Last week the Federal Trade Commission announced that, along with all 50 states and the District of Columbia, it was taking legal action against four 'sham' cancer charities. Allegations that the groups deceived donors to the tune of $187 million have rippled through the non-profit world. We consider what red flags donors should be on the lookout for and how data can - and can't - help us decide who's a good actor.
Guest Host: Marc Fisher
When sequester cuts went into place last spring, leaders of federal agencies began issuing dire predictions for their workforces, including dozens of furlough days for hundreds of thousands of employees. Now, while most federal workers have their days of unpaid leave behind them, many wonder if it’s back to business as usual or if another year of fiscal austerity is in store. As Congress prepares to negotiate next year’s federal budget, we take a close look at the impact of this summer’s federal belt-tightening and ask what could be ahead for government agencies and their workers.
- Donald Kettl Dean, School of Public Policy, University of Maryland; nonresident senior fellow, Brookings Institution
- Carol Bonosaro President, Senior Executives Association
- Todd Harrison Senior fellow for Defense Budget Studies, Center for Strategic and Budgetary Assessments
MR. MARC FISHERFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your community with the world. I'm Marc Fisher of "The Washington Post" sitting in for Kojo.
MR. MARC FISHERLast March Congress let the budget axe fall and with it federal agencies lost more $80 billion in funding. For federal employees budget cuts translated into furloughs. Agencies decreed a summer full of unpaid leave. In many cases that meant a week of no pay.
MR. MARC FISHERNow, as federal workers take their final furlough days for the year, many are bracing for what's next. 2014 is set to bring another year of heavy cuts meaning more furloughs, more reductions and possibly layoffs. Once again it all depends on Congress and whether lawmakers turn off the automatic spending cuts known as the sequester.
MR. MARC FISHERJoining me to discuss the impact of austerity on federal employees and they work they do are Don Kettl. He's the dean of the School of Public Policy at the University of Maryland and a senior fellow at the Brookings Institute.
MR. MARC FISHERCarol Bonosaro is president of the Senior Executive Association which represents federal government executives and Todd Harrison is senior fellow for Defense Budget Studies at the Center for Strategic and Budgetary Assessments and he'll be joining us by phone from the beach where many federal furloughed workers would love to be if they had the money that they were supposed to have been paid but maybe they can't afford to do it this year.
MR. MARC FISHERCarol Bonosaro, what are you hearing from your members? Are they having to make significant cutbacks in the way they live? Is this really hitting home in noticeable and measurable ways?
MS. CAROL BONOSAROWell, our membership career federal executives are of course at the high end of the scale salary wise. But which doesn't mean they don't they have issues when you've got kids in college etc. We do know that federal employees in general have really been placing demands on the Federal Education Employee and Education and Assistance Fund. They're about to run out of money. They give loans to furloughed employees.
MS. CAROL BONOSAROI think the big impact obviously on my membership is managing through all of this. And so we had done a little monograph called is this the new normal? It is extremely difficult. Some of them have said, you know, we've been through so many budget exercises, we're cutting everyplace we can to keep the mission going. And our worry is that eventually, you know, congress is going to look at say, well they kept it going. Obviously there's more fat, until finally they get to the bone.
FISHERAnd you can join our conversation by calling 1-800-433-8850 or email us at kojo K-O-J-O @wamu.org. Let us know if you're a federal worker. If you've been forced to take furlough days how did that affect your plans for the summer? How does it affect your finances? And how does it affect your ability to get your job done? What's been the sense at your workplace? Do you face any new challenges because of these cuts? And how did you end up using those days of unpaid leave? Let us know at 1-800-433-8850.
FISHERAnd Don Kettl, there was so much, as there always is in these budget showdowns, all kinds of dire talk of terrible things that would happen and services that wouldn't be delivered and so. And then along comes the sequester and the world doesn't come to an end and one side says, see that's not so bad and the other side says, well it really is that bad. What's the truth?
MR. DONALD KETTLThe truth is one of those things where it's somewhere in between. The administration really did itself an enormous disservice by hyping the catastrophe that was going to come back in March with a sequestration. Nobody really knew what was going to happen and nobody had ever really done anything like this before. But when it happened it turned out, well you know, it wasn't quite so terrible. The world didn't come to an end, unless you were one of the cities affected by the air traffic controllers or unless you were in a program that had meat inspection issues.
