Agreed to last summer by Congress and called “sequestration,” more than $100 billion in automatic federal budget cuts are scheduled to go into effect beginning January 2013. As a result, federal employees, government contractors (defense and otherwise), local officials and others are being forced to consider best and worst-case scenarios of “smaller government” and dramatically reduced federal spending. Join Kojo to explore what we know and don’t know about the cuts, the anticipatory planning underway across various different sectors in our community, how you will be affected (even if you are not a federal worker or contractor) and whether our region is prepared for this reality — emotionally and financially — going forward.

Guests

  • Colleen Kelley President, National Treasury Employees Union
  • Robert Levinson Defense Analyst, Bloomberg Government
  • Max Stier President and CEO, Partnership for Public Service

Transcript

  • 12:06:45

    MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Across our region, the unwieldy word sequestration is putting a giant question mark over the futures of more than 600,000 federal workers and countless contractors. More than $100 billion is slated to be sequestrated or cut from the federal budget in January, unless Congress can come up with an alternative savings plan. So far, that has not happened.

  • 12:07:28

    MR. KOJO NNAMDIAnd with just 29 percent of Americans satisfied with the size and power of the federal government, we could be at the beginning of a fundamental reshaping of the U.S. government. The looming cuts are forcing hard questions about life and about livelihoods in our area. Who will lose their jobs? What will be the fallout in our region and beyond? And what will our federal government look like when the slashing has subsided? Joining us in studio to have this conversation is Robert Levinson. He is a defense analyst at Bloomberg Government. Robert Levinson, thank you very much for joining us.

  • 12:08:03

    MR. ROBERT LEVINSONThanks, Kojo. It's great to be here.

  • 12:08:05

    NNAMDIAlso with us in studio is Max Stier. He's president and CEO of the Partnership for Public Service. Good to see you again, Max.

  • 12:08:13

    MR. MAX STIERGreat to be here.

  • 12:08:14

    NNAMDIJoining us by telephone from Pittsburgh is Colleen Kelley, president of the National Treasury Employees Union, which represents 150 employees in some 31 government agencies. Colleen Kelley, thank you for joining us.

  • 12:08:28

    MS. COLLEEN KELLEYThank you, Kojo.

  • 12:08:29

    NNAMDIOf course, if you have questions or comments, you're welcome to join the conversation by calling 800-433-8850. You can send email to kojo@wamu.org, send us a tweet, @kojoshow, or simply go to our website, kojoshow.org. Join the conversation there. How will you be impacted if spending cuts go into effect in January? 800-433-8850. Max, are we now at worst-case scenario here? How are federal employees and contractors preparing for Oct. 1, 2012, which is when fiscal year 2013 begins?

  • 12:09:07

    STIERWell, I would never say we're at worst-case scenario since the future always seems to hold lots of unfortunate surprises. There are certainly a lot of clouds on the horizon, and you point out one, which is the new fiscal year, which starts shortly. There's at least talk about trying to get a CR, a continuing resolution, in place. Unfortunately, that's become the norm for government. They haven't had budgets in place hardly ever now.

  • 12:09:35

    STIERBut as you noted at the top end, it's not just the CR we have to be concerned about. It's the sequestration that could be taking place in the new year. And this is on top of, you know, a number of years now where budgets have been either held steady or declining and where there's been a great deal of uncertainty. Federal employees are not, frankly, being treated in the way they need to be in order to do their jobs right.

  • 12:10:00

    NNAMDICan you give us some data? What kinds of job losses could we face in the federal workforce?

  • 12:10:05

    STIERWell, and again, this is quite fascinating. We're going to hear some, I think, good data from Rob on the defense side, but, by and large, the non-defense piece of this has not been the focus of attention in the way it really needs to be. The latest research that I've seen shows basically near a job loss potential, on the non-defense side, of upwards of a million jobs. Again, the focus there is on jobs that are either federal employees, contractors or work that's being done for folks supporting that.

  • 12:10:32

    STIERBut the equally damaging, if not more important, component of this, is what kind of services are the American people not going to get that they need, that they expect from their government that our government was built to provide?

  • 12:10:44

    NNAMDIColleen Kelley, you have referred to this as, quoting here, "the worst political climate for federal workers in decades." What are these proposed cuts doing to the mood of your members? What is it doing to their morale?

  • 12:10:58

    KELLEYWell, considering the nonstop attacks that they -- and that's what federal employees really feel. There is a lot of concern, and morale is not in a good place, especially when you consider the tens of thousands of federal employees who are eligible to retire. And if they all did, that would be a very big problem for our country because they would not be receiving the services that the American people need and depend on and really deserve to have every day, so federal employees are very concerned.

  • 12:11:30

    KELLEYThe sequestration problem, of course, is a threat across the board. Every agency, defense and non-defense, would see about an 8 percent cut. And in most agencies, they would -- that would require either furloughing or laying off thousands of employees and, again, would provide not -- would not provide the services that the American public are depending on, whether it's border security or food and drug inspection or bank regulation.

  • 12:11:57

    KELLEYSo, in addition to the sequestration issue, though, and that question, you do have more than two dozen bills in Congress, separate pieces of legislation that are all aimed at federal employees, either freezing their pay, continuing to freeze their pay because, of course, they're in a two-year pay freeze now, or in cutting their retirement benefits or increasing their retirement contributions -- or more than half of those bills are actually aimed at the size of the federal workforce and would require anywhere up to -- from 5 percent to a 15 percent cut, which, again, would be devastating to the American public.

