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Agencies struggling under CR even as more cuts may be coming

Feb. 9, 2011 - 06:00AM   |  
By SEAN REILLY   |   Comments
Attorney General Eric Holder told Justice Department employees in a Jan. 21 memo there is a "realistic prospect" the department will have to operate for the entire fiscal year under last year's levels.
Attorney General Eric Holder told Justice Department employees in a Jan. 21 memo there is a "realistic prospect" the department will have to operate for the entire fiscal year under last year's levels. (Alex Wong / Getty Images)

Across government, agencies are resorting to hiring freezes, sharp curtailments of travel, training and information technology purchases, and other cost-cutting measures as they struggle to operate under a continuing resolution that holds them to last year's funding levels.

And some department heads fear the funding picture may only worsen and possibly require staff furloughs in some cases.

In a Jan. 21 memo to Justice Department employees, Attorney General Eric Holder said there is a "realistic prospect" the department will have to operate for the entire fiscal year under last year's levels. He said he hoped that halting new hires and nonessential spending will "allow us to avoid more severe future measures, such as staff furloughs."

Agencies especially hard-hit are those with expanding missions, responsibilities and workloads. The Securities and Exchange Commission, for example, faces a host of new responsibilities under the Wall Street reform bill passed last summer. That law, called the Dodd-Frank Act, requires SEC to regulate hedge fund and derivatives markets and oversee credit rating agencies.

But the CR has forced the agency to limit hiring, travel, needed IT investments and other spending.

SEC Chairwoman Mary Schapiro said in a speech last week the CR is forcing her to make difficult decisions.

"We need to ask ourselves if we want our market analysts to continue to use decades-old technology to recreate market events or to monitor trading that occurs at the speed of light," she said. "We need to ask ourselves if we want our chief securities regulator to have to pull the plug on data management systems and on a digital forensics lab needed to re-create the data that sophisticated fraudsters leave on hard drives and iPhones. We need to ask ourselves if we want to turn away the influx of market and economic experts willing to complement our existing talent and join our ranks. These are the questions we're confronting even as we implement our new responsibilities for hedge funds, derivatives and credit rating agencies."

The continuing resolution that now funds agencies at 2010 levels expires March 4. House Republicans are expected to unveil on Thursday a new spending measure that would fund government through the remainder of the fiscal year and make spending cuts totaling more than $74 billion, including $58 billion in nonsecurity discretionary spending cuts.

House Appropriations Committee Chairman Hal Rogers, R-Ky., detailed some of those proposed cuts Wednesday. Among the programs and agencies targeted for the largest cuts, as measured against the president's 2011 request:

Job training programs: $2 billion.

General Services Administration's Federal Building Fund: $1.7 billion.

Environmental Protection Agency: $1.6 billion.

Community health centers: $1.3 billion.

Office of Science: $1.1 billion.

National Institutes of Health: $1 billion.

High-speed rail: $1 billion.

Energy efficiency and renewable energy: $899 million.

Centers for Disease Control and Prevention: $755 million.

IRS: $593 million.

The proposed cuts are part of a Republican push to pare at least $32 billion in net discretionary spending.

"Make no mistake, these cuts are not low-hanging fruit," Rogers said in an accompanying news release. "These cuts are real and will impact every [congressional] district across the country including my own."

That bill will likely face resistance in the Democrat-controlled Senate, meaning that lawmakers may be forced to extend the existing CR temporarily while the two sides try to work out a deal, said Steve Ellis, vice president of Taxpayers for Common Sense. The best that most agencies can expect, he said, is that their funding won't be cut below last year's levels.

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