MR. DONALD KETTLAnd so congress arranged for exemptions for those two pieces. But then, for example, at DOD the initial projection was 11 furlough days, what's down to six. And EPA it started off at 10. They're down now to six so everyone's saying, well maybe not quite so bad after all. But the real problem is first the uncertainty in all this because the only way you can really manage effectively is to know from the beginning what it is that you're trying to do and what you're going to have to do it with.
MR. DONALD KETTLAnd this has been so much of a moving target that nobody can really plan. And it's undoubtedly cost the government millions if not billions of dollars just because of the uncertainty. Now we're going into a new fiscal year where the projections are for not only more of the same in terms of uncertainty, but perhaps even larger cuts, furloughs, reductions, layoffs and other kinds of problems, all which will depend on what happens in the next six weeks. So this is, in many ways, just crazy because we never intended to go down this road this way.
FISHERTodd Harrison from the Center for Strategic and Budgetary Assessments, the Defense Department issued furloughs to 650,000 of its civilian defense employees. They were required to take furlough days one day a week for six weeks. What has that actually meant for defense agencies in terms of their ability to get their work done?
MR. TODD HARRISONWell, you know, I guess we should start back, originally DOD said they were projecting a possible 22 furlough days this year. That's the maximum allowed under law. By the time they actually issued the furlough notice, that was down to 11 days. And then of course they recently said, oh, you know, we found enough savings now that we're able to move some money around, and they cut it to six days. You know, a lot of the impacts from the furloughs and from sequestration in general in defense, they just aren’t visible yet.
MR. TODD HARRISONThat's the trouble with this politically. It said, you know, some -- you know, a lot of the DOD civilian employees, they work in places like depots where they do maintenance of, you know, major equipment, major weapon systems for DOD, overhauling ships or tanks or planes, or you name it. And so, you know, when they've been out on furlough that just means that that maintenance work is backing up.
MR. TODD HARRISONAnd so you don't necessarily, you know, look out across the military and see an immediate impact from that. But it's something -- it's a backlog of maintenance needs and deferred maintenance that will build over time. And, you know, a year from now, two years from now, we will start to see the impacts of that. And another impact has been in contracting. When you -- or, you know, your contracting officers are out on furlough days, well, you know, they can't process contracts on those days. So they're not able to award contracts that they otherwise would've been able to award. So we're seeing some impacts from that as well.
FISHERCarol Bonosaro, what Todd Harrison says rings true to me if I think about what would happen if I lost six days of work in my own job. It's not that things wouldn't get done. It's just that they would get done later or eventually, which doesn't seem like a huge impact. But from a manager's perspective, when you're dealing with the federal workforce where there haven't been pay raises in a number of years, where there is all this uncertainty and where now people are being forced to stay at home and not work, how do you manage through that kind of uncertainty? And I would assume a real hit to morale?
BONOSAROYeah, managing -- being a federal executive today is not for the faint of heart. I think that what especially is difficult when we talk about deferred maintenance, deferred -- what we have yet to see in the future in terms of the impact of this, just look at employee training, hiring, etcetera, getting the next generation ready. That's what really worries us. It's hard enough to manage with morale in this being what it is in this situation. But we know already that there's a whole generation just below the senior executive service who has little or no interest in moving into the senior executive service. That is to say, really bright talented experienced people who we need ultimately in those jobs.
BONOSAROWe also know there are an awful lot of career executives who are eligible to retire, and they are leaving. And so when we talk about longer term impact, I think we're going to see it, and it's going to be very hard. It's not something you can easily back up and correct.
FISHERDon Kettl, in the way that people -- you know, there's all this worry about the next generation of federal workers. Who will be attracted to a system, to employment that is so uncertain, that is the butt of jokes, that is the target for politicians? And what is the impact of all that as well as of the outsourcing and privatization that we've seen over the last decade or so where so many government functions are being put out to private companies where people get paid a lot more?
KETTLYeah, both of those are big issues. I've got a great job this week. I've got 125 new students who are coming to our Masters Program in public policy at the University of Maryland. And they all want to get careers in the public service. But two years from now when they graduate the question is, will the federal government be hiring? Will there be hiring freezes? Will the best and the brightest discover that even though they wanted to go work for the federal government there's no road in? And then what's going to happen five years from now, ten years from now when we discover that we've lost the people that we need.
KETTLSome of this we've made up for by contracting out, but as we've seen with the battle right now over NSA security leakers where we had people who were -- we had an individual who was leaking information and his security clearance was conducted by a contractor. He was a contractor. We contracted out the contracting out. And as a result of that, there really is this problem of trying to figure out who's in control and who's accountable for all this? And it gets back to the need to having strong federal managers who leverage the workforce and leverage the product. And if we weaken that, ultimately we're going to weaken the federal government's ability to be able to get its job done.
