‘Let’s Not Sequester Ourselves:’ DoD Comptroller Hale

WASHINGTON: Even with Congress in recess until after the November elections, the Pentagon remains focused on avoiding sequestration — which would require Congressional action before January — rather than planning the least painful way to implement the automatic budget cuts.

“There isn’t a plan. I know this frustrates people, but we haven’t done detailed planning,” Defense Department Comptroller Robert Hale told the audience at a forum this morning hosted by Government Executive magazine. Even when one federal worker openly angsted that his office was doing nothing to prepare for sequestration although it is just three months away, Hale replied that he not only hoped to avoid sequestration, but even the labor of preparing for it: “I’d like to avoid the planning too because it will be, of itself, disruptive.”

“We are going to try hard not to sequester ourselves,” Hale went on. “By that I mean, [we should] not take steps in anticipation of sequester, because we are still hopeful that it will be averted.”

Eventually, Hale acknowledged, “we’re going to have to take steps to get ready; I don’t have a clear view of what that will be yet…. We are not doing any planning at this point but at some point we’re going to have to move to that.”

Hale even said it’s still undetermined whether the department would have the latitude to apply sequestration targets within broad accounts (e.g. all Air Force aircraft procurement) or whether it would have to apply the same fixed percentage to each “program, project, and activity” (e.g. the F-35). “If it is by project then we won’t have much flexibility, he said. “If it’s at the program level, we will have some latitude.” This interpretation would certainly come as a surprise to the House Armed Services Committee, whose Republican staff has repeatedly said the law calls for cuts to be applied to each “PPA.”

Hale did reiterate that the Pentagon expects to avoid cancelling existing contracts — which would trigger substantial penalties and termination fees — or permanently laying off federal workers — which would require costly severance packages.

“We will not, except in rare instances, have to cancel contracts,” Hale said. “If it’s obligated on a contract, it’s exempt from sequestration.” (Congress variously authorizes and appropriates funds for the executive branch to spend, but money is only considered obligated when a contract is signed; when the government finally pays someone, that money becomes an outlay).

The department likewise does not anticipate any kind of Reduction In Force (RIF): “In the budget year they cost you money, typically,” Hale said, “more than you would save.” (Military personnel funds are exempted from sequestration, but civilian Defense Department employees are not). Instead, the Pentagon will look at a hiring freeze and attrition — that is, not hiring any new civil servants to replace those that retire or otherwise leave in the normal course of business — and, he said, “we will probably have to look at furloughs.”

The trick about temporarily laying off civilian personnel without pay, however, is that you have to furlough multiple people to come up with the same cost savings as getting rid of one employee for the entire year. What’s more, since furloughs cannot last more than 22 work days (or 30 calendar days) without triggering the RIF process, the federal government would be forced to do lots of short furloughs rather than a few long ones.

Just figuring out which people to furlough would be “painful,” Hale said frankly. No wonder, then, that he would prefer to avoid the process altogether, not just the implementation but the planning and preparatory measures beforehand.

“Let’s not sequester ourselves,” Hale emphasized. “Let’s stay the course and not anticipate sequestration.”