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Failure to reach deficit deal could mean extended pay freeze, layoffs for feds

Nov. 21, 2011 - 09:48PM   |  
By STEPHEN LOSEY   |   Comments
House Minority Whip Rep. Steny Hoyer, D-Md., speaks during a news conference Nov. 16 in Washington, D.C.
House Minority Whip Rep. Steny Hoyer, D-Md., speaks during a news conference Nov. 16 in Washington, D.C. (Alex Wong / Getty Images)

Federal employees' pay scale freeze could be extended and some feds could be laid off as a result of the congressional supercommittee's failure to reach a deficit reduction deal, House Democratic Whip Steny Hoyer said Monday.

Under the so-called sequestration process triggered by the supercommittee's collapse, agencies must cut $1.2 trillion from their budgets over 10 years. Talks broke down over taxes, and the supercommittee's co-chairmen, Rep. Jeb Hensarling, R-Texas, and Sen. Patty Murray, D-Wash., conceded defeat in a statement posted online.

"After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee's deadline," they said. "Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve."

In a lunch meeting with reporters earlier in the day, Hoyer said sequestration makes it more likely, though not certain, that Congress will extend the current two-year freeze. Hoyer said agencies could also furlough and lay off employees to cut their budgets and meet the sequestration requirements.

Hoyer pointed out that the current pay freeze is expected to cost feds $60 billion over a decade, but he would not rule out considering future proposals that would hit federal employees.

"Federal employees have already taken a big hit," Hoyer said. "I'm sure there will be proposals for them to take additional hits. Depending on what they are, we'll have to look at them."

Sequestering $1.2 trillion in across-the-board budget cuts "is not rational," since it doesn't differentiate between high-priority and low-priority programs, Hoyer said. But undoing the automatic trigger and reneging on the fallback cuts agreed to earlier this year as some Republicans have proposed would be even worse, he said.

"Doing nothing is not an option either," Hoyer said. "Cutting the $1.2 trillion is absolutely essential. We need to make a decision on taxes, and entitlements, and other spending as well. It's not going to go away."

Hoyer said federal managers should start preparing for the sequestration cuts, which would begin in January 2013.

"Obviously they need to be thinking about, ‘If sequestration occurs, what impact does that have on me?' " Hoyer said. The preparations should not only be "for their own management, but also to inform Congress and the American people that if they do this, this is what happens. If it means children are not going to be fed, kids not be educated, firefighters not on the job, you need to know, this is the consequence of our decision."

Hoyer, of Maryland, said transportation projects in his state will likely be hit by sequestration cuts, as would Defense Department facilities such as the Naval Air Station Patuxent River.

Defense Secretary Leon Panetta on Nov. 14 told lawmakers that sequestration would mean vast layoffs and furloughs of Defense civilian employees, such as contracting and payroll personnel.

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