FISHERLet's hear from Todd in Silver Spring. Todd, you're on the air.
TODDYeah, hi. So I have my own small business and I was consulting to the intelligence and defense communities for the past four years. As a result of the sequester I have been completely without contracts. I used to have more phone calls than I could handle and now I can't get anything. The flipside of that story though is I've worked on a number of projects that were so overstaffed. There was so much waste to the tune of, you know, you had one project that was $600 million. Another project was approaching $3 billion where they had about 1400 people running around that was done by 50 people originally.
TODDSo I'm sort of caught between, you know, not having any contracts but at the same time seeing so much waste and so much mismanagement of fund where you have this nexus of, you know, government people trying to build their -- you know, their empires, and contractors obviously having a responsibility to their shareholders to maximize revenue.
TODDYou know, I'm sort of split on this whole sequester thing. Was it done properly? Probably not but at the same time, you know, how do you deal with these programs that are so out of control and so big that they're -- you know, they're wasting literally billions of taxpayer dollars? I'm not sure how you deal with that without, you know, affecting people?
FISHEROkay. Todd Harrison, maybe you could address Todd's point there. I mean, obviously the furlough was not intended to be a way to ferret out waste and abuse in government. But has it in any way unintentionally revealed pockets of waste?
HARRISONYeah, I mean, I think, you know, that's one of the interesting things about the furlough being so broad in DOD is, you know, I said to people early on, you know, when we have these furloughs and people are gone one day a week, it will be an interesting exercise to see if the work doesn't get done, does it end up mattering at all? Because some of the work that DOD and other government agencies do every day is work that just doesn't even need to be done. You know, a lot of it is, you know, what people call a self-licking ice cream cone where people just make work for other offices. And those offices make work in return.
HARRISONYou know, I have not found any good examples yet. I just haven't talked to enough people, I'm sure, of when, you know, people are out one day a week, and it just turns out they just didn't need as much of a workforce as they had already. So that's, you know, an interesting natural experiment that occurred with this. But, you know, to the larger point that the caller raised is, you know, the conundrum of how do you ferret out waste in government? And I can tell you that, you know, in every part of government there's always waste. And so there's always more we can do to get more efficient to root out waste. The problem is the way that we're cutting the budget right now through sequestration is the exact opposite of how you would go about it if you actually want to root out waste and get more efficient.
HARRISONBecause sequestration just takes a blunt knife, cutting evenly across all accounts. So it cuts the good things as well as the bad things. It cuts the programs that are running efficiently and makes them inefficient, as well as the things that are inefficient and could probably use a cut. So, you know, sequestration is not the way to go about making the government more efficient. If you want to cut spending, you've got to do it in a targeted, thoughtful and strategic manner. And that's the way that you can really, you know, change the way the government operates and change the way DOD operates so that it actually is more efficient in the long run.
FISHERDon Kettl, have you seen any upside to this sequestration? Has it revealed anything about the way government work is structured that tells us anything useful?
KETTLWell, a little bit. The one thing that we have learned is that you can take a cut of this size and the world doesn't come to an end. It is clear that there's waste inside government, in fact it's clear that there's waste inside any large organization, including some private sector ones I've worked for over the course of my career. Waste is just something that happens with very large organizations doing very complex things. But as Todd was pointing out, the problem is that this is especially well designed to make sure that we never find out what's the waste and what's the smart way to be able to go about doing this.
KETTLWhatever it is that we want to do to try to reduce waste, this is just the dumbest way of going about doing it. And if we have any hope of being able to make sure we can separate out the valuable programs from the things that maybe can be cut, this is absolutely guaranteed to be the wrong way to go about doing it.
FISHERCarol Bonosaro from the Senior Executive Association, last December the Office of Management and Budget Controller said that -- told federal employees that furloughs would be a last resort. And now here are the furloughs. And now there's talk of layoffs. At what point does an agency decide that furloughs and layoffs are the best option available? And do you hear executives talking at this point about layoffs as something that they're definitely coming down the pike?
BONOSAROWell, you know, we're in the midst of situations like this typically. Agencies are looking to OMB for guidance. And what has happened through this administration is very often that guidance has been very late in coming. So it's been a matter of, well let's not think we're going to go there until the last possible moment. So in the meantime, you've got executive scrambling around trying to prognosticate, figure out what the future might bring, develop a number of different scenarios, none of them pleasant.
