How the supercommittee's failure will impact federal employees

Nov 22, 2011

With its deadline fast approaching and gridlock at hand, we've been wondering: Is it better for federal employees if the "supercommittee" fails?

Join the Post's Joe Davidson and Eric Yoder as they discuss how the supercommittee's failure to meet their mandate of shaving $1.2 trillion from the federal debt will affect federal workers. Ask questions and submit your opinions now.

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Hello everyone. This is Eric Yoder. Thanks for joining us as we delve into the pros and cons for federal emloyees of the super committee's inaction.

Hello, Joe Davidson is here and ready to chat.

How can the SuperCommittee just quit with a day to go on the deadline? Is that really who we put in charge? Holy smokes is this country in trouble.

They quit when they did because under the rules that had been set for them something had to be put out by midnight Monday so that it could be reviewed for at least 48 hours publicly before being voted on. That rule goes back to disputes in Congress over recent years about the majority party (take your pick, depending on chamber and year) bringing bills to floor votes and giving the other side no time to see what's in them. But even delaying through tomorrow woudn't have made a difference. They had hit the wall.

 So when all the cuts are made in this first year, what will be the fallout in terms of increased unemployment?

I think it's safe to say that with buyouts and possible layoffs, some federal workers will find themselves unemployed. I don't know if that will signficantly increase the unemployment rate, but it certainly won't help it.

I assume, and I am not a lefty or a righty, that this entire exercise was simply a game. No politician, be they lefty or righty, wants anything to happen until the maximum amount of damage can be done to the "other side". This is really very sad. Not one of the 535 +1 appears to have a spine. They just care about getting on TV. Is this a fair assumption?

That is a bit harsh. Certainly looking out for their own careers was a big part of this. But there did seem to be some movement among committee members toward seeing the other side's point of view, even if they couldn't bring themselves to pull the trigger and strike a deal. We've seen that over and over again this year with various types of negotiations, including the Biden talks before the debt ceiling deadline. I think the political leaders do have an appreciation of the seriousness of large annual deficits and the accumulated debt on the economy and on the country's ability to meet its commitments, and want to do something about it. It's just that they can't get there from here.

With federal budget cuts to military are the benefits due to veterans going to be cut or withheld? PTSD and suicide are among the biggest threat to our returning troops - the statistics have been staggering. Is there a SIGNIFICANT amount of money going to be available to get them into high quality programs - with encouragement to do so with having them "rejected" from the military for having suffered a common occurernce. We have never had a war this long as many prolonged tours per soldier. How decimated do the projections see in loss of active military fit to deploy? Will medical and mental health treatment come out of the military budget, or will it further tax the Medicare system? If thee soldiers become mentally disabled, who takes care of them, do they remain military with full benefits for treatment? Will they get a choice of providers VA or civilian?

Several points to make about the prospects of sequestration.

One, it won't happen at all if Congress and the White House come up with deficit reduction steps sufficient to find the $1.2 trillion the supercommittee was tasked with finding. They have an entire year to do that, since the cuts won't take effect until January 2013. The reason the supercommittee was the best hope was that the law created a privileged way of considering their recommendations--guaranteed floor votes within a month, no filibusters or amendments allowed. Gaining enactment through the regular legislative process is more difficult, as we have seen repeatedly, but is not impossible.

Second, sequestration applies only to discretionary spending, which makes up about 40 percent of the federal budget. The rest is mandatory spending, involving things like Social Security and veterans benefits, plus interest on the existing debt. Even within the discretionary category, there are various programs that are fully exempt, and some that are partially exempt in that cuts of only a certain percent can be applied to them. The best explanation of all this is in CBO's testimony from October to the supercommittee, which is on the home page at www.cbo.gov.

If the Republicans win the White House and big majorities and in the House and Senate, as many are predicting, how likely is it that entire department's will be eliminated? I've heard some Republican politicians remark that about the only department they'd like to see standing is Defense.

I think there would be calls from Republicans to eliminate some departments, but that would be easier said than done, even if the GOP takes both chambers and the WH. I would not be surprised if they did not  eliminate any department. That's would be a very complicated thing to do.

