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OMB: Plan for hundreds of thousands of furloughs if budget deal fails

Jan. 14, 2013 - 05:52PM   |  
By SEAN REILLY   |   Comments
Jeffrey D. Zients  is the acting head of the Office of Management and Budget.
Jeffrey D. Zients is the acting head of the Office of Management and Budget. (Tom Brown / Staff)

Agencies should consider furloughs, hiring freezes, buyouts, early retirements and cutting contract employees as ways to reduce workforce costs if across-the-board spending cuts begin March 1, the acting head of the Office of Management and Budget said in guidance posted Monday.

Hundreds of thousands of federal employees could be furloughed, and services ranging from food inspections to prison security would be affected, Jeffrey Zients said.

Zients’ three-page government memo, similar to guidance released Jan. 10 by the Defense Department, is OMB’s first significant public policy statement on sequestration since late July when it advised agencies to continue normal operations. Among other contingency moves, he said, agencies should:

• Review grants and contracts for possible cost savings.

• Use as much flexibility as possible to “reduce operational risks and minimize impacts on the agency’s core mission.”

• Consider transferring or “reprogramming” funds.

Zients also cited the uncertainty stemming from Congress’ failure thus far to approve full-year 2013 budgets for agencies, instead leaving spending levels frozen at last year’s levels. A six-month continuing resolution expires March 27, raising the threat of a partial government shutdown.

“Until Congress acts, agencies must continue to prepare for the possibility that they will need to operate with reduced budgetary resources,” Zients wrote.

But while agencies should step up efforts to plan for the March 1 cuts, they should generally take no action at this time, he added. If any unusual steps are needed, agencies must coordinate closely with OMB, he said.

The March 1 cuts, formally known as sequestration, would total $85 billion by the end of the fiscal year in September. They are required under the 2011 Budget Control Act unless lawmakers and the Obama administration agree on a way to head them off. They had been scheduled to take effect at the beginning of January, but were postponed under a stop-gap agreement reached early this month.

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