BONOSAROYou know, it's interesting. I want to go back to what we were just talking about because one of the distinguished executives who we had in for a session earlier this year to talk about this new normal said, good things may actually come out of this sequester. We'll find more efficiency and discover some constraints that have been self imposed. That's a very, very small light in this tunnel because I think everything -- so much now is driven by optics and an unwillingness to make those kinds of tough decisions. Whether they're made on the basis of what policies, what programs do we really want to be running? Where is the inefficiency and the waste? And we can't seem to get there.
FISHERIs that because the animus toured (sp?) federal workers has grown so large and the political polarization so deep that it's not possible to have a constructive conversation around that? Or why do you think it is?
BONOSAROWell, I think that's been the cherry on the sundae, you know, the beating that federal employees are taking in the media and often in the congress. And it certainly leaves the American public with an impression that they have a bunch of incompetents running these programs and agencies, which is hardly true. But that just contributes to the atmosphere that says, why there's plenty of waste to be cut and we can just do it across the board without any serious damage.
KETTLThere's no well-run private organization that would treat its employees in a way that they were just viewed as an unfortunate carrying cost, that they'd be better off if they could just get rid of. That just is not the way that well-performing organizations work. But in this case what's even more complicated is the fact that the executives have no choice. The law was written in a way that required across the board level cuts to the activity and program level. So if you're running an activity or a program where most of the expense is in employees, you have no choice but to engage in layoffs or furloughs.
KETTLAnd so a lot of what we've done so far is simply the product of the fact that the way the law was written in a particularly squirrely way it was never imagined that we'd be at the point of actually having it implemented.
FISHERWhen we come back after a short break, we will hear more of your calls including your stories about what it's like to be furloughed and what you do on those furlough days. And also get into questions about what is coming next as the budget battles continue in the federal government. I'm Marc Fisher sitting in for Kojo Nnamdi. We'll be back after a short break.
FISHERWelcome back. I'm Marc Fisher of the Washington Post sitting in on "The Kojo Nnamdi Show." We are talking about the furlough -- I'm sorry, the sequestration and furlough days and the impact they are having on federal workers here and around the country. You can join our conversation at 1-800-433-8850 or email us at email@example.com. Jennifer in Washington responded to our public insight network query about this topic as she said, "My agency has seven furlough days. I'm fine financially since I support only myself. But I worry about staff with larger families in lower pay grades. The problem is that I have a lot of work to do and it's hard to get things done with so many days off."
FISHERAnd Todd Harrison, are you hearing from folks in the government and in the defense and other departments that this bar against doing any work on those furlough days is really having an impact?
HARRISONOh, it certainly is. I mean, I can tell you on numerous occasions I've been corresponding by email with people in the building. And I'll get all of a sudden an auto reply that says, I'm out on furlough today, and that's it. And they can't do any work. They're not even supposed to check email while they're out on a furlough day. So no work is supposed to be done, you know, if they're to abide by the rules on this.
HARRISONSo, you know, when that happens you have no choice. You just have to wait until they get back or try to find someone else in the same office who's not on furlough that day. So, you know, the work is -- it just either builds up or gets passed on to someone else and just burdens someone else. So, you know, those are the kind of impacts that, you know, I've seen firsthand, you know, through the past, you know, several weeks of DOD working through their furlough days.
BONOSAROOr you're going to have to redouble or triple your efforts when you do come back from furlough.
FISHERHere's Megan in Baltimore. She's a federal employee. Megan, you're on the air.
MEGANYeah, that's kind of -- that was kind of my point. You know, I haven't been directly impacted by the furlough in terms of having to take time off work or losing pay. But we do have to do so much more with less in the budget. And that just creates more work. And it's not -- it doesn't create efficiency because it's not done strategically. It's just sort of the carpet's just pulled out from under you.
MEGANAnd I think, you know, it's particularly frustrating generally because when people talk about, like, Washington, you know, they're middle class people. I'm firmly middle class. And if you take money out of my hands and my co-workers' hands that's -- how is the economy ever going to recover? How are we ever going to, you know, restore the middle class that everybody talks to much about?
FISHERCarol Bonosaro, we have one Defense employee mock the idea of these furlough days and the restrictions on them, not touching the Blackberry, not touching the email. In her out-of-office automatic reply she wrote, "Today's my furlough day. I'm supposed to do 20 percent less work. You'll find out on Monday whether your email was part of the other 80 percent."
FISHERSo, I mean, there is, you know, a sort of gallows humor about this but it's got to have a corrosive effect on how people plan and how people manage. And so what -- are there -- do you see managers coming up with plans for this continuing to be a part of work policy for the government in years to come?
