Despite new budget cuts, administration officials don't expect -- and don't want -- large-scale layoffs this year. Not only would such firings disrupt agency operations, but in many cases they could also cost more money than they would save.
Reductions in force (rif) are very expensive, particularly in their first year. Workers who are laid off take with them lump-sum annual leave payments (for unused vacation) and severance pay, which together often equal the employes' annual salaries. In addition, the government must pay unemployment benefits to laid off workers.
Agencies can make first-year savings only if they at the beginning of a fiscal year. The new budget cuts dictated by the Gramm-Rudman-Hollings Act won't be official until March 1, after which agencies must give workers up to 60 days of notification before layoffs begin. That means that most of the rifs wouldn't begin until May or June, well into the current fiscal year, which ends Sept. 30. Firing large numbers of workers so late in the fiscal year would, in many cases, raise costs, not lower them.
An equally important consideration, administration officials say, is that the White House and Office of Personnel Management don't want widespread rifs this year: They've learned how disruptive and costly the firings are and will urge agencies to go to any extreme to avoid them, opening the door to cuts in travel, overtime and hiring. Furloughs and early retirement options will be considered, with rifs the last resort, officials say.
During the first Reagan administration many federal officials considered it a macho badge of honor to see how many employes they could fire. Those days, say White House aides, are gone.
Now the word is to save money by almost any other method and to rif only when absolutely necessary. Officials who resort to mass firings run the risk of being considered incompetent managers and spendthrifts.