OMB details widespread furloughs, cuts to agency programs under sequestration

OMB details hundreds of thousands of furloughs and cuts to nearly every agency program. Danny Werfel, OMB controller, said the effective percentage cut to each ...

The White House Friday finally laid out the potential effects of sequestration on civilian agencies.

Danny Werfel, the Office of Management and Budget controller, said the potential impact of $85 billion in across-the-board cuts starting March 1 would have “significant and harmful consequences across defense and non-defense priorities.”

Werfel said those consequences would include hundreds of thousands of furloughs across the entire government, including Justice Department federal prosecutors, food inspectors from the Agriculture Department and IRS employees who answer citizens’ calls and respond to letters.

“What happened as recently as last week, agency heads sent notices out to their broad base of employees, updating them on where things are in terms of sequester planning and did in that message indicate — unfortunately, in order to meet these budget cuts — that furloughs in many cases are a likely outcome in order to do this. That was in a broad way,” Werfel said. “Under the law, before an employee can be furloughed, they need a specific notice of their furlough with a specific amount of time, in most cases it’s 30 days. I’m not aware of any specific notices that have been issued. If we go past this date, there is no way to implement this sequester without significant furloughs of hundreds of thousands of federal employees.”

Werfel said the fiscal cliff deal in late December did lower the amount to $85 billion that agencies would have to cut from their budgets by Sept. 30, but with the shorter time frame the impact could be just as great.

“OMB now calculates that sequestration would require annual reduction of roughly 5 percent for non-Defense programs and 8 percent for Defense programs,” he said. “However given that these cuts must be achieved over only a seven-month period, instead of a 12-month period, the effective percentage reductions would be approximately 9 percent for non-Defense programs and 13 percent for Defense programs. These are large and arbitrary cuts and will have severe impacts across government.”

Cuts would run deep

The Defense Department has been sounding the alarm about the impact of sequestration over the last few months, but OMB has clamped down on civilian agency discussion.

The White House decided with three weeks left to ramp up the pressure on Congress, detailing that the cuts wouldn’t just come from top-line spending, but agencies would have to cut at the program, project and activity levels.

“The legal requirement would be that when we get to Sept. 30, the end of the fiscal year, they will have to, across government, have spent $85 billion less. And every agency will have to approach that differently,” Werfel said. “If we have the sequester order, we will be working with agencies to make sure they are doing prudent things to meet that legal responsibility. Those prudent things will help protect their mission as much as possible, but ultimately their mission will be compromised.”

The projected furloughs and programmatic cuts will come from every agency. The White House detailed some of the agency plans in a new fact sheet. The administration projects federal employees would hand out fewer grants for scientific and medical research, the equivalent of 1,000 fewer FBI agents would be fighting crime and the Social Security Administration would have to cut the hours it’s open to the public, close some offices and likely see its backlog of disability claims increase.

Werfel said sequestration would affect each agency differently. He said some would make immediate cuts, while others would make gradual reductions in spending and services.

“The numbers actually come from the federal agencies who are responsible for carrying out the programs,” he said. “So HHS, for example, helped analyze the situation and develop the HeadStart assessment. These are programmatic experts who are constantly monitoring the manner in which federal dollars go into the field and how they are impacted. They are evaluating what a very significant and sudden arbitrary cut would do.”

Reprogramming authority possible

OMB said agencies could ask Congress for reprogramming authority to help meet mission areas, but there is no guarantee lawmakers would approve the request.

“One of the things we have advised agencies in terms of taking those prudent steps is looking at ways they can manage through the sequester in the best possible way they can with the guiding principle of protect mission first,” he said. “We’ve looked at this very closely…with all the tools they have, that will not get them in any way, shape or form to a place where they can tolerate the sequester safely.”

White House officials said Congress should once again delay sequestration and work on a balanced approach that includes both spending reductions and revenue increases.

Jason Furman, the principal deputy director of the National Economic Council, said the small growth in the Gross Domestic Product during the fourth quarter of 2012 is, in part, directly related to cuts and the fear of cuts in Defense Department spending.

A blog post on Speaker of the House John Boehner (R-Ohio) asked in light of the new fact sheet, what is President Obama willing to do to stop sequestration?

“Republicans agree the sequester is the wrong way to cut spending, and agree the consequences are harmful,” the blog post stated. “That’s why Republicans have twice passed legislation to replace it with common sense cuts and reforms. But without a plan to prevent his sequester, the President is out of excuses.”


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