BONOSAROWell, as I said, managers and executors have a really, really difficult job right now. I mean, I've talked to ones who really wanted to make donations of their annual leave to people who were furloughed. In other words, find ways to particularly help the ones who were in dire financial straits. And so I am compelled to repeat again that for those who care about this, there is something called the Federal Employees Education Assistance Fund, FEEA.org, which desperately needs money now to help folks in that situation.
BONOSAROBut managers do have a tough job because they really do have to look at how this is impacting everyone. How to shift and deal with that backed-up work and still get the work done. Keep morale up even in the face of pay freezes and a lot of negative legislation, by the way, which we haven't even mentioned that the House has proposed. So it is extraordinarily difficult.
FISHERLet's hear from David in Sterling, Va. David you're on the air.
DAVIDYes. My question has to do with the federal budget. The budget for FY13 projects $2.9 trillion in revenue, about 1.5 trillion going out in nondiscretionary programs, about 2.29 trillion going out in discretionary programs. If we really want to get to a balanced budget, which I believe our country needs to do, we don't need to cut 10 percent of the discretionary spending, which is where the furloughs and other kinds of cuts are coming from. We need to cut closer to 40 percent. And how are we going to do that without completely shutting down entire programs and entire departments? I'd like to hear what your response is.
HARRISONCan I pick up on that?
FISHERSure, Todd Harrison from the Center for Strategic and Budgetary Assessments.
HARRISONSo, you know, I'm with you on balancing the budget but, you know, the key to that is balance. And there are two ways to balance a budget. One is to cut spending, okay. The other is to raise revenues. And I think realistically, you know, we are running about a 40 percent deficit -- or we have been in the past few years. Some of that is already coming down as the economy improves and tax revenues start to pick up again. But, you know, the only way to solve this is going to be a balanced approach. And that is one of the beauties of a divided government is that if anything does end up passing, it is more likely to be balanced.
FISHERBut, Don Kettl, given -- I mean, obviously people within the government are saying, look, you know, this is not working and we need to come up with a different more balanced approach. But from a political perspective, as you said earlier, a lot of people look at the sequestration and its impact and say, hey not so bad. And doesn't that simply encourage those who were in favor of the sequester in the first place to say, let's just keep doing this. Yeah, let's cut 40 percent of the discretionary spending.
KETTLAt the beginning stages of this, the plan was, well, we'll just demonstrate how bad this is and put together a sane budget for the next fiscal year. Now the politics of this has changed that you know, this wasn't quite as bad as we thought. Now we'll lock in this collection of savings and then we'll maybe throw the dice next year as well. And at some point it's clear we're going to just drive this over the cliff for starters. But it also, as David points out, doesn't really get to the basic math.
KETTLAnd the two fundamental points here, one is that at least to the degree that what you focus on the spending side you've got to focus on where the money is. And that means in the large part of the budget that is not covered by the sequestration, which is the entitlements. The other part is that, if we care about how well the entitlements are managed, we can't cut the people who are in charge of doing that.
KETTLMy single favorite statistic about the federal government is that Medicare and Medicaid combined account for 20 percent of all federal spending, but there are .2 percent of all federal employees in charge of managing that. So if you cut them back, you're going to lose your leverage on, for example, waste, fraud and abuse in Medicare and run the risk of driving spending up by tens of billions of dollars simply because you don't manage that well. And it's just not a sensible way of moving forward in the future. But we now have established what clearly is the new normal.
BONOSAROAnd there may be patches -- I mean, I think we'll see some patches as we did with the FAA, the air traffic controllers, maybe the wildfire fund, which is now depleted. So congress may run in and put a Band-Aid here and there but the net results will be as Don suggests.
HARRISONAnd, you know, the other factor too is that we've got some pockets within the federal government of spending programs that are growing, and growing at a rapid pace. But they're pretty difficult to address. An example I'll give you is the veterans benefits and services part of the budget. You know, this is managed by the Department of Veterans Affairs. It's not considered part of the defense budget. It's been largely exempt from sequestration. But those accounts, veterans benefits and services have grown from 100 billion a year when President Obama took office to 150 billion a year now. A tremendous growth in that.
HARRISONAnd you might think it's due to a lot of vets coming back from Iraq and Afghanistan. That's actually not what's driving the growth. The growth is from Vietnam era veterans. Their health care expenses are just now starting to peak. And so we're going to be working through our wave of Vietnam era veterans. We've come down the way from World War II and Korea veterans. And then, you know, 10, 20, 30 years from now we'll be working through the wave of Iraq and Afghanistan veterans. So, you know, there are parts of the budget that are just very difficult to address.
