The sequester: A case of over-the-brinkmanship

Well, March 1 is here. The witching hour. D-Day. The end of the trail.

So—what now?

If Wall Street was worried about sequestration as the sun rose on March 1, it wasn't showing it. It's more concerned with the expiration of the current continuing resolution a month hence, and with the reemergence of the debt ceiling debate, which is also not far down the road.

If members of Congress were worried, they didn't show it either, adjourning for the weekend on Feb. 28. That's because they helped create the arbitrary deadline in the first place, and they know they can just as easily erase it whenever they want. They know that—if they ever manage to agree on anything again—they can change a past misstep today, tomorrow or retroactively. And they just didn't feel like doing it quite yet.

They also know how furloughs work, about the requirement that federal employees must get a 30-day notice before any furloughs can be implemented, and so forth, so they figure that they have more time before some of the more public effects of a sequester—like fewer air traffic controllers, Social Security Administration office workers, and the like—hit the fan.

Outside of possible furloughs, federal employees, for their part, can look forward to more of the same from lawmakers when members return and try to find ways to cut the budget and head off the full-blown implementation of sequestration.

That is, some members are bound to continue to hammer away at proposals that glean savings from the federal workforce via a continued pay freeze, workforce cuts through attrition, and/or benefits cuts.

The question still remains: Why do some lawmakers target your job, pay and benefits, when savings can be found in a hundred other places in the budget?

The answer, of course, is that whether you work at Foggy Bottom or the Pentagon, or at a federal office in Iowa or Texas, you represent what some have painted as an evil entity that is out to steal John Q. Public's lunch: The Federal Government.

That doesn't make any real sense, of course, but then again, neither does what today passes for politics in Washington. Little discourse, much confrontation. Nothing much gets done because compromise is off the table. And when one rules out compromise, there is little need for the legislative process to begin with.

A lot of it doesn't seem to make sense in other ways, either. For example, some lawmakers suggest cutting the federal workforce by 10 percent. Proponents of this measure are very good at tallying the specific savings these cuts would generate. These lawmakers, however, are less specific about how the work that these employees do will get done without them.

And that can be a small problem. For example ...

The Office of Management and Budget puts the estimated number of full-time equivalent executive branch employees in 2013 at 2.1 million. That means proponents of the cuts are advocating cutting back 210,000 employees. That would take the federal workforce down to about 1.9 million, which is roughly 2008-2009 levels.

Problem is that since 2009, the U.S. population has grown by about 9 million people (and is currently growing by a rate of one additional person every 15 seconds). That's about as many people as live in New Jersey or North Carolina.

So, according to those who would cut the federal workforce—and/or make pay and/or benefit cuts that would remove the financial incentive for seeking any career in federal service going forward—the federal government is going to serve those 9 million additional people with a smaller (and probably more transient) workforce.

It's a sure bet that employees at many agencies (think IRS and Social Security Administration, for two) are watching these proposals right now and trying to figure out how to serve those millions of additional clients with a 2009 workforce. And it looks even bleaker because those cuts would be phased in over several years—as the population continues to grow.

And that's only one small facet of the sequester mess.

It's anyone's guess what Congress and the White House ultimately will do to resolve the sequestration standoff. Ronald Reagan once famously said that he'd rather get 80 percent of what he wanted rather than hold fast and drive off a cliff with his flag flying.

At this point, getting 50 percent—a straight-up compromise—would look like the deal of the century.

Posted by Phil Piemonte on March 01, 2013 at 4:12 PM