WASHINGTON — With automatic budget cuts looming in just over a week, Defense Secretary Leon Panetta on Wednesday notified Congress of a plan to furlough nearly 800,000 civilian employees one day each week beginning in April.
Work days and pay will be cut if Congress does not find a way to avert budget cuts known as “sequestration,” which are scheduled to kick in March 1 and remove $500 billion from the Pentagon budget over the coming decade.
The furlough, which can legally begin 45 days after the notification to Congress, would save $4 billion to $5 billion, DOD Comptroller Robert Hale said Wednesday.
The threat of such deep cuts was instituted on Capitol Hill to spur a deal to rein in the federal deficit, but a bitterly divided Congress has been unable to work out a compromise across partisan lines.
Sequestration threatens to impact long-term military readiness by potentially cutting operations, training and weapons buys, commanders have said with increasing urgency in recent days. It threatens military and civilian DOD personnel as well, said Jessica L. Wright, acting undersecretary of personnel and readiness.
“The effects of sequestration and the continuing resolution on our military personnel will be devastating, but on our civilians it will be catastrophic,” she said.
DOD has little flexibility to head off the 20 percent pay cut and other effects civilians would have to endure under sequestration, Panetta told Pentagon employees in a written statement.
“We are doing everything possible to limit the worst effects on DOD personnel – but I regret that our flexibility within the law is extremely limited,” Panetta said. “As a result, should sequestration occur and continue for a substantial period, DOD will be forced to place the vast majority of its civilian workforce on administrative furlough."
Pentagon officials said that if sequestration is not averted, they would notify civilians in late March of impending furloughs. Based on guidance from the Pentagon and the U.S. Office of Personnel Management, here’s what sequestration could mean to hundreds of thousands of DOD employees worldwide:
Q: Who’s subject to furloughs?
A: All DOD civilians except for those deemed exempt for the protection of life or property, certain high-ranking political appointees and those whose pay come from sources other than Congressional appropriations. Thousands of DOD intelligence workers may be deemed exempt as well, a decision being mulled over by the Office of the Director of National Intelligence, Pentagon officials say.
Q: What about the troops?
A: By presidential order, military personnel are exempt from furloughs brought on by sequestration.
Q: I’m a civilian working downrange. Will I be furloughed?
A: No one working in war zones will be furloughed.
Q: When will furloughs start?
A: If sequestration is not averted, employees will begin losing one workday a week in late April, continuing through the end of the fiscal year on Sept. 30, totaling 22 days.
Q: How do I know what days I’ll be furloughed?
A: Your bosses will make the call. Agencies and offices will schedule furlough days to create minimum impact on operations.
Q: How do I know if I’m an “essential employee”?
A: Unlike past planning for government shutdowns, no one is automatically deemed “essential.” Military branches and agencies must submit lists of proposed exempt workers who must stay on the job to preserve life or property by March 1. Pentagon leaders will make decisions soon after that. Individual employees will be notified of furloughs in April and have one week to appeal.
Q: What if I’m an emergency worker or first responder?
A: You might be furloughed. To save money, agencies will exempt the minimum number of staffers needed to protect life and property.
Q: What about my children’s teachers and school staff?
A: They are not exempt from furloughs. The Department of Defense Education Activity is scrambling to develop plans to prevent learning disruptions in potentially understaffed schools and to protect schools’ accreditation.
Q: How will the furlough affect my pay?
A: You will not be paid for furloughed days, and lost pay cannot be recouped, as it was after government shutdowns in the past.
Q: Will furloughs at DFAS hold up paychecks?
A: While employees at Defense Financing and Accounting Services can be furloughed, the Pentagon says the agency will continue processing pay as usual.
Q: What about leave accrual?
A: While working four days a week during the furlough period, you will accrue annual and sick leave more slowly than usual.
Q: Can I use accrued leave time on furlough days to prevent income loss?
Q: Can I apply for unemployment compensation on furlough days?
A: Probably not. DOD worked out the one-day-a-week plan in part to prevent employees in any state from filing for unemployment, which comes out of DOD’s budget.
Q: How will this affect retirement contributions?
A: If you contribute a percentage of your pay, the same percentage will continue to be withheld, resulting in a smaller contribution. If you are in a Thrift Savings Plan and contribute a set dollar amount, the same amount will continue to be withheld. In either case, the employer match would continue as before.
Q: Do I lose health coverage on furlough days?
A: No. However, furloughs of some medical employees could cause delays and cancellations at military health facilities, particularly for civilians, because military members’ health care must remain unaffected by sequestration.
Q: As a DOD civilian working overseas, will housing or post allowances be cut?
A: No, there would be no effect until after 14 consecutive days of furlough, which won’t happen under the current plan.
Q: Will the furlough affect my Social Security work credits or eventual monthly payment at retirement?
A: It would probably not affect Social Security credits, because maximum yearly credits require less than $5,000 income to earn. But because Social Security retirement benefits are calculated based on yearly earnings, the furlough could have a marginal impact.
Q: Are there any tax deductions or credits to help furloughed government employees?
A: None at this time.
Q: What if I need to borrow from my retirement savings account to help make up for lost income?
A: DOD says it does not manage retirement accounts. Presumably, however, early withdrawals could result in penalties, unless, for example, they’re taken in the form of a 401k loan and paid back on time.
Q: I’ve got a project due. Can I telecommute on furlough days?
A: No, furloughed employees are forbidden from any work at all — even reading emails. During government shutdowns in the past, DOD collected gear like computers that could be used for work purposes, although it is not clear that would be done this year if furloughs are imposed. You and your boss will have to work it out.