I understand that if I want to buy a house, I will go into debt. If I want to buy a car, I will go into debt. If I want to send a student to college, we will go into debt. Debt is part of life, but when going into debt, it is only proper to have a plan to get out of debt. Federal, State, and Local governments all seem to rely on loans/debt. I don't think it should come as a surprise to anyone that some day these government agencies would be asked to pay back their debts. How can we change the model so debt is NOT the normal way to operate? Are taxes the only way the Government has to bring in the money needed to pay its debts? In theory, the Postal Service is supposed to operate on income from the sale of stamps. Can more government agencies find ways to support their operations by offering its services for a fee?

Lots of government agencies besides the IRS bring in revenue. There are customs duties, filing and maintenance fees for patents, admission fees to national parks, natural resource extraction royalties, livestock grazing fees and on and on. Certainly these could be raised--the admission fee to national parks is one of the biggest bargains in existence, in my opinion. But the question is whether these would bring in anywhere near the kind of money needed. That's more in the category of every little bit helps.

The postal service did structure its fees to be self-funding but the decline in mail revenue, plus the restrictions it operates under (a long outside review period for doing things like raising rates and closing facilities or switching to fewer delivery days) have combined to produce severe deficits in recent years.

Will there be a hiring freeze?

Hiring has already slowed in the federal government. I don't know if there will be a government wide hiring freeze, but that could happen in some agencies.

Since every budget issue recently has come down to the last minute prior to any action being taken, when can we expect agencies to start laying off Federal workers in anticipation of the cuts taking effect in 2013?

It's hard to answer your question directly. Some agencies have already started the buyout process with employees and I would think that some managers must be thinking about layoffs now.  But the agencies don't know yet just what their budgets will be so it's hard for them to make definite plans. And that makes it hard to say when the layoffs might begin.

Are the pensions really on the table? Will Congress be included in this pay freeze and pension cuts?

The main thing that was before the supercommittee on retirement was the idea of increasing employee contributions. That has been under more or less active consideration for nearly a year, since the Simpson-Bowles report. It's pretty safe to say that one will reappear, and possibly soon. Changing to a high-5 benefit computation base also has been circulating and the same can be said of that.

Congress already is affected by the pay freeze. Congressional raises are set under a different formula than federal raises, but there is a provision in the law stating that Congress can't get a larger raise than the GS base increase. So, when there is no GS base increase as in 2011 and 2012, there is no raise for Congress. Congress also has commonly refused raises for itself in years when a GS raise has been paid.

Members of Congress also would be affected by any changes in the retirement benefits formula, since they are under the same retirement systems as feds. There are some minor differences in that members pay more and get enhanced benefits, in the same way that certain categories of feds such as law enforcement officers pay more and get more. In both cases, the underlying principle is that careers will be shorter. Of course, with some members of Congress, that clearly isn't the case.

Good afternoon: Any idea how potential cuts will affect federal education programs? Thank you.

Still too early to tell.

Is there an assessment anywhere that discusses where, as specifically as possible, where the cuts will be? Which agencies, etc.?

I don't know of any such assessment, but if you learn of one please let me know.

When do you think DOJ will lift its hiring freeze? Several components at Main Justice and United States Attorneys' Offices are woefully understaffed with attorneys. This means that federal crimes - from drugs, immigration to complex white collar crimes - are going uninvestigated and ultimately not prosecuted.

I don't know when DOJ will lift its hiring freeze. At this point it looks like things will get worse before they get better.

Hi Eric and Joe: How is the Supercommittee's failure to act going to impact new government workers? My agency (Army) recently converted a lot of contractors to civil service and now it looks like we may have brought them on just to fire them.

Yikes! If there are RIFs (reduction in force) those people very likely will be the first to go since seniority is such an important part. But it's probably too early to reach that conclusion. First, you can't know yet exactly how all this will play out on either the larger level or the individual program level. Second, agencies avoid RIFs if at all possible because they are disruptive and expensive. With about a quarter of feds already eligible for retirement, agencies most likely will first look to natural attrition, probably goaded by buyout incentives and early retirement offers for those who are close to retirement eligibility but not quite there. Agencies already are doing that and it's reasonable to expect more.

I'm working as a Project Engineer for large Facilities Projects. Do you think cuts may decrease the programs they have? Would my job be subject to RIFs?

