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Federal Eye
Posted at 01:50 PM ET, 07/25/2011

Furloughs: Federal workers often first to feel effect of a crisis

The Federal Aviation Administration’s action Saturday to furlough without pay some 4,000 employees, including about 1,000 in the Washington area, may be only the first of a series of furlough dominoes to fall.

Federal employees commonly are among the first to feel the effects when federal agencies, for whatever reason, fall short on available spending money. In the case of the FAA, the issue was the failure of Congress and the White House to reauthorize certain agency operations.

In a furlough, employees are told to stay home until further notice, although those whose jobs are deemed “excepted” or “emergency” continue working. Whether employees who were kept away from work are later paid for that time is decided in the budget process.

Lack of available money is another common cause of furloughs. Salaries make up a major part of the discretionary spending for many agencies and can be the first place for agencies to look to cut expenses, especially since many other obligations are locked in by contracts with private companies.

A large furlough threat hangs over much of the government because of the political standoff over raising the federal debt ceiling. The Treasury Department has said that the nation’s borrowing limit will be breached Aug. 2. But should that date arrive without action by political leaders, the impact on government operations remains largely unknown.

Federal employee unions have pressed the White House to clarify the status of federal workers if the threat is realized and have been frustrated over the lack of information. That is a repeat of a similar situation that arose this year when political leaders locked horns over spending for the current fiscal year, since in 2010 no budget was enacted for the entirety of fiscal 2011.

Earlier this year, a series of short-term extensions of current budget authority and then a larger agreement staved off furloughs. Just before what appeared to be an imminent partial government shutdown, the White House announced that some 800,000 of the roughly 2.1 million executive branch federal employees would have been furloughed had no agreement been reached.

The most recent widespread furlough of federal employees occurred in late 1995 and early 1996 during a similar showdown over appropriations. At that time, employees who were furloughed later were paid retroactively for their time away from work. In contrast, the general expectation earlier this year was that if the government shut down, employees would not be paid, at least not the employees who were told to stay home. The issue was never formally decided.

However, it’s unknown whether exceeding the debt limit in the days ahead would necessarily trigger furloughs. A Congressional Research Service analysis suggested that the government might remain open in that situation. Unlike when a lack of appropriations prevents agencies from taking on new spending obligations, CRS said, agencies could continue to make new obligations after the government exceeded a debt limit. That could mean requiring employees to stay at work with the promise that they will be paid at some future, undefined, date.

Also, certain agencies such as the U.S. Postal Service are self-funding and would continue operating as usual even if the government exceeded the ceiling. In addition, some federal jobs in other agencies are funded through specialty accounts that would not be affected by breaching the debt limit.

Meanwhile, any agreement tied to the lifting of the ceiling could require significant cuts in agency operating budgets. How large such cuts would be, exactly where they would fall and when they would take effect all are unknown. The current fiscal year has just two months remaining, so most, if not all, of the cuts likely would fall in the fiscal year that begins Oct. 1, and in later years.

Large-scale cuts could cause agencies to impose large-scale furloughs. At some point, agencies might even decide they need to lay off employees, which would invoke a separate process called reductions in force.

Those so-called RIFs involve a complex set of steps to decide who stays or goes, including seniority, performance, veteran status and other factors.

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By  |  01:50 PM ET, 07/25/2011

 
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