personnel who may be employed on the last day of a fiscal year, and may not be managed on the basis of man years, end strength, full-time equivalent positions or maximum number of employees,” Hale wrote, using language from the law. “They also may not be controlled under any policy of a military department secretary with respect to civilian manpower resources.” The 11-day furloughs that began on July 8 and extend through Sept. 30 do not “contradict these prohibitions,” Hale said.

The comptroller also argued that the statute directs the department to manage its civilian workforce based on the workload and on the “funds made available to the department for such fiscal year,” quoting the law. Hale said the $37 billion in fiscal 2013 budget cuts to the department mandated by sequestration are “a major cause of these furloughs, and therefore our actions satisfy the requirements of Section 129.”

The GOP letter, sent by House Majority Whip Kevin McCarthy, R-Calif., disagreed with Hale’s “rationale,” and said the decision already is taking a toll on employee morale. “We view this scenario as legally dubious and unnecessary, especially when the work performed by our civilian defense employees ensures our warfighters, who are currently in harm’s way in Afghanistan and other operational areas around the globe, are equipped with the tools they need to accomplish their mission,” stated the GOP letter.

The Democratic letter, which Rep. Derek Kilmer of Washington signed, said lawmakers were “concerned that the department’s budgetary analysis fails to address the unique nature of how these employees are funded and neglects the long-term impact that this decision will have on our national security and civilian defense workforce.” They also asked Hagel to provide them with a “greater understanding of the legal justification that interprets Section 129 of Title 10 of the U.S. Code as permitting the department to impose short-term furloughs of indirectly funded government employees.”

Defense has five working capital funds, which are revolving funds financing operations that the department runs like a business, such as weapons production and depot maintenance. Sales revenue from customers sustains the revolving funds rather than direct congressional appropriations. The department’s WCFs are designed to break even over time, not make a profit. About 177,000 civilians work in WCF units. They work all over the country, including at the Army Arsenal in Watervliet, N.Y., the Corpus Christi Army Depot in Texas, and Tinker Air Force Base in Oklahoma.

Hale in his July 5 letter said the civilian furloughs across Defense will save the department about $2 billion this fiscal year, including more than $500 million related to lower personnel expenses in working capital fund units. “These working capital fund personnel savings provide us with the flexibility to adjust maintenance funding downward to meet higher-priority needs,” Hale wrote.

Defense in May sent a memo to managers listing the types of jobs exempt from furloughs. Exempt employees include those deployed or temporarily assigned to a combat zone, Navy shipyard workers, as well as Arlington National Cemetery and Defense Civil Works program employees, along with any other employees “who are not paid directly by accounts included in the Department of Defense-Military budget are excepted from furlough.” The memo expressly said that other than Navy shipyard workers, all other depot employees “whether mission-funded or working capital fund employees, will be subject to furlough.”