May 6, 2013

Regulatory agency employees dodge sequester furloughs

From: RegWatch/The Hill’s Regulation Blog

By Julian Hattem and Ben Goad

While employees at some federal agencies are already taking unpaid time off, many regulatory agencies are dodging sequestration’s cleaver.

It’s not just air traffic controllers who are escaping furloughs triggered by across-the-board spending cuts.

While employees at some federal agencies are already taking unpaid time off, those at many regulatory agencies are dodging sequestration’s cleaver.

More than two months since the sweeping across-the-board federal budget cuts first hit, and days after President Obama signed a bill to keep air traffic controllers on the job, many agencies continue to have no plans to hand out furlough notices.

The White House says that furlough rates are a result of how agencies structure their budget accounts and their use of grants and contractors.

The law forces each agency to indiscriminately cut down to the “program, project and activity” (PPA) level within each agency’s budget account.

“If a PPA is made up solely of the agency’s salaries (and doesn’t include other items within that PPA), the agency is very limited in how to achieve these  savings, and more likely to have to use furloughs,” an Office of Management and Budget official told The Hill.

“Therefore, the structure of an agency’s budget accounts, and a variety of other factors, also impact whether or not they will be forced to furlough employees to achieve the reductions in spending required under sequestration.”

Regulators at agencies like the Federal Communications Commission, the Federal Energy Regulatory Commission, the Securities and Exchange Commission, the Food and Drug Administration, the Consumer Financial Protection Bureau, the Commodity Futures Trading Commission and the Federal Trade Commission are being allowed to stay at their desks, officials told The Hill.

Officials note that even if employees get to come to work, however, agencies are pinching pennies to cope with the cuts. Regulators are cutting back on  travel and new hiring, among other areas.

“We have cuts in some contract service provided to the agency and there’s some internal belt tightening,” said Nuclear Regulatory Commission spokesman Eliot Brenner. The agency is reducing its budget by $52 million this year but not furloughing employees.

“We really have a single account so we have the flexibility to work around all the internal spending,” he added.

“Sequestration has not had a major impact on OSHA’s [the Occupational Safety and Health Administration’s] enforcement activities or personnel, and OSHA is carrying out its mission-critical activities,” added a Labor Department spokesman.

“To meet budget reductions required by sequestration, OSHA is reducing some compliance assistance activities, non-critical hiring, non-essential travel, attendance at conferences, and administrative costs.”

Banking regulators like the Federal Deposit Insurance Corporation, the Office  of the Comptroller of the Currency and Federal Reserve are exempt from the cuts.

In late April, Attorney General Eric Holder ruled out furloughs at the Department of Justice. He alluded to the role that agencies under the department’s purview, like the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives, played in the aftermath of the Boston Marathon bombing.

“The department’s mission and its employees are inextricably linked: We cannot fulfill our mission without our employees,” Holder wrote in an department-wide memo.  “And as the recent events have made clear, we need Department of Justice employees on the job to respond to emergencies and safeguard the American people.”

Other agencies, however, are suffering from the cuts.

Some of the EPA’s 17,000 workers have already begun taking furlough days. The agency expects employees will need to stay home the equivalent of 10 days.  Sequestration will also force the agency to cut back on inspecting possible polluters and assisting state and tribal governments’ clean water systems.

The budget cuts have taken an incongruous toll on the 31 federal agencies represented by the National Treasury Employees Union, according to the group’s president, Colleen M. Kelley.

“It is having a disparate impact on those agencies that were already spread too thin,” Kelley said Friday.

At the Internal Revenue Service (IRS), for example, $600 million in sequester reduction follows $305 million in budget cuts over the previous two years. Some 90,000 employees face up to seven furlough days and the agency has announced plans to shut its doors for five.

“Just imagine if you’re a victim of identity theft and you pick up the phone to call the IRS, and you get a message saying they’re closed because of  furloughs,” Kelley said.

U.S. Customs and Border Protection has also been hit hard, with some 30,000 employees told to expect up to 14 days off without pay. The agency has been understaffed for years, Kelley added, and must now find a way to absorb $700 million in new cuts.

Kelley said she does not believe the sequester was intended to hit some agencies harder than others and blamed the disparate impact on an ill-conceived plan that was never meant to come to pass.

“There wasn’t a lot of thought for how it would be implemented because no one  thought it would be,” she said.

Beth Moten, legislative and political director of the American Federation of Government Employees, the largest federal employee union, believes some agencies just aren’t trying hard enough.

“We think a lot of them who haven’t eliminated the need for furloughs yet have not probably looked as closely as they could at some of the other places that they could save money, primarily through service contracts,” she told The Hill on Friday.

On Wednesday, President Obama signed a bill granting the Federal Aviation Administration (FAA) the flexibility to move around funds and eliminate furloughs for air traffic controllers.

The FAA’s ability to rule out furloughs is causing other agencies to take a look at what they can do, according to Moten. “Once the airlines started to raise Cain, a lot of things changed.”

She added, “I think what we’ve seen is that in the last four or five weeks, different agencies are starting to figure ways out of this conundrum; other agencies are taking note.”

— Megan R. Wilson contributed to this report.

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