Yogi Berra isn’t known as a federal government expert, but his “deja vu all over again” quip could describe the Obama administration’s way of keeping federal employees informed in the face of a potential government crisis.
In April, Washington was aflutter as a government shutdown seemed imminent. It was avoided at the last minute. But until late in the game, administration officials provided little information about how a shutdown would affect their employees.
Now, federal employees have questions about how a potential financial default by the government would affect them, but the Obama administration has no answers.
In a letter sent Friday to Jacob J. Lew, director of the Office of Management and Budget, and Treasury Secretary Timothy F. Geithner, more than 20 members of the Federal-Postal Coalition said, “The prospect of Congressional inaction by Aug. 2 over raising the debt ceiling is generating significant concern throughout the federal community over its impact on the continuity of government operations.”
The employee organizations asked whether government operations would continue during a financial default or be shut down; how the Civil Service Retirement and Disability Fund and the Thrift Savings Plan G Fund, a federal retirement investment vehicle, would be affected; and whether workers would be furloughed or have their wages and benefits cut.
When the Federal Diary asked the Office of Personnel Management a similar set of questions last week, it bounced the question to the Treasury Department, which bounced it to the OMB, which punted.
“We are not going to engage in hypotheticals,” an OMB spokeswoman said.
Perhaps with good reason.
The administration doesn’t have more to say, according to Rep. Chris Van Hollen (D-Md.), because it has been “100 percent focused” on trying to prevent a default. Failure to raise the debt ceiling “would be hugely disruptive to the entire economy and, of course, hugely disruptive to the federal government and federal employees,” he said.
Another reason is the administration simply may not know what would happen. “There is a lot of uncertainty in exactly what would happen,” added Van Hollen, who had been involved in debt negotiations and whose Montgomery County district is home to many federal employees and offices.
The uncertainty and lack of guidance from the administration are exactly what federal employee representatives find upsetting.
“It’s always better for employees to have a sense of continuity and a sense of how top management is going to respond to the greatest pressures of the day,” said Bruce Moyer, chairman of the coalition. “As we get closer to the prospect of a shutdown, employees need to know what contingency plans are in place that will affect how they do their jobs and whether they will be paid.”
Moyer said the coalition sent the letters because “being aware of the scant preparatory information the federal government shared with the workforce the last time we faced a shutdown, we wanted to be sure there was better preparation and communication with the federal workforce this time.”
Although the Obama administration has nothing to say about how a government default would affect federal employees, workers might take some comfort in a June Congressional Research Service report.
It quotes a 1995 statement from the Congressional Budget Office:
“Failing to raise the debt ceiling would not bring the government to a screeching halt the way that not passing appropriations bills would. Employees would not be sent home, and checks would continue to be issued. If the Treasury was low on cash, however, there could be delays in honoring checks and disruptions in the normal flow of government services.”
Actually, that provides little comfort. If there were a delay in honoring checks, how long would that be? If there were a disruption in government services, would that mean furloughs?
The one place that does have answers is the Thrift Savings Plan (TSP), which said default would have no impact on the G Fund invested in government securities. Even without action on the debt ceiling, “all of the G Fund monies would still be on account with the Treasury, and the interest which would accrue if the G Fund were fully invested would still be credited to the G Fund,” according to TSP.
William R. Dougan, president of the National Federation of Federal Employees, wants more information like that.
“People are sort of being led down the rosy path here and not being communicated with,” he said. Administration officials “don’t want people to be more upset than they already are, but I think that’s nonsense.”
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