Why can’t all agencies avoid sequestration furloughs?

February 28, 2013

Some federal agencies appear to be better-positioned than others to avoid furloughs, which are likely to happen unless Congress and the president reach a deal to avert the automatic budget cuts set to kick in Friday.

The Government Accountability Office, the Small Business Administration, the Smithsonian Institution and the U.S. Agency for International Development have all said they expect to meet their cost-saving targets without resorting to unpaid leave.

So how have those agencies managed to avoid the likelihood of furloughs while others have not?

Some union leaders and lawmakers, especially Republicans, say planners just have to put their minds to it. But many experts who study federal budgets have said other factors come into play.

“Agencies have enormous discretion in this regard, but some are so predominantly personnel-driven that they have little choice but to furlough,” said Patrick Lester, director of fiscal policy for the Center for Effective Government.

Indeed, the Pentagon, Department of Homeland Security and Federal Aviation Administration have said in recent weeks that they expect furloughs to be necessary under sequestration — as the budget cuts are called — and all dedicate a relatively high percentage of their budgets toward pay and benefits.

Lester said agencies that rely heavily on grants and contracting are less likely to depend on unpaid leave to meet their reduction targets. “They have the ability to push the cuts into their contracts — they can delay them,” he said.

Most agencies don’t fall neatly into the contract- and personnel-heavy categories, leaving virtually every government entity that says it might resort to furloughs susceptible to criticism.

Conservatives have challenged agencies to identify and trim more waste, while union leaders have repeatedly urged them to reduce spending on private contractors — even pressing Congress to pass legislation to that effect.

John J. O’Grady, president of a Chicago-region chapter of the American Federation of Government Employees, said agency leaders “really haven’t done their homework. They were under the illusion that [the sequester] wasn’t really going to happen.”

O’Grady said that most agencies haven’t yet maximized reductions in contractor spending, and he noted that some have provided five-figure bonuses to managers during the past fiscal year despite the looming cuts.

The White House budget office contends that rigid sequester rules have left little room for agencies to avoid furloughs.

“Sequestration was never designed to be flexible,” said a White House official not authorized to talk about the matter on the record. “It was designed to force a compromise.”

As for the GAO, which has just 2,900 workers, Comptroller Gene L. Dodaro sent a memo to employees last week saying the agency could probably meet its sequester target by halting new hires, trimming travel expenditures and reducing IT investments.

“We project that we would no longer require furloughs at GAO to absorb the potential reduction associated with sequestration,” Dodaro said.

Similarly, the SBA has said that it reduced staffing levels enough through early retirements to avoid furloughs and that the agency expects to meet demand for its small business loans moving forward, according to the Associated Press.

“We are not slowing down giving loans to anyone,” SBA Administrator Karen Mills told reporters last week, noting that the agency anticipates a sharp decline in demand for the 504 loans that spiked last year because of a now-expired provision that allowed the funds to be used for refinancing mortgages.

Smithsonian Institution spokeswoman Linda St. Thomas said on Wednesday that the museum operator anticipated the sequester would happen and budgeted “very, very conservatively” since the start of the fiscal year.

Like other agencies, the Smithsonian Institution has delayed maintenance and repairs, adjusted contracts, and reduced staff travel and training to help achieve its target savings, St. Thomas said.

Two-thirds of the organization’s roughly 6,000 workers are federal employees; the rest work for the independent Smithsonian trust fund. But St. Thomas said the institution does not expect to use furloughs for any of its personnel if the sequester takes effect.

USAID said in an agency notice to employees last week that it does not intend to furlough workers this year and instead anticipates meeting its reduction targets by halting new hires, modifying contracts and cutting planned IT investments.

Congressional leaders are set to meet with President Obama at the White House on Friday to discuss replacing the sequester.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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