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News briefs: Week of Aug. 12

Aug. 11, 2013 - 02:00PM   |  
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HUD cuts furlough days from seven to five

The Housing and Urban Development Department is cancelling furlough days that had been scheduled for Aug. 16 and Aug. 30, according to a grievance settlement Friday between the agency and the American Federation of Government Employees. The deal means that HUD workers will lose a total of five days in fiscal 2013 to unpaid furloughs, instead of the seven originally envisioned by management.

“Eventually, agencies across government are coming around to the reality that furloughs are costly and counterproductive in terms of dollars, production, and morale.” AFGE President J. David Cox said in a Friday statement announcing the settlement.

The Defense Department and the IRS also agreed this week to reduce or postpone previously scheduled furlough days.A HUD spokesman could not immediately be reached for comment Friday afternoon.

Under Obama administration policy, agencies resorting to furloughs because of sequester-related budget cuts have to bargain over the exact implementation terms with employee unions. At HUD, the original March “memorandum of understanding” with AFGE setting the total of seven furlough days was signed barely a month before the agency announced office closings and a major reorganization that will affect about 900 employees and cost millions of dollars for office retrofitting, new furniture and buyouts, according to Eddie Eitches, president of the AFGE council that represents about 6,500 of 9,000 HUD employees.

Had management postponed such steps until fiscal 2014, it could have saved enough money to cut the number of furlough days to five, Eitches said in an email to agency workers earlier this week. AFGE’s grievance had been scheduled to go before an arbitrator next week, but the union agreed to a postponement in anticipation of an agreement, Eitches said. HUD officials are looking for other ways to save almost $8 million, he said.

2-Year Sequester Delay Proposal Gets Cool Reception

The US Senate’s top appropriator wants Congress and the White House to pursue a fiscal deal that would put off the next two years of across-the-board defense and domestic spending cuts.

Sen. Barbara Mikulski, D-Md., chairwoman of the Senate Appropriations Committee, supports on-again, off-again talks between a select number of senators and senior White House officials. But Mikulski is warning that finding agreement on tax rates and domestic entitlement program reforms could — again — prove too difficult.

GOP senators and White House officials have begun fragile talks toward a $1 trillion “grand bargain” fiscal deal, the kind of package needed to lessen or replace twin $450 billion cuts to planned national defense and domestic spending. But, lawmakers tell Defense News, while progress has been made, the sides remain far apart on key issues.

Mikulski wants the two sides to consider what’s known on Capitol Hill and among Washington budget analysts as a “mini bargain.”

The upper chamber’s top appropriator took her plea public during a July 30 Senate Appropriations Defense subcommittee hearing, noting she is “all for” a long-term grand bargain.

But, Mikulski said to her committee colleagues, a short-term deal might be a temporary answer that would create two more years for President Barack Obama, his top aides, and congressional Republicans to finally bridge their many policy and spending chasms.

Mikulski’s envisioned mini bargain plan would replace or simply delay the across-the-board sequestration cuts in fiscal 2014 and 2015.

“While I’m for a [long-term] bargain,” Mikulski said, “I’m also for a bargain real quick.”

She said many House members “assume sequester is the new normal,” adding, “I don’t do that.”

The Appropriations Committee chief has a big stake in addressing both the defense and domestic sequestration cuts. Maryland has a large military and defense industry presence. And Mikulski is an advocate for domestic programs such as those run by the National Institutes of Health, based in Bethesda, Md.

“By saying ‘no’ to draconian sequester cuts, we are investing in research and innovation that leads to cures and treatments leading to new products and jobs,” Mikulski said in a July 11 statement. “I will continue to stand sentry against the slash of reckless cuts to American biomedical research.”

While GOP senators participating in the talks say Mikulski’s idea has merit, they insist only a long-term fiscal deal will do.

Asked whether the GOP-White House talks should pivot to a “mini-bargain” this fall if a bigger agreement becomes unreachable, Sen. Lindsey Graham, R-S.C., replied: “No. We have to go big.”

Sen. Bob Corker, R-Tenn., a key player in the fiscal talks with the White House, said a small deal has yet to come up.

“I think the gimmick period is over, and people are having serious discussions about how to go forward,” Corker said. “I don’t think a gimmick like that is going to be [feasible].

“I don’t say that with any lack of respect,” he added. “I’ve just been involved in a lot of meetings and discussions, and I don’t think that’s something that’s going to get a lot of traction.”

Postal Service 3Q loss shrinks to $740 million

The U.S. Postal Service reported a net loss of $740 million for the third quarter of fiscal 2013, as an increase in operating revenue was not enough to offset a legal requirement to book expenses for “pre-funding” future retiree health care. During the same three-month period from April through June last year, the mail carrier lost $5.2 billion.

For this latest quarter, mail volume totaled 37.9 billion pieces, down about one percent from last year, although profitable first-class mail volume fell 3.4 percent, the agency said in a news release. But the $16.2 billion in operating revenue represented a 3.6 percent increase from last year as the Postal Service’s shipping and package business continued to expand rapidly.

The report shows a 19 percent drop in operating expenses to $16.9 billion, aided by a favorable change in interest rates that drove down workers’ compensation costs by $918 million.

The bulk of the decrease, however, stems from the fact that the Postal Service is having to book only one annual installment for future retiree health care, compared to two last year. That $5.6 billion installment is due at the end of next month, but — as it has the last two years — the Postal Service plans to default on that payment, citing a lack of cash.

The Postal Service needs to make “fundamental changes” along the lines of its proposed five-year business plan, Chief Financial Officer Joe Corbett said in the release. “However, without comprehensive postal reform legislation signed into law, our hands are tied and we expect multi-billion dollar annual losses to continue.”

While both House and Senate members have introduced bills that would reshape USPS operations — potentially including an end to Saturday mail delivery — neither fully follows the Postal Service’s five-year plan or is close to becoming law.

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