  • 12:12:34

    NNAMDIMax, in fact, the Partnership for Public Service did a survey of its members after these cuts were placed in the 2011 Budget Control Act and found, at least in terms of morale, some, I guess, disheartening results. Tell us about it, where morale improved in, it would appear, just 31 of 308 federal agencies?

  • 12:12:54

    STIERYeah. So the survey that you reference, I think, is really important because it's the data that we now have about what's happening to the federal workforce. It's conducted by the Office of Personnel Management on an annual basis as a result of a law that Congress passed, and it's really quite, I think, useful in understanding what's happening in the federal workforce. As you suggest, the numbers are not good. The headwinds that federal employees are having to deal with that Colleen just described have an impact.

  • 12:13:22

    STIERIt's hard to show up at work every day when you're the subject of lampooning in the press, in all kinds of context, and not to have that impact to your sense about your place of employment. And, frankly, there are other issues that are at stake here as well. We have not invested in the leadership in government that we need, and that has a big consequence in what employees feel. So the bottom line, as the data suggests, you have a highly mission-oriented workforce that is feeling pummeled, and that's not a good thing.

  • 12:13:57

    NNAMDIIn case you're just joining us, we're talking about the impact of federal budget cuts and sequestration. That was the voice of Max Stier. He's president and CEO of the Partnership for Public Service. Colleen Kelley is president of the National Treasury Employees Union, which represents 150,000 employees in 31 government agencies. And Robert Levinson is a defense analyst at Bloomberg Government.

  • 12:14:18

    NNAMDIAre you worried about losing your job in the next round of federal budget cuts? Call us, 800-433-8850. Rob, you analyze the defense industry, which is slated to absorb more than half of these cuts. What kind of impact are we looking at starting with the Defense Department?

  • 12:14:34

    LEVINSONWell, we're already seeing some of the impact, Kojo, as contractors particularly are starting to sort of hold back. I've talked to many of them, whether it's Lockheed or General Dynamics or things like that, and they're already starting to sort of postpone hiring decisions and capital investments because there's such uncertainty come January. But some of this uncertainty will hit, as we mentioned before, at the beginning of the fiscal year.

  • 12:14:57

    LEVINSONYou know, there's a big question as to will OMB, the Office of Management and Budget at the White House, sort of hold back money in anticipation of sequestration. You know, our calculations are on the defense side. It's about 9.6 percent of the available funds that might be cut. And so does OMB sort of hold that back, take back a 10 percent cut in anticipation of sequestration? Because if they don't do that and then it hits, you sort of have to dig deeper because you've only got three-quarters left of the fiscal year to make up for the amount.

  • 12:15:26

    LEVINSONThe amount of the cut doesn't change. It's just the money that you take it from. And so it's a real question. OMB has not been very clear. They're kind of very closed-mouth about this. There's some testimony that may occur later this week, which may clear some of that up. Congress is sort of demanding that. But it's still very unclear as to what the budgets are going to be like.

  • 12:15:45

    NNAMDII was going to ask about the impact on defense contractors, and this morning, The Washington Post reported that profits at the big defense contractors' IT businesses have been down because the government is now looking for the lowest price when it comes to IT services. Is this sort of shopping-around creating opportunities for smaller firms in the area that have previously been overlooked because, obviously, they're having a negative impact on the larger front?

  • 12:16:09

    LEVINSONYeah. I mean, in some ways, you know, the past 10 years, particularly in the Department of Defense, you know, there's been a real explosion in the budget because of the wars and some other things. Effectively, you've about double the budget. And so the Defense Department has been looking in its contracts for sort of best value. Well, now, in this new environment, whether it's because of sequestration or even without sequestration, the Defense Department is now looking much more for, you know, the lowest price technically acceptable is one of the terms that they use.

  • 12:16:38

    LEVINSONAnd so, yeah, there are opportunities for firms that can come in perhaps at a lower cost. And, as long as they meet that sort of minimum standard required by DOD, DOD is going to be much more inclined to look at them, and all of the advantages that say a bigger company, you know, that might put a lot of bells and whistles on whatever it is that they're producing, DOD is not going to be quite as interested in that. It's going to say, what is the lowest price I can get for the minimum thing that I need to do my mission?

  • 12:17:02

    NNAMDIColleen Kelley, of course, lawmakers could reach a grand compromise by the end of the year to reverse sequestration. Do you think that will happen?

  • 12:17:12

    KELLEYWell, I think that there is a lot of agreement that sequestration should be avoided, that it's a bad idea. I think there is some pretty widespread agreement that that would be in everyone's best interest. So then the question is, how you get there? Again, I think there is pretty widespread agreement that a deal to prevent sequestration has to be balanced. It has to include both revenue on the table, as well as spending reductions, and, while we don't know a lot about what they intend...

  • 12:17:46

    NNAMDIUh oh. We seemed to have...

  • 12:17:47

    KELLEY...right now.

  • 12:17:48

    NNAMDIOh, there we go.

  • 12:17:49

    KELLEYWhat we do know is that the president will be signing shortly legislation that's going to require a report to be done by the agencies in 30 days that would show the impact on sequestration. That may be the impetus that everybody needs to have some more specifics. So, by the end of August, I think that we will have a clearer picture of the impact of sequestration. And I'm hoping that that will then lead everyone in the same direction to recognize that there is a commonsense solution to this that would actually avoid sequestration.

