Why the government isn't ready for sequestration

As sequestration looms increasingly large on the horizon, Washington remains paralyzed, at least for the moment: Congress is out, agencies have received little or no guidance on cutting spending and a number of deadlines – including those for notifying employees of impending job cuts – are rapidly approaching. With so many different factors involved and so much at stake, what does it mean for the agencies and companies who face impact?

So far, government decision-makers have given agencies and private companies little to work with. One reason is that leadership is looking to Congress to make an eleventh-hour decision that would avert sequestration. Another, according to one source, is because there are many ways the cuts can be implemented – and the timing is tricky.

“We’re so far away from actual decision-making that the speculation of the how-to-be-implemented gets really dicey and problematic,” said Alan Chvotkin, executive vice president and counsel at the Professional Services Council. “There are lots of options, any one of which can be more harmful than the others.”

At the Defense Department, which would be among the hardest hit by the budget cuts, officials have also said planning too early or too late could have a devastating effect on national defense. In August, DOD Deputy Secretary Ashton Carter indicated no preparations are under way.

“While we can foresee the harmful impacts of sequester, as I have described, we cannot devise a ‘plan’ that eliminates, or even substantially mitigates them. Sequester defies rational ‘planning.’ It was designed to be irrational,” Carter testified before the House Armed Services Committee. “We are working with [the Office for Management and Budget] to understand this complex legislation, and we are assessing impacts.”

An Aug. 24 report from the Center for Strategic and Budgetary Assessments indicates that DOD could shed as many as 108,000 civilian jobs in 2013 as a result of sequestration, while defense contractors avoid immediate effects.

Chvotkin said those losses are possible, if leadership decides to go that route in implementing the roughly 10 percent cuts to fiscal 2013 budget resources. But with little guidance from Congress or the White House -- although a recent memo from OMB Acting Director Jeffrey Zients did advise agencies to begin 'discussions' -- so far, it’s not clear which of the many options in the vaguely defined legislation will be exercised.

“The cuts are at the program, project and activity level. All the Budget Control Act [which enacted sequestration] requires is to reduce budget resources by the given mathematical percentage,” Chvotkin said. “How a program office achieves that reduction is up to them – they could, for example, reduce the size of program offices, reduce the scope of contracts, defer spending on contracts or push work from current fiscal year into fiscal 2014, which will have different guidelines.”

That means the contracting community isn’t immune to near-term losses caused by sequestration. According to Chvotkin, the defense contracting community is already being affected as the budget ax swings through the Pentagon, and it’s just the beginning.

“We are already seeing effects, irrespective of sequestration, reducing the amount of spending on services contracts. Some have been imposed on DOD and other agencies by OMB to reduce spending on services, so we’ve seen that impact already,” he said. “But we are still weeks, if not months, from knowing how DOD will implement a sequestration that nobody wants to have.”

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Reader comments

Wed, Sep 12, 2012

To the poster of "Standard Democrat response": Recommend you check your facts. The Democrats have not been in control of most of the congress and POTUS for the last 5 1/2 years. The Republicans controlled both houses of congress from January 1995 - June 2001 and January 2003 - January 2007, the presidency from January 2001-January 2009, and the House of Representatives from January 2011 - present. Further, it was only after James Jeffords (R-VT) switched to independent on May 24, 2001, effective June 6, 2001, stating he would caucus with the Democrats, that the Democrats gained a one-seat advantage in the Senate from June 2001 – January 2003 (19 mo).

The point being, the Democrats only controlled both houses of congress for 24 months (Jan 2009-Jan 2011). And, as publically stated in December 2008 by incoming Republican members of Congress, their intention was to use every means at their disposal to prevent the passage of any budget by Congress until Republicans were again in charge of Congress and the Presidency.

So, again, for those who hold up the inability of a Democrat majority to pass a budget (and any others who like to fault the Dems for the current debacle), it must be noted that the Democrats only held the majority in Congress for 24 months, and that majority was not large enough to prevent Republican filibuster or use of Congressional rules to keep legislation off the floor or both houses of Congress.

Wed, Aug 29, 2012

IMHO – The decision makers being discussed are Purple Book Employees which are only transient OPM OPM approved employees that were approved for inclusion by the current head / designated representative of the Executive Branch, and should not be considered a part of the career Government work force that is eagerly awaiting their guidance. Regardless of what is being said, every Department and Agency has been developing, and will continue to refine, their respective contingency Plans for responding to the forthcoming program and personnel cuts. Falls right into the hands of those that have worked so hard to contract out most of the Executive Branch of Government.

Wed, Aug 29, 2012

To cut Federal jobs instead of contractors is rediculous. Contractors cost on average 1.83 times what an equivalant Fed costs with benefits. Hire the contractors as Feds and you could probably save billions.

Wed, Aug 29, 2012 Mike

Federal employees are .47 percent of the Nation's employees (excluding Active Duty Military and Postal); (less than half of 1% of the Nation). The entire Nation needs to share in the burden! Catch tax evaders, freeloaders, etc. Make law-breakers pay their dues. The Federal Income Tax system is there for a reason: fair taxation based on level of income. Stop hammering the Feds!!

Tue, Aug 28, 2012 Bill

@"The fault lies primarily..." Remember that neither the 2009 or 2010 solid majority Democrat House/Senate could get a budget that the president would sign. That's the sign of a poor leader or an inept left wing congress. Or both. How in the HECK could there not have been a budget passed when both the legislative and executive branches of govt were heavily democrat? This president can't even work with his own party.

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