FISHERThere certainly are. And as we look at the effect of the furlough, there's that serious side. There's also a somewhat lighter side, the number of federal workers showing their creativity earlier this summer organized the Federal Furlough Five Mile Fun Run in the streets of Washington, using their time in a somewhat more constructive fashion than sitting home on the couch. And there's a new Facebook group called How I Spent My Furlough Day. And the Defense Department director who organized this new Facebook group, Crystal Fonzo-Eberhardt now joins us on the line.
FISHERAnd Crystal Eberhardt, how many folks have joined you in this effort to put a little levity into an otherwise difficult situation?
CRYSTAL FONZO-EBERHARDTWell, I would say also with my co-conspirator Beth Flores, she's the one that was really the brainchild behind the Facebook page. But together we started that and we started the fun run. And the Facebook page is about -- it fluctuates between 4 and 5,000 people.
FISHERAnd obviously this has a big impact on people in terms of their pocketbook, their time, their sense of their importance in their job and how they're perceived by their fellow citizens. But there's, in addition to that, a sense that -- I mean, how do the people who you've been talking to make any sense of the importance of the work that they do as contrasted with the attitude that they see from their fellow citizens?
FONZO-EBERHARDTI mean, I think people feel -- people that go into service for you nation, you have a strong sense of what you're doing and the import of that. I think when you start to feel that you are caught between forces that you don't really have any control over, it starts to have an impact on morale. And that's where Beth and I said, we need to do something to make sure there isn't an impact in term -- well, that the impact is less if we can do anything about it. And so then we did the furlough run.
FONZO-EBERHARDTAnd with the Facebook page what we wanted to do was try to turn something negative into something positive, or as Beth likes to say, eliminate our lemons.
FISHERRight. And I know that the slogan for the five-mile fun run was Serving the nation 80 percent of the time.
FONZO-EBERHARDTYeah, or doing our very best four days a week.
FISHERRight. But seriously, I mean, what has the impact been for you and your family? Is it mainly a financial one? Is it mainly one of just how you're being thought about by others? What seems to hit you the hardest?
FONZO-EBERHARDTI mean, I think it hits from -- the most difficult thing about this is it hits from different levels. So it does hit the wallet. Twenty percent less per paycheck is a lot. If we'd had the 11 furlough days, it would've been about 6 percent of your total annual salary. And that's not an insignificant amount. So that means there's cutbacks or, you know, you have to find where you can take cuts. So, you know, negotiate with Comcast or Verizon and say, hey, can I get a less expensive, you know, cable bill or something like that?
FISHERDo you say, hey, I'm a furloughed federal employee, give me a break?
MS. CHRISTEL FONZO-EBERHARDOh, yeah. We called credit card companies and said, hey, are you willing to, you know, for six months or whatever, give me a lower APR rate?
FISHERAnd do they?
FONZO-EBERHARDYeah. One of them was like, hey, for the next six month, zero percent interest on all new purchases.
FONZO-EBERHARDSo things like that help. And, you know, and you just cut back. Maybe you don't, you know, I'm -- I got out to eat almost every weekend, so I cut that down. I, you know, looked for a cheaper -- I can't cut my lawn, or mow my lawn because I have grass allergies, but I had -- so I had to look for somebody who can do it for less money, things like that.
FISHERThese are primarily temporary kinds of measures that you, you know, do to make ends meet. If this becomes a continuing or permanent state of affairs where there's just one cut after another, and you're working fewer and fewer days each year, what is the -- do you then say, hey, maybe I'm the wrong line of work or -- and look for something else, or what impact does that have?
FONZO-EBERHARDWell, I don't -- well, see the -- that's difficult, right? Because I'm here because a strong sense of national identity of service to my nation. And so money to a certain extent doesn't really have a role because I could have gone off in the private sector and made, you know, three times more money than I'm making now. But I'm not here for the money. So what really starts to have an impact on my morale is not being able to give a hundred percent, right.
FONZO-EBERHARDI've got four days of work at 32 hours a week when I'm normally doing about 72 hours. So now I have to figure out where are the areas that I can do excellent work on, and where are the areas that I just have to do whatever I can do in the short amount of time, and that's really, I think, what has the biggest psychological impact on me and my peers.