  • 12:18:26

    KELLEYAnd considering there is not much agreement on many things in Washington these days, if there is agreement that sequestration is a bad idea, then every day is real important that, you know, the parties are working together to figure out that best-case scenario.

  • 12:18:41

    NNAMDIRob Levinson, as you look out on the political horizon, do you see a commonsense solution lingering there? Do you see a grand compromise lingering there?

  • 12:18:49

    LEVINSONWell, one of the problems, of course, Kojo -- there's a couple of other factors here. Of course, you've got an election coming up, and so both sides are kind of looking to wait until after an election because both sides probably believe that they're going to be in a better position after the election. Either the Republicans think they might win the White House and gain seats, and the Democrats think they're going to hold on and perhaps gain seats, and so whatever deal they might negotiate, they'll be in a better position after November.

  • 12:19:13

    LEVINSONSo it's very hard to imagine that they cut a deal before the elections. The other problem is in this lame-duck Congress. It's not just sequestration. It's not just the continuing resolution. We've got a whole lot of other stuff. The alternative minimum tax, the Bush tax cuts, Social Security tax, the Medicare doc fix, there's a huge package of stuff all with tremendous fiscal implications that all has to be dealt with in that lame-duck Congress before the beginning of the year. And so when you talk about a grand bargain, it's going to have to be real grand because it's so big and there's so much on their plate.

  • 12:19:47

    NNAMDIAnd, so far, the track record doesn't suggest real grand bargains on the horizon, but, of course, I could be wrong. Max?

  • 12:19:55

    STIERI would love to -- in an ordinary circumstance, I would hate to see you wrong, and this one I'd like you to be. I do think this is very tricky, and it does seem like it's unlikely that much happens of consequence until after the election. And then you do really have an awful lot of congestion of a lot of large issues that would have to be addressed.

  • 12:20:14

    STIERUnfortunately, and this is highly problematic, and I think Rob said something that was critical at the front end, which is this causes problems now because it creates uncertainty not just in companies that have to decide who they're going to hire but also in the minds of federal workers who have to decide whether they do or do not want to retire now.

  • 12:20:33

    STIERYou know, whether they're going to spend all their time focused solely on their mission or they're going to be thinking a little bit about whether they're going to have a job next month or in six months, I mean, this is not good for anybody. And there really ought to be, I think, the leadership in our country to move us beyond this. We have a lot of real problems. This is one that we're making for ourselves.

  • 12:20:54

    NNAMDIAll week, WAMU's news department will be exploring the size and role of the federal government during "Morning Edition." Tomorrow, WAMU 88.5 News will be exploring what cuts mean for our local economy. If you'd like to join this conversation right now, you can call us at 800-433-8850. Are you in favor of smaller government despite the painful cuts that could be involved, or what are you hearing in your agency or workplaces? Anyone seeing projects delayed or redefined?

  • 12:21:22

    NNAMDIYou can share your story by going to our website, kojoshow.org, sending email to kojo@wamu.org, sending us a tweet, @kojoshow, or calling 800-433-8850. I'm Kojo Nnamdi.

  • 12:23:22

    NNAMDIWe're discussing federal budget cuts and sequestration with Robert Levinson. He is a defense analyst at Bloomberg Government. Colleen Kelley is president of the National Treasury Employees Union, which represents 150,000 employees and 31 government agencies, and Max Stier is president and CEO of the Partnership for Public Service. We go to the phones. Here is Pamela in Washington, D.C. Pamela, you're on the air. Go ahead, please.

  • 12:23:50

    PAMELAYes. I am a federal employee, and I think one point I'd like to make is the EEO Commission. There are federal managers who have caused an epidemic and abuse of different types of EEO abuses within the federal government. These managers are costing taxpayers a lot of money because they have to pay out. I don't see where anybody in the federal government has ever focused on this and how money could be saved by...

  • 12:24:32

    NNAMDIBy simply following the correct EEO guidelines. Is this an issue that you have you have looked at, Max Stier?

  • 12:24:37

    STIERWell, as I hear, Pamela, I think the point is a broader one which is that managers, by and large, aren't supported in actually seeing through addressing complaints and issues in the way that they need to, very hard for -- these things take a lot of time. By and large, leadership and government isn't interested in dealing with problems that are going to take a lot of time and a lot of energy.

  • 12:25:01

    STIERThey'd just as soon pay for it and have it go away, or they'll move the employee and put them some place else where they think they're not going to cause as much damage. That's a real problem. So I think the broader point is, no doubt, there are places we can save money in government, and, no doubt, we need to do it. This is not the way to do it through sequestration, I think, is the bottom line.

  • 12:25:20

    NNAMDIPamela, thank you very much for your call. Colleen Kelley, you mentioned earlier that we may get more of an idea soon from the White House about how these cuts will me meted out. The Senate last week approving legislation, demanding that the Obama administration provide the details. What's your plan of action once those details are released?

  • 12:25:38

    KELLEYWell, once we see specifics, of course, we will want to talk to each of the agencies about plans that they are making should that occur. And while that is very important for us to know as much as possible about what could happen if sequestration occurs and, again, you could debate the timing, as Rob said, as to whether it, you know, the possibility of it being avoided really could occur before the November election or after, but I continue to believe that as I said, I think everybody thinks that sequestration is a bad idea.

  • 12:26:12

    KELLEYAnd NTEU's priority, as this debate goes on, is going to continue to push for fairness and balance if that were to happen. It would be critical that the middle-class workers that I represent, who have already emptied up over $75 billion -- and that's with a B -- that's the cost of the two-year pay freeze and the increase contributions new hires will pay to their pension beginning in January.

  • 12:26:38

    KELLEYAnd there is -- and, I think, if you look at the contributions that have been made by any group to the deficit situation in this country, federal employees are the ones who have made those contributions, no other group. And so, until other groups catch up, like corporations and the wealthiest Americans, I think it's incumbent upon all of us to ensure that the federal government that exists and that they agencies that are there to deliver services that the public depends on, like keeping the air we breathe clean and the water we drink clean, and inspecting food that comes into our country.

  • 12:27:16

    KELLEYThose are the things that everyone just expects to happen, and really no thought's being given to how agencies could possibly continue to do that if sequestration or any cuts in those range levels were to occur.

  • 12:27:30

    NNAMDIRobert Levinson?

  • 12:27:31

    LEVINSONYeah. Kojo, Colleen brings up an excellent point that I think is worth bringing out. She talks about if these cuts have to be made that they'd be made fairly. One of the real open questions on sequestration -- and, again, perhaps we'll get more enlightenment in the testimony later this week -- is, how much discretion the agencies have will -- to implement these cuts? One way of reading the law, the law says, every program, project and activity must be cut by an equal percentage, and that's a real question.

  • 12:27:58

    LEVINSONNow, that program, project and activity is kind of a vague definition that's not clear in the law. I talked to some of the guys who were, you know, in OMB back in 1986 when this was actually done last time, and they actually applied it that way where they went through every single program that they could find and cut the same percentage. And that's a very disruptive way of doing business.

  • 12:28:16

    LEVINSONAnd, as Colleen says, that -- there's no discretion there. There's no ability to sort of be fair or decide what is the most important part of a mission and we'll cut here. We'll rob Peter to pay Paul. They may not have that discretion. A lot depends on how OMB interprets the law and the guidance that it gives to the agencies if they have to implement this and then if Congress sort of agrees with OMB's interpretation because they could push back.

  • 12:28:41

    NNAMDIBack to the telephones. Here is Mark in Arlington, Va. Mark, you're on the air. Go ahead, please.

  • 12:28:46

    MARKHi, Kojo. I'm calling. I am a federal worker from the National Park Service, and I worked pretty much full-time for the last five years as a temporary or seasonal employee. And I'm going to be facing the sunset of that career coming up at the end of this year. And I've had 20-plus years in the private sector before coming on to this public service job, and I just find it hard to believe that, on the one hand, we keep increasing the number of parks. And, for example, even in this week as Washington Post, they were talking about a new park covering the Manhattan Project.

  • 12:29:27

    MARKYet we keep cutting the budget for national parks. And, of course, with sequestration, that will be cut a further 10 to 20 percent on top of that. Perhaps, as in the '70s when Richard Nixon found that Congress was not to his -- or the budget was not passed to his liking that he would just shut some of these parks, and so people could feel what it'd be like not to be able to visit the National Mall or the Grand Canyon or Yellowstone National Park. Perhaps that is, in effect, a solution that might occur and force people to indeed act.

  • 12:30:02

    NNAMDIMax Stier, if federal agencies are going to have to either, A, do more with less, or, B, do less with less, what will be the impact beyond services we get from the government? We've heard from both Colleen and now Mark on the fact that we'll miss some things that we consider a part of our normal everyday lives and expectations.

  • 12:30:20

    STIERRight. Well, I think that is one of the great frustrations here which is that, by and large, I don't think either the American people truly understand what they get from their government. And, frankly, I don't think the government does a very good job of explaining what it does for the American public. And I think there needs to be, you know, work on both of those problems. Ultimately, we are going to be put in a position where we should be deciding what our priorities are, and this goes back to Rob's point.

  • 12:30:48

    STIERTypically, in budget-constrained environments, there's an effort to view the expedient which is across-the-board haircut. And that simply penalizes those programs or agencies that are more efficient and, frankly, doesn't give us, the American taxpayer, a sense about what it is that we are choosing to get from our government and what we value most. And that's the kind of conversation that we never have, and without it, we're going to be not optimizing our resources, and that's a really, really big problem.

  • 12:31:22

    STIERBeyond sequestration, we know we're going into an error of limited budgets. We need to make choices. We need to be smarter about how we get our priorities done. But we also have to choose what we care about most.

  • 12:31:33

    NNAMDIThank you very much for your call, Mark. Do you think that federal programs should be cut, and if so, which programs do you think should be cut? 800-433-8850. Do you think lawmakers will come up with a grand compromise at the 11th hour? You can also join us if you have some insight on that conversation by going to our website, kojoshow.org. Rob, are we seeing any real analysis going on in the Defense Department about where the bloat is and how to slim down smartly rather than the across-the-board haircut that Max just referred to?

  • 12:32:07

    LEVINSONWell, you know, the Pentagon did go through recently to get to President Obama's, you know, proposed 2013 defense budget. They went through sort of a strategic review and looked at all kinds of things and strategy and all of those things. And this is the way the department really likes to do budgeting, is sort of figure out what your changes in strategy are. And they looked at things like pivoting to the Pacific and things like that. And they came up with, you know, about $487 billion in defense cuts over the 10-year period already.

  • 12:32:35

    LEVINSONNow, they're being very quiet, and they're saying that they're not planning for sequestration and things like that. I have to believe that inside the Pentagon in very quiet rooms behind locked doors, people are going through this drill and saying, if we've got to take about 9.6 percent haircut from our program, what does that look like, and where do we take it?

  • 12:32:55

    LEVINSONBut if that is occurring, that is, you know, they are under pretty strict orders not to be talking to anybody about it because I think there's a fear that, well, if we talk about it and we say, well this is how we would live with a problem, we actually take some of the pressure off the Congress to fix the problem because some people will say, well, DOD can live with this. They're already starting to come up with plans, so it probably is going on inside the Department of Defense and inside other agencies. But they're under pretty strict orders no to be talking about it.

  • 12:33:21

    NNAMDIBack...

  • 12:33:21

    KELLEYKojo, if I could just add.

  • 12:33:22

    NNAMDIGo ahead, please, Colleen Kelley.

  • 12:33:23

    KELLEYI agree with what Rob said that, you know, the strategy, the defense has gone through to find savings. I believe every federal agency over the last few years, if not before, has gone through that. They really have had to when you look at the size of the federal workforce. In 1953, there was one federal worker for every 78 residents in this country. In 2009, there was one federal worker for every 147 residents in this country.

  • 12:33:52

    NNAMDISo in terms of proportion, the federal workforce is already shrinking.

  • 12:33:56

    KELLEYOh, it has shrunk almost in half compared to the public that it serves and that depend on, you know, the work that federal employees do every day. So when you think about that and the scenario whether -- of any kind of a cut, whether it comes through sequestration or through something else, you know, just through the normal legislator process, the CR or an appropriations process, I mean, it's devastating and has been devastating to these agencies that are doing more work today and serving more residents of this country that they ever have before and doing it with a smaller workforce.

  • 12:34:32

    KELLEYAnd, of course, things like efficiencies help and technology helps. Of course, there are those things in every agency, I think, can and should and most of them are looking at those, you know, to become more efficient. But you cannot drop the number of federal employees who are delivering on these -- the critical part of the missions of these agencies that the public really depends on. I mean, this isn't just some mission that is important to the agency or to the department.

  • 12:34:57

    KELLEYThis is, you know, parts of the mission that are critical to every American who depends on that, whether it's about getting, you know, assistance at VA hospitals or getting your Social Security checked or even if you look at the IRS. The IRS today has, you know, regardless of whether that's a popular agency for you or not, the IRS has 20,000 fewer employees today than it did in 1995. And it services hundreds of thousands more taxpayers.

  • 12:35:26

    KELLEYAnd more important, what many people forget about the IRS is that the IRS collects the revenue that provides the funding for 93 percent of the rest of the federal government. You know, they do that based on laws passed by Congress and everything else, but 93 percent of the money that funds every other agency, the National Park Service, the VA, fill in the blank, whatever agency you depend on a service from that agency from.

  • 12:35:52

    KELLEYSo every agency is -- has been so dramatically impacted by these cuts to date, whether they get it through buy-outs or through not selling jobs. Rob had mentioned, you know that the defense contractors are holding back not -- hire or not signing new contracts and doing new hiring because they don't know what the future brings, and that's exactly what federal agencies are doing and that is not good.

  • 12:36:14

    KELLEYI continue to believe that everyone needs to look at a best case scenario, you know, for how to solve this. And if I could just briefly throw out -- I think there's three things that need to be done: get revenue into the mix, which the administration and the Democrats in both the House and Senate have been interested in doing. It's the House leadership that is not interested in doing that.

  • 12:36:36

    KELLEYBut -- so you need to get revenue into the mix most likely by not extending tax cuts for the very wealthy. You need to find savings from wasteful and unnecessary spending. And there is a contract employee issue that I would mention here. And it's not just about defense. It's about contractors across the government.

  • 12:36:53

    NNAMDIYou think contractors cost us more than federal employees do?

  • 12:36:56

    KELLEYActually, today, a contractor can reimburse one employee under a federal contract at the rate of $769,000 for one person. And there is legislation that is pending, that, if passed, would put a cap so that a contractor could only be reimbursed $200,000 for one employee instead of $769,000. That would save $50 billion over 10 years.

  • 12:37:25

    NNAMDIHere is -- I wanted to tell -- I ask people to call in talking about whether or not they think there federal programs that should be cut. And we have David in Reston, Va., who may not want to talk about a specific program but just in general. David, you're on the air. Go ahead, please.

  • 12:37:41

    DAVIDHey, Kojo. How are you doing? Hey. I just want to say I really enjoy your show. Yeah. Basically, I'm just coming out of the federal government. I got a job in the public sector. I think basically the problem is that it's not the cut on federal law enforcement or like the last person with the park services. I don't think that that's where the attack is. I think the attack is on a lot of the administrative jobs that are just unnecessary. I saw a lot of abuse with federal spending, a lot of employees that just weren't employed.

  • 12:38:14

    DAVIDI mean, when I went interviewing for my public sector job in this economy -- I'm sure you can imagine how challenging that was. But one of the first things I would say in the interview process was, I got to tell you, I'm just bored with the 40-hour work week. It's driving me crazy. I want to work more than 40 hours. And it's that kind of entitlement, I think, that's worthy (unintelligible). It's the 40-hour work week. It's the hour to hour-and-a-half lunch periods that occur.

  • 12:38:41

    NNAMDIYou're saying that this is what you said when you started looking for work in the private sector?

  • 12:38:46

    DAVIDCorrect.

