President Barack Obama officially put the sequestration order into effect Friday night, as was required under the law. Agencies will now be forced to deal with $85 billion in automatic budget cuts this year.
In addition to signing the order, the Office of Management and Budget also released a sequestration report, outlining, more specifically, where cuts would come from across government agencies.
The cuts will lop about 5 percent from civilian agencies and 8 percent from the Defense Department’s top line.
So, what happens now?
Agencies prepping for cuts
Over the past few months, the Office of Management and Budget has issued a handful of guidance, directing agencies how to prepare for and implement the cuts.
OMB has already told agencies to consider cutting contract spending, freezing hiring and even implementing furloughs.
Earlier this week, OMB issued a memo on sequestration life, directing agencies to take even more specific steps to prepare for life under sequestration.
Danny Werfel, the Office of Management and Budget’s controller, told agency and department heads to exercise “increased scrutiny” on discretionary bonuses, new hiring, training, and conference and travel spending.
Agencies must also begin making decisions about which contracts and grants they need to cancel, let expire or re-scope, he wrote.
Finally, agencies must nail down specifics on employee furloughs: Which employees will be targeted? How many days will they need to be furloughed? When will notices be sent? And, when will the actual furloughs go into effect? Federal News Radio is following the latest on agency-by-agency furloughs in our Sequestration Tracker.
The Obama administration’s top leaders have painted increasingly dire pictures of how the budget cuts could lead to reduced staff levels, imperiling everything from food inspections and air-traffic safety to border patrols.
But on many of the specifics — such as just how many civilian employees will be furloughed across the federal government — there is still a great deal of uncertainty.
Even though the cuts are now upon federal workers, the administration either doesn’t know the full impact on the workforce — or isn’t saying. As of last Friday, OMB said it was still crunching the numbers as to how many non-DoD employees will face furloughs because of sequestration.
For federal employees, the most direct threat from the budget cuts is the likelihood of employee furloughs. But feds shouldn’t expect pink slips immediately.
The American Federation of Government Employees and the National Treasury Employees Union say most agencies are still in the beginning stages of negotiations.
So, early April is likely the earliest federal employees will be told to stay home without pay.
Meantime, here’s what we do know about specific agencies:
The Defense Department plans to furlough nearly all of its 780,000- member civilian workforce on a one-day-per-week basis. In addition, the military services and defense agencies have instituted civilian hiring freezes.
DoD’s furlough plan is similar to what many civilian agencies have described. Some are pursuing one-day-per-pay-period (every two weeks) furloughs, such as the Internal Revenue Service. Acting IRS Commissioner Steven Miller, in a note to staff Thursday, told employees the furlough days — likely a total of five to seven — would start in the summer after tax-filing season ends.
According to local AFGE officials, the Environmental Protection Agency, in addition to one-day-per-pay-period furloughs, is also considering a few mandatory agencywide furlough days that would effectively shut the agency down.
But not all agencies say the furloughs will affect them.
In a message to staff, the acting commissioner of the Social Security Administration, Carolyn Colvin, said by restricting hiring, limiting overtime and reducing agency travel, the agency plans to continue operating under sequestration without furloughs.
By law, VA activities and military pay are exempt from the sequester cuts.
Congress and the White House remain at odds on a sequestration solution.
President Barack Obama and congressional leaders met at the White House Friday. The meeting lasted less than one hour and both sides emerged pointing fingers at the other.
In the run-up to Friday, Democratic and Republican lawmakers introduced various alternatives to the cuts, but the measures stalled and the stalemate was expected to continue.
The White House explicitly threatened to veto a Senate proposal, introduced by Sens. James Inhofe (R-Okla.) and Pat Toomey (R-Pa.) that would still require $85 billion in discretionary budget cuts but would allow the Obama administration greater flexibility in apportioning them.
The White House said the proposal doesn’t go far enough in creating a balanced alternative to averting sequestration.
Another crisis looming
Beyond sequestration, another budget storm is brewing on the horizon. On March 27, the continuing resolution funding government operations on a short-term basis, expires. The effects of a lapse in congressional appropriations, unlike sequestration, would be felt immediately — a full-bore government shutdown.
House Republicans plan to bring a bill to the floor for a vote next week. The bill would fund the government through the end of the fiscal year while still reflecting the $85 billion in sequestration cuts.
Most civilian agencies would see their budgets frozen at fiscal 2012 levels under the House proposal. But the Pentagon and the Veterans Affairs Department would be allowed line-by-line budget increases, that would numb some of the effects of the sequestration cuts and allow funding increases for force readiness and VA health care.