As debt deadline nears, federal employees feel anxiety
By Joe Davidson,
Federal employees have reason to worry that the present may foreshadow the future.
Two events last Friday may give federal workers pause as the clock ticks toward next Tuesday, the deadline to raise the debt ceiling.
Nearly 4,000 Federal Aviation Authority employees, including about 1,000 in the Washington area, were furloughed because Congress could not reach an agreement that would keep them on the job. At the same time, the Social Security Administration announced it will close its field offices 30 minutes early beginning Aug. 15 because a budget cut means it can’t afford employee overtime.
Neither the FAA nor the SSA situation is directly related to the possibility that Uncle Sam won’t be able to borrow money, which could happen if an agreement to raise the debt ceiling is not reached by Aug. 2. Yet the actions by both agencies demonstrate what the nation and federal employees in particular could face if Congress and the administration cannot resolve their impasse on the debt ceiling. Agencies could be left with too little money to keep all their operations going.
Nobody seems to know for sure, or will say, what would happen. When pressed on the impact of a potential default on federal services and employees, the Obama administration says that “there is no alternative to raising the debt limit” and that “we are not going to engage in hypotheticals.” That provides little comfort to federal workers who have good reason to worry about their income and their jobs.
One worker called me Monday asking if she would get paid next Monday. The answer is yes.
The question is troubling because it reflects the kind of uncertainty that creates a nervous tremble in your gut, the additional stress and tension that no one needs.
For FAA workers, the furloughs are real.
“I’m petrified. . . . It scares me if there is no hue and cry, the politicians can continue down this road. The traveling public is not feeling the pain,” Mike MacDonald, an FAA engineer and regional vice president of the National Air Traffic Controllers Association, said of the FAA furloughs.
NATCA officials also are worried about what will happen if the government can no longer meet its obligations.
“The uncertainty is the hard part about it,” said Doug Church, a NATCA spokesman. “Not knowing what’s coming next and not being able to plan for it and deal with it.”
MacDonald is concerned that not raising the debt ceiling on time would so damage the economy that his retirement plan will lose value. “It’s scary,” he said.
The union officials have heard nothing about how a default could affect their members, but they are not critical of administration officials for providing no information.
MacDonald: “It’s uncharted territory.”
Church: “I’m not sure what they can tell us.”
There’s no comfort in a 1995 Congressional Budget Office report that says, “Failing to raise the debt ceiling would not bring the government to a screeching halt. . . . Employees would not be sent home, and checks would continue to be issued.”
That applies to the point on May 16, when additional measures were taken to get us to Aug. 2, explained Jay Powell, a visiting scholar with the Bipartisan Policy Center, which has issued a “Debt Limit Analysis.” That analysis indicates failure to raise the debt ceiling would mean Uncle Sam would not be able to pay about 50 percent of his bills.
“If you can’t pay all the bills, what are you going to do?” asked Powell. “You have to assume that there would be a real risk of significant furloughs.”
Another assumption is agencies would continue to offer buyouts and early retirement programs. Eleven agencies have received authority from the Office of Personnel Management to offer programs of that type this fiscal year. Fifteen agencies received the authority last year.
And it’s a pretty good bet that federal retirement plans could take a hit under any agreement to raise the debt ceiling.
Dan Adcock, legislative director of the National Active and Retired Federal Employees Association, said that “the federal retirement reduction package being assembled would likely require federal employees to pay more for a smaller retirement.”
“We believe the cumulative effect of the proposals being considered could severely undermine the government’s ability to attract and retain the best American employees,” he said.
The administration is right. There is no alternative to raising the debt limit.