  • 12:38:47

    NNAMDIOkay.

  • 12:38:47

    DAVIDCorrect. And...

  • 12:38:48

    NNAMDII'd like -- go ahead, David.

  • 12:38:50

    DAVIDAnd, no, and I feel like that's where the attack is. And I would encourage a lot of people in the 12:30 in the afternoon to go into a federal facility, see some of the workers that are (word?) there. I think we've exceeded a couple things. I think, first of all, a lot of people want to be back from lunch. So you wouldn't be getting any kind of customer service. Second is you -- if you did reach somebody, the customer service that you would get, it would be really, really lacking, so...

  • 12:39:20

    NNAMDIOK. Before, David, I have any of our panelists respond to that -- and thank very much for your call -- I want to go to another federal worker, this time, Catherine in Annapolis, Md. Catherine, your turn.

  • 12:39:33

    CATHERINEHello, Kojo. I've listened to your show for a long time. I grew up with your voice in my kitchen.

  • 12:39:37

    NNAMDIThank you.

  • 12:39:38

    CATHERINEI work for the DOD, and I've only just entered the workforce. I've only been working for them for three years. And I have learned just how much the federal government does, not just on the DOD base but everywhere. And I was curious if there were going to be any initiatives or any concerns related to making that transparent. I think if people knew more about what the federal government does for its people, I think there would be fewer attacks and less frequent attacks on the federal worker.

  • 12:40:08

    NNAMDIWell, you've been hearing both Colleen Kelley and Max Stier talk about that fairly extensively today. But, Colleen, part of your work in fighting these looming cuts has been to remove some of the stereotype perceptions of your members, which -- one of which we just heard described by David, that you can go into a federal law office, and people take long lunches. They don't work the full 40-hour weeks.

  • 12:40:31

    NNAMDIThey don't want to work any longer than 40 hours. You've been trying to make your members, in a way, more popular. But it can be hard when some of them, as you pointed out, work as tax collectors. As a former IRS agent yourself, how are you working on this popularity project?

  • 12:40:47

    KELLEYWell, I think it -- you know, we have approached it not so much from a popularity contest -- but surely that's somehow -- sometimes how it comes out -- but an education process and information sharing to make sure that the -- that, you know, that the public, like the last caller from DOD, that she and others value and recognize, more importantly, what federal employees do. We actually launched a public service announcement campaign just last year that has been playing on TV and radio stations across the country.

  • 12:41:19

    KELLEYAnd the theme of the campaign is, federal employees, they work for us -- us, of course, being the U.S. And in there, it's intended to inform the public about the very important work that federal employees do for our country every day, things that they really do value and respect but they just don't think about on a regular basis. We have also launched a website where we respond to misinformation about federal employees, and that is a website called www.federalemployeefacts.org. There are a lot...

  • 12:41:54

    NNAMDIWhat would you say to a caller like David, who says, "In the specific agency in which I worked, these were my observations"? What do you think should be done about that?

  • 12:42:03

    KELLEYWell, I mean, first and foremost, with all due respect, I would say I don't doubt what he experienced and what he described. But I also believe that you could walk into a private sector company somewhere in the country and find that also. I don't think, you know, that what he described is indicative of what federal employees or federal agencies do every day. I think every federal agency and private sector, of course, has an obligation to look at how time is being spent and the work that's being done.

  • 12:42:34

    KELLEYBut I can tell you, in the -- of the federal employees that I'm familiar with and I work with, there's no place that shuts down at lunch that a taxpayer who walks in would not be able to get service. I mean, that would fly right in the face of, of course, what customer service is, so...

  • 12:42:48

    NNAMDICatherine, thank you very much for your call. We're going to have to take a short break. When we come back, if you have called, stay on the line. We will be continuing our conversation on this impact of the federal budget cuts and sequestration. If you haven't called yet, we still have a couple of lines open, 800-433-8850. Would you take a job in the federal government right now? 800-433-8850. I'm Kojo Nnamdi.

  • 12:44:57

    NNAMDIWelcome back. We're talking with Max Stier. He is president and CEO of the Partnership for Public Service. Colleen Kelley is president of the National Treasury Employees Union. It represents 150,000 employees in some 31 government agencies. And Rob Levinson is a defense analyst at Bloomberg Government. We got this email from Gordon, Rob. I suspect it's for you.

  • 12:45:19

    NNAMDI"One on-air guest just said the Defense Department came up with $487 billion in cuts. They did not. Defense budget growth over the next 10 years, as projected in the fiscal year 2012 budget request, was reduced by that amount, leaving defense budget projected to grow at the rate of inflation over the next 10 years. By any definition of the word cut, that is not a cut. It is lower than previously projected growth."

  • 12:45:45

    LEVINSONWell, Gordon is a very smart guy, and he worked -- he was in OMB, and he's absolutely right. It is...

  • 12:45:50

    NNAMDIGordon Adams, who currently teaches at AU School of International Service.

  • 12:45:53

    LEVINSONRight. And he's absolutely right. It is -- in fact, when I say $487 billion, he is right. It was a cut to the projected growth, and that's, in fact, what everything is here, is a projection to say, here's what we would have spent, and now here is what we are going to spend. And so it is a cut. And he is right that it really is a slowdown in the rate of growth, you know, a fairly significant slowdown in the rate of growth, but it is, in fact, that.

  • 12:46:17

    LEVINSONIt's not like they are actually taking what most people think, you know, if I took a cut, my household budget might look like. It's a little bit different when you're talking about government budgeting because every agency -- I mean, DOD does this. They project outward, and they say, this is what we think we're going to spend. And then if you take something below that, you say it's a cut, but, in fact, it is really a reduction in the projected rate of growth.

  • 12:46:38

    NNAMDIAnd we got a tweet from Mike, who suggests, "First thing to cut is the Capitol Police. Let the Congress protect itself." On a more serious note, we got an email from Virginia in Alexandria, who says, "What do your guests think? Would the cuts in service to the public be big enough to demonstrate to the public that government is necessary for society to function or just cause pain within the workforce?" Max Stier?

  • 12:47:02

    STIERYou know, I think, unfortunately, it's a classic cutting off your nose to spite your face. I don't believe that the cuts would all of a sudden reveal how important government is to folks. I think a lot of people who are dissatisfied with what they're getting from government today would simply become more dissatisfied and therefore think we need to invest even further -- even less than what we are currently planning on doing.

  • 12:47:24

    STIERSo I don't think this is the silver bullet that changes the minds of the public as to why we need to be investing in government. Instead, I think we really need to focus, again, on the service side and communicating more effectively what we are getting from government. It's a lot but, frankly, not something that's transparent for hardly anyone, including those in government themselves.

  • 12:47:46

    NNAMDIOn to John in Leesburg, Va. John, your turn.

  • 12:47:51

    JOHNHi, Kojo. Good afternoon. I wanted to ask your panel a question on what they think about referendums because we keep hearing politicians arguing about raising taxes on the wealthy. And now it's sequestration. And, you know, the discussion keeps going on and on, and there's no end in sight. And middle-class America is suffering. Is it possible that there will be a referendum so the voters will decide if the wealthy should be taxed or not, or (unintelligible) sequestration that you are discussing right now? Thank you.

  • 12:48:26

    NNAMDIThe answer to that is there are two chances of that, I think: slim and none. What do you say, Colleen Kelley?

  • 12:48:33

    KELLEYFor many, many years, that process has been in the hands of Congress. They decide whether to increase or lower taxes. They write every provision of the U.S. tax code that then, you know, is implemented. So at this point, it is in the hands of Congress, and I would agree with you on your slim-to-none scenario, Kojo.

  • 12:48:56

    NNAMDIGo ahead, Rob.

  • 12:48:56

    LEVINSONKojo, if I might just add, I'm originally from California. You know, in California, we do have a referendum...

  • 12:49:01

    NNAMDIOh, yes. For just about everything.

  • 12:49:02

    LEVINSON...during initiative process. And, really, if you look at California's fiscal situation and things, Californians have managed to box themselves in pretty well fiscally through the initiative process. I'm not sure that having an initiative or a national referendum process of one form or another would really make this a better way to do business than we currently have, as messy as it might be.

  • 12:49:22

    NNAMDIJohn, thank you for your call. We move on to Lisa in Washington, D.C. Lisa, you're on the air. Go ahead, please.

  • 12:49:29

    LISAHi, Kojo. I just wanted to say that I am a federal employee. I'm an attorney at the Social Security Administration, and I am sort of a Generation X'er who looked to the government when the legal community, particularly in D.C., sort of imploded during the financial collapse. And I have to say, I think I came to some of the stereotypes that people put forth. And I found myself surrounded by these marvelous, talented, ambitious, driven people.

  • 12:49:58

    LISAAnd it just -- it sort of disheartens me when you hear so many people disparage, you know, government workers when these are some of the hardest working people who could make more in the private industry right now but who usually don't because of either their commitment to the cause or, you know, family obligations, and it's really unfortunate. I will say, I had some of those same stereotypes until I got in there and saw that these are fantastically smart, great people who are dedicated, particularly Social Security Administration, to serving a lot of the citizens.

  • 12:50:31

    LISAAnd I will say, it's amazing to me how many people who, you know, scream against the federal government are receiving SSI and Social Security checks. So I just wanted to say, as a person who kind of grew up with a negative stereotype and after being there, I found that none of it is true. Like your panel has said, someone in every private sector industry, there are going to be slackers. Sure. But to kind of paint it with a broad brush that that's the image of the federal worker is absolutely...

  • 12:50:59

    NNAMDILisa, thank you very much for your call. And since Lisa talked about the very smart people she's working with, Colleen Kelley, we've talked a lot on this show about brain drain in the federal sector as baby boomers retire. What kind of impact could these cuts have on those who are getting ready to retire?

  • 12:51:16

    KELLEYWell, that could have a huge impact. If the federal employees who are eligible were to exercise that, you know, their option to retire, it would mean a loss of so much institutional knowledge and not allow the opportunity to transfer all of that and to really transition from those eligible to retire to a new workforce. That is becoming extremely hard and has been the last few years because there has been so little hiring done, so there's not really a new workforce to help transition.

  • 12:51:46

    KELLEYBut there surely are still many, many employees who would welcome the opportunity to move into new jobs that are already in the federal government and to learn from those who were eligible to retire. I also think -- I just want to add, Kojo, that I cannot thank you enough for giving federal employees like Lisa the opportunity to say what she just said about her co-workers. That's exactly the message that -- and the real-life information that needs to be out there, the story that is so often untold about federal workers.

  • 12:52:16

    NNAMDIWanted to get back to the Pentagon for a second, Rob. What's harder to do in a massive agency like that, a large cut to just a few programs or a small percentage lopped off of a bunch of programs?

  • 12:52:28

    LEVINSONYou know, I think most people would say that the small percentage lopped off of a bunch of programs is probably actually harder to do because, you know, different programs, whether it's an acquisition program where you're buying a piece of hardware or it's some other thing, you know, it's a service, you know, cutting the grass on a base or whatever it might be, you know, lopping them off in a uniform percentage doesn't allow you to really think through strategically.

  • 12:52:51

    LEVINSONYou know, for instance, if I'm buying a large weapons program, say, an F-35 fighter jet or something, I can push off and I can say, well, this year, instead of buying the 20 I had planned, maybe I buy 15 and things. And certainly that is disruptive. But sometimes, that can be easier to do than cutting off a service. You know, if you tell the Air Force, well, you've got to cut your fuel budget by 10 percent, well, that means less flying hours for every pilot, and then that means each pilot is less trained and less combat-ready to perform his mission. So that gets very difficult.

  • 12:53:19

    LEVINSONSo I think the -- even though it's -- yeah, it's, you know, nine, almost 10 percent off of various programs, that, in some ways, can be a lot harder than saying, well, we've got to come up with a sum of money. Let's kill these two or just push them back till next year, and we'll leave everything the same. That, in some ways, is easier to do.

  • 12:53:34

    NNAMDIHere's Lee in Springfield, Va. Lee, your turn.

  • 12:53:39

    LEEHi, Kojo. This is Lee Anderson. I wanted to ask about the negative externalities or the unforeseen consequences of the budget, the way the budget is spent. I wanted to know -- I've heard from a lot of government employees that they're forced, at the end other fiscal cycle, to spend any leftover money that they may have, otherwise their budget is cut or reduced by that amount the next year. I've heard this from a variety of friends who work in the government, and it seems to me that that inefficiency in the budget process itself could be an area where you could save a lot of money.

  • 12:54:14

    NNAMDIMax Stier.

  • 12:54:15

    STIERYou are right. That's a real problem. And, again, the uncertainty at the front end, not having a budget, having a continuing resolution, forces people to save as much money as they can. And at the end of the year, they may have something left over, and they're judged not whether they saved the money but whether they spent it.

  • 12:54:33

    NNAMDIAny comment in that Colleen Kelley?

  • 12:54:35

    KELLEYI think, you know, the agencies are put in a situation where, of course, there are serious repercussions if you overspend. And so they do err on the side of caution. And in the end, it is not good for the agency or for the employees and either leads them to spend the money maybe not as efficiently as they would otherwise or to not have that money available, you know, to do things they would have liked to have done for. So it's a process that could use some revisions, that's for sure.

  • 12:55:06

    NNAMDILee, thank you very much for your call. We move on to Jay, who is in North Potomac, Md. Jay, you're on the air. Go ahead, please.

  • 12:55:13

    JAYYeah, hi. Thank you, Kojo and guests. My comment is the panel has to play the game the way the other side is playing the game. What they have to do is they have to do a course model, explaining how expensive and inefficient and incompetent government would be if they replaced government with the foxes from private industries. For instance, we lost $50 billion to Bernie Madoff and how -- because we didn't have enough staff in the SCC. We lost $500 million to Solyndra because we didn't have enough staff that were competently trained in energy and decisions that are related to that.

  • 12:55:56

    JAYSo what I'm saying is what you ought to do is you ought to go head to head with the opposition that is basically touting economics. And given economic model to show what government -- what our government would cost and how eroded it would be and how weak we would be in a lot of areas like transportation and education, you know, if we downsize, which means letting those moneys go to private industry to do what...

  • 12:56:27

    NNAMDIHere's Rob Levinson.

  • 12:56:28

    LEVINSONWell, Kojo, the caller brings up an excellent point. You know, there was an article in The Washington Post this morning about the acquisition workforce in the Department of Defense, and it was actually the acquisition people are the people who buy stuff help the Department of Defense buy stuff. And it was contractors complaining that the experience level of the acquisition workforce has really deteriorated.

  • 12:56:48

    LEVINSONAnd now they have these young acquisition workers coming into the room with three lawyers because they're afraid of making a mistake. And many, many people have recognized that the experience and the training level of the acquisition workforce has somewhat deteriorated, and there's a real effort in the part of the Department of Defense to improve that workforce.

  • 12:57:05

    LEVINSONBut the caller brings up an excellent point that if, on the one hand, you're saying, well, my acquisition workforce isn't very good, and then if you cut it down further or you freeze pay raises and things like that, you wonder, is it likely to -- that going improve the acquisition workforce? Or are you going to introduce more of these in efficiencies that I think the caller was talking about?

  • 12:57:23

    NNAMDIAnd I'm afraid that's about all the time we have. Robert Levinson is a defense analyst at Bloomberg Government. Rob Levinson, thank you for joining us.

  • 12:57:32

    LEVINSONThanks, Kojo. It was a real pleasure.

  • 12:57:33

    NNAMDIColleen Kelley is president of the National Treasury Employees Union, which represents 150,000 employees and 31 government agencies. Very briefly, Colleen, is it hard to inspire young people now to pursue careers in the federal sector?

  • 12:57:47

    KELLEYWe keep trying. We're never going to give up, Kojo.

  • 12:57:50

    NNAMDIOK. Thank you very much. And thank you for joining us. And Max Stier is president and CEO of the Partnership for Public Service. Thank you all for joining us. And thank you all for listening. I'm Kojo Nnamdi.

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