FISHERGreat. Well, Christel Fonzo-Eberhard, thanks so much for joining us and giving us your perspective. I really appreciate it. Carol Bonosaro, the president of the Senior Executive Association, you represent federal government executives. You just heard sort of a ground-level impact of these furloughs, and obviously if they're doing less work, they're getting the job done in a less efficient way, and when the government do its job right, the public becomes more unhappy, and so does this become kind of a snowball effect where, you know, those who thought the government was a bunch of incompetents lazy folks to start with, now that becomes more so because in fact they are doing less work.
BONOSAROWell, and it is. It's a vicious circle, and as we start to see more and more, eventually the impact of all this, that's exactly what's going to happen. It just reinforces the notion that government employees aren't terribly good, don't do a very good job, and, you know, I think humor is extremely important. Laughing a lot helps. But what I worry about is, you know, someone reading how I spent my furlough day and saying, well, see?
BONOSAROThose are the kinds of folks, they're off having a good time and they're not worried about it, and we can spare them. I mean, everything now is so driven by optics that you spend half your time worry about the optics of something as well as trying to be a prognosticator, looking down the road and thinking of all the scenarios and responding to them. You know, I'm struck by the way she's managing to deal with the impact of the cuts versus the way Congress did this, which is across the board we're not going to think about individual programs or pockets of spending.
FISHERShe's taken specific actions, and we don't see a whole lot of action from Congress. Don Kettl, dean of the School of Public Policy at the University of Maryland, more than a third of the Washington regional economy depends on federal spending. So how does a cash-strapped or reduced federal work force send ripples through the rest of our local economy?
KETTLAnd it's just a great question. We're just beginning to try to sort all this out. It's important to remember too that 85 percent of federal employees live outside Washington, and so that means that what we're about to talk about here has an effect in other parts of the country as well which is an incredibly important lesson to remember. But for every federal employee who, in the case of Christel, maybe hire somebody who's less expensive to mow the lawn, that's that much less money in that person's pocket to be able to go buy groceries, to go buy a new pair of shoes.
KETTLIf there's feedback into the banking system, that's that much less money to pump into the economy for home mortgages and for other kinds of lending activities. It just ripples through every single part of our economy from car dealerships to Wal-Mart to McDonald's to the gas station to everything that people care about, including even what vacation days that they're able to take, and what they're able to do with their families. And it's the sort of thing that everybody can say, well, you know, in the short run I can get by with a little less money, but I think what many of us are really concerned about is that this just the foundation for what may be coming further down the line.
KETTLThat this first round of cuts may be locked in, the question is how much further will it go and what long-term effect is this going to have on the ability to be able to hire really good people to do the jobs that all of us count on the federal government doing.
FISHERAnd we'll talk more about that, and we'll take more of your calls when we come back from a short break. You're listening to "The Kojo Nnamdi Show." I'm Marc Fisher.
FISHERWelcome back. I'm Marc Fisher of the Washington Post sitting in for Kojo Nnamdi, and we are talking about the sequester and its impact on the local economy and on federal workers across the country. You can join our conversation at 1-800-433-8850. And let's go to William in Fort Washington. William, you're on the air.
WILLIAMHi. I don't want to repeat what has already been discussed, but one thing that will be affected is definitely the contributions to Social Security and the fund because of the, you know, the amount of wages that have been reduced, and also, many of my co-workers, including myself have reduced the contributions to FERS.
FISHERThat's a retirement fund?
WILLIAMYes, sir. Yeah. And I think this is going to not just affect us, but it's going to affect everyone that depends on these two funds in particular.
FISHERAnd Carol Bonosaro, are you seeing a significant impact on retirement thinking, retirement plans, contributions?
BONOSAROWell, I just see a lot of our members retiring it seems to me. I wish I had the numbers. I think any business would know every day and be able to tell you how many of their employees are retiring, but the federal government can't, unfortunately. There are tremendously high rates of optional -- of retirement eligible career executives, for example, in a number of agencies, and we, again, coming back to the next generation, you know, one of the, again, the distinguished executives who was talking about the impact of the sequester and the budget process.
BONOSAROI use the term budget process loosely, of course. Saying we're in an environment of having to make some really critical decisions and decide when to take risks or avoid risk, yet, we're not training a generation of leaders to handle this problem. And I think that's going to be the slowly building impact which we're going to see longer term.
FISHERWe have an email from Betsy in Dayton, Md. saying, "My husband is an employee at NOAA. We were planning to take a big cut income, but then suddenly the NOAA furloughs were canceled. It's all about politics. Three years until retirement. I can't wait." So there is this sort of corrosive impact on people's planning and their ability to figure out whether this a career worth sticking with. Don Kettl?