I wish I could answer your question directly, but at this point not even your agency may know the answer.

While the Federal Government directly and indirectly supports millions of families who have one or more person who works for the Federal Government or one of the many companies that provides contractors to the government, it seems clear that the government cannot continue to do everything it does today without increasing its income. The government would need to cut out 10,000 jobs to save one billion dollars/year. That seems like a great number of people who would suddenly become unemployed. Can the savings just come from cutting back on travel, office supplies, government vehicles, etc. or does it have to involve cutting out people and programs.

Unfortunately, I think it involvles cutting people and programs.

As a mid-30s employees with 8 years of federal service (Hill and Agency) such retirements would not be a brain drain. Older employees cannot compete in the technological era we are in. I send my managers a document to review, they print it out and send back a hard copy with redline edits. They ask attorneys to make copies, they send emails asking us to send an email (instead of using the cc) or they call us into their office to help them with the travel website. One of the worst examples I can give you is a woman who sends the body of her emails below her signature line...so it appears in a preview panel as a blank email. That said, I started under a three year retirement calculation and if they try to change it, I will leave federal service to find a private sector position. I'm paid 1/3rd of what private attorneys make...it's less and less worth serving the public.

Rather than practice law, it sounds like you could have a nice second career as the writer for the Dilbert strip.

But your last line is telling. Serving the public is indeed a motivation (to a lesser extent in some cases, granted) for federal employees. At some point, though, that doesn't feed the bulldog.

Federal workers will still have jobs, still have benefits, still have retirement (even if negligbly smaller). Workers in the private sector are the ones who have lost, have lost jobs, and then the new jobs they thought would at least last a year, have lost benefits, have lost respect. It's Thanksgiving, and federal workers need to think about what they have.

I'm sure they do, but, understandably, they still don't want to have their pay or benefits cuts or their jobs eliminated.

Do you think there will be widespread federal layoffs in the coming years? I am currently trying to decide whether to stay in a federal job or return to the non-profit sector where I used to work.

See my response above regarding layoffs. It's always wise to keep your resume current and keep your contacts current.

What options do you see for DOD and agency leaders to cut to meet these numbers? Increased TRICARE fees and employee health care contributions? RIFs? My agency is mandating that we print on both sides of the paper - some big savings there? When do we mothball carriers and cancel weapons programs?

There are a range of options, including consolidating or cutting programs, early retirement buyouts and a range of other things. It's too early to say just what will be done.

I don't get Obama. He nearly lets government shut down in the spring because he says month to month is no way to run a government. Hello, what have we been doing since then? We're ok till mid Nov then mid Dec. When will it end?

It won't end soon enough.

I heard something about them getting rid of FERS altogether for folks that hadn't been with the federal government more than five years. Do you think that will happen?

That was one of the options raised by Rep. Issa in his recommendations to the supercommittee. Basically, he would close out FERS. Current retirees would continue to get what they are getting, current employees would get, on retirement, what they have accumulated to the point of the change, and then only an enhanced defined contribution plan from that point on. Newly hired employees after the transition point would get only the defined contribution plan.

That would be a very major change in federal retirement policy and as such seems pretty unlikely. Certainly it's hard to see President Obama consenting to it, or pretty much any Democrat. Certainly the employee and retiree organizations would fight it for all they are worth. It hasn't even had a hearing.

Thanks for joining us today. See you in a future chat.

Thank you for all your comments and questions and stay tuned to the Federal Diary for the latest news concerning the federal workforce.

In This Chat
Joe Davidson
Joe Davidson is the Federal Diary columnist at The Washington Post. For 13 years he was a Washington and foreign correspondent with The Wall Street Journal. Before joining The Post, he was editor of FOCUS, the magazine of the Joint Center for Political and Economic Studies. As the Federal Diary columnist, Joe covers a variety of issues related to federal employees and the federal workplace, a core area of coverage for The Post. Before writing the column, he was an assistant city editor.
Eric Yoder
Eric Yoder is an an award-winning writer and covers the federal government for the Washington Post. Yoder is co-author of "One Minute Mysteries: 65 Short Mysteries You Solve with Science!" and "One Minute Mysteries: 65 Short Mysteries You Solve with Math!"
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