Sequestration: Is there pain beyond the Beltway?

Monday - 6/3/2013, 2:00am EDT

Washington-based experts who predicted that March would usher in the end-of-civilization-as-we-know-it appear to have miscalculated a tad: The unthinkable S (for sequester) has hit the fan. Yet most of us are still standing, if increasingly nervous.

About one in 10 federal workers has had at least one (some more) furlough days. That includes people at the Internal Revenue Service, Housing and Urban Development, Environmental Protection Agency and the Office of Management and Budget. OMB was the birthplace of the sequester plan and took a hit on behalf of the White House. Furloughs at the Federal Aviation Administration had the predicted impact: Air traffic controllers have been exempted from further furloughs. The same for meat inspections services at Agriculture. For the latest, click here.

Defense, the largest civilian federal operation, has downsized and delayed its first sequestration plan. It was originally to have started more than a month ago covering virtually all of its nearly 800,000 civilians. Now, it is down to 680,000 people and 11 furlough days. The first 30-day warning notices were delivered last week. Meantime, DoD is working for ways to reduce the number of unpaid days off.

Many people feel that sequestration is about as smart as home dentistry. Possible but not very practical or useful!

Most of the furloughs, so far, have been of the one-day-every-two-weeks variety. For the typical IRS worker that means a 20 percent cut for that week, or a 10 percent pay reduction for that upcoming pay period.

The feds-helping-feds charity, FEEA, says it is swamped with requests from nervous feds asking about no-interest loans. At the same time, some of its customers were hit by the Oklahoma tornado disaster. Loans to furloughed feds are possible, but not until after they have actually received their first check that reflects the furlough deductions. For information about FEEA loans, or to contribute to the fund, click here.

So-called experts who predicted IA (Immediate Armageddon) would follow sequestration, missed the mark, at least so far. Their fear (hope?) is that sequestration would drag down the economy in time to have an impact on the 2014 midterm elections. But according to government data, consumer spending was down "only" 2 percent in April. That's not good in a time of supposed economic recovery, but it is a long way from end-of-the-world numbers.

The Washington metro area — except for those furloughed — continues to roll along protected in its bubble of government jobs, high-tech community and tens of thousands of well-paid professional jobs, many related to the government. Roughly 40,000 jobs were created in this region since sequestration started. The reports don't indicate what kind or what they pay. Just that they are jobs, including some new federal jobs.

Washington — that is the people you elected and sent here to represent you — isn't feeling much pain. Yet. So there is little pressure on the politicians to do anything about it.

What they — and all of us here in the Beltway bubble — need to hear is what kind of pain sequestration is causing out in the real world. Places like Ogden, Utah; Huntsville, Ala.; Oklahoma City; Hampton, Va.; Duval, Orange or Dade counties in Florida; Kenton and Fayette counties in Kentucky; not to mention Maricopa County in Arizona. Places that don't immediately strike you as federal centers, but places where Uncle Sam is a primary employer. And spender.

If you live in such a federal-centric community, let us hear from you. Maybe between us we can let the power-brokers know what's really going on. Feel free to contact me, on a confidential basis if you like, at mcausey@federalnewsradio.com.

Nobody's getting any younger

There are at least two times in most our lives when we deal with the special financial challenges of aging. First when we become partial caregivers for our parents, the second time when we are the problem. Today at 10 a.m. on For Your Benefit, tax expert Bob Leins and financial planner Karen Schaeffer will tackle the tough questions surrounding actions you can take now to minimum special financial problems that come with getting older. Listen if you can or call in during the show if you like at (202) 465-3080.


NEARLY USELESS FACTOID

Compiled by Jack Moore

JCPenney is in hot water for selling a new teapot that some people think bears a resemblance to Adolf Hitler, of all people. JCPenney says any resemblance is entirely unintentional, but the furor over the Fuhrer in this tempest in a teapot has led to outrage by some politicians, including the mayor of Culver City, Calif., who said he's offended by the likeness. Still, sales have skyrocketed. The teapot is back-ordered on JCPenney's website until late June.

(Source: CNN)


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