KETTLFor a decade we've been talking about this enormous federal retirement boom that was going to be just right around the corner. It never really quite happened, although people gradually have been retiring. But two things have happened now. One is that the economy, and therefore the stock market, has improved, and so people who had put off retirement waiting for their savings to improve now find themselves in a stronger position.
KETTLAnd then more and more people, just at Betsy pointed out, are just saying, look, I've had it. I just don't want to continue putting up with this. I value public service. If I can't do the public service, I'm gone, and there's a risk that this long-delayed boom will catch up all at once at the very time that we're not figuring out how best to try to feed the next generation of workers in there. And that's something that over the longer haul will surely have a very serious impact on the federal government's ability to operate.
FISHERTodd Harrison, all of this uncertainty is only fed, I would imagine, by the fact that federal agencies such as the Defense Department have shifted back and forth over these last months in their public positions about the impact of the sequester. And, you know, we started out with all these dire predictions, Defense Secretary Chuck Hagel told employees to expect as many as 22 furlough days this summer, then it dropped to 11, and then to six. What do you think of the impact of these constantly changing expectations is?
HARRISONWell, the biggest impact is a negative one, and it's political. You know, DOD especially, you know, in the year and a half leading up to sequestration, they really went over the top with some of the rhetoric, talking about, you know, how it would make our military, you know, a second rate military power. Well, you know, of course, second to whom, you know. And they were talking about how they'd have to cancel major programs, they'd have to cancel the Joint Strike Fighter program, the large acquisition in DOD.
HARRISONOf course, it was largely untouched by sequester as it turned out. They talked about the terrible furlough days, you know, all these, you know, big impacts. And if you kind of read the footnotes of a lot of that language, they were hinting there that well, this is conditional. This is if we have a full year continuing resolution, which has not happened for DOD in recent memory. If we have a full year continuing resolution, and we have sequester, and we get no reprogramming authority, so we can't move around money between accounts to fix things, if all of those things prove true, then some of these things would have happened, if not this year, over time they would have eventually happened.
HARRISONWell, you know, they said all this in the hopes that they could scare Congress into turning off the sequester. Well, that didn't work. Their bluff was called. And now their credibility is harmed, quite frankly. And I think going into next year, I think all of this actually makes the sequester continuing in 2014 more likely than not at this point. I think we're likely to go in -- I mean, the new fiscal year starts October 1, you know, just more than a month away, and I think we're likely to hit the sequester again in 2014 because of this.
FISHERAnd we have a tweet from Bachti (sp?) saying "The budget has changed how we work such that a lesser quality product is already being planned. This will long-term effects." So we're seeing again and again indications of this hit in morale, and apparently there have been some early studies that have actually looked at morale and it's -- there's a government-wide employee satisfaction score that is reported this year at 61 out of a hundred, which is the lowest point since 2003 when the rankings were first launched.
FISHERSo there's a measurable decrease now in morale, and that's got to have an effect on hiring as well. I mean, you know, outsourcing and privatization, you're seeing more people who want to go to work for Deloitte rather than a government agency. They're going to be paid more, and they have more consistent security.
BONOSAROThat number is going to drop some more because that survey is about a year old by now. I think one of the most disappointing things to those of us who work in this arena has been the lack of the -- or the administration's response, or lack thereof, to federal employees. There just is not a sense that the administration's on their side or stands up for them or speaks out when there are truly strange and almost lunatic proposals discussed in Congress.
BONOSAROThere's not the sense of the boss really understands the burden we're carrying, cares about it, is supportive of us, and even though in the face of everything we've been talking about that may not seem like much, it does mean something, and I think it's a real loss that the administration has failed to do that.
KETTLAnd one of the problems now is that suppose that I'm a 25 year old, and I decide that I really am committed to government service. I want to try to do my best for my country, and so I want to try to get a job for the federal government. I find out well, there's a furlough, and because of the furlough nobody's hiring because nobody wants to be hiring new employees at the time that other employees are being either let go or not being paid. And so that creates the possibility of a hiring freeze.
KETTLWhen is it going to be lifted? I'm not sure. You can apply, we'll interview you, we'll see if it could work out. And at some point, if I've got an overhang of student loans, and I need to try to find a way to pay my rent, I'm going to have to go look for another job in some other place, and the federal government stands on the verge of losing a large number of very highly committed and very highly skilled workers at precisely the point they're going to be needed in five years to be middle managers and in 10 or 15 years to be senior executives.
KETTLAnd that's a loss, the way we have the system structured, from which we're not easily going to be able to recover.
HARRