OMB offers agencies sequestration guidance as deadline looms

Thursday - 12/20/2012, 3:22pm EST

With fiscal-cliff negotiations coming down to the wire, the Obama administration has sought to reassure agency leaders and federal-employee unions that sequestration — the across-the-board budget cuts set to take effect in January — won't have an immediate impact on the federal workforce or government operations.

John Berry, the director of the Office of Personnel Management, and Danny Werfel, the controller of the Office of Management and Budget, told unions that they do not believe day-to-day operations would change dramatically after Jan. 2 — even if sequestration goes into effect.

OMB: Not like a government shutdown

Berry and Werfel stressed that sequestration would be unlike a government shutdown because budget reductions would not be immediate.

"These cuts, while significant and harmful to our collective mission as an agency, would not necessarily require immediate reductions in spending," an OMB fact sheet sent to agency managers and unions Thursday morning stated. "Under sequestration, we would still have funds available after Jan. 2, but our overall funding for the remainder of the year would be reduced

While furloughs of federal employees would remain on the table if sequestration continues for an extended period of time, the fact sheet stated OMB "will not be executing any immediate personnel actions, such as furloughs" on or immediately after Jan. 2.

OMB told the unions that furloughs would only come after other possible possible savings had been exhausted.

No detailed plans till January

OMB officials also held a call Thursday with government officials to discuss agency expectations if sequestration takes place.

"OMB told us they will not be expecting anything from us until January in regards to the sequestration process and where the potential cuts to spending would happen," a government official, who requested anonymity because of the sensitive nature of the discussions, said. "There was a rumor OMB would want details before Christmas, but they said there isn't an immediate need and they are still working with Congress to find a solution."

The source also said their agency already has told some of its larger contractors that if sequestration happens, some of the firm fixed-price contracts would have to be reduced.

OMB cleared agencies to begin disseminating guidance to their employees Thursday morning, according to an email Werfel sent to agency managers obtained by Federal News Radio.

"Agencies are not required to begin broad-based communications with employees on this issue," Werfel said, but he encouraged agencies to use an OMB-approved template and to reach out to federal unions if they did so.

So far, a number of agencies have issued their employees the guidance, including the Social Security Administration, the Commerce Department and the Defense Department — all hewing closely to OMB's recommended template.

Unions seek action

Federal unions said they appreciated the administration's efforts to keep employees informed.

"Robust communication and involvement in this process will be critical in keeping our workforce informed," William Dougan, president of the National Federal of Federal Employees, said in a statement. "The real issue here, however, is not words, but the actions our elected leaders take in the coming days and weeks."

Dougan called for an alternative to the sequestration cuts that wouldn't unfairly target federal employees.

Jacqueline Simon, public policy director for the American Federal of Government Employees, told Federal News Radio one of the union's top priorities is to "stop any deal that's worse than sequestration," such as cuts to employee compensation.

The House is set to vote Thursday on a bill that would avert Defense budget cuts by requiring federal employees to kick in an extra 5 percent toward their pensions starting in 2013. But the bill, which mirrors a similar House bill approved last spring, is likely dead-on-arrival in the Senate.

"What's happening is part of good governance and it is the responsibility of OMB to give these notifications," White House Press Secretary Jay Carney said during a press briefing Thursday. "We remain, as I've been discussing, focused on reaching agreement on a balanced deficit reduction plan that prevents us from going over the fiscal cliff and avoids sequestration. And we believe even now that that agreement is within reach if there is a partner with whom to agree."

Carney added that with two weeks remaining before sequestration takes effect, in the event an agreement is not reached, OMB is taking steps to ensure that the administration is making preparations to issue an order to agencies if one is needed.

"So, this is simply the responsible thing to do," he said. "It should not be read as predictive of any outcome. If we were five minutes away from achieving a deal, it would still be the responsible thing to do."

(Federal News Radio Executive Editor Jason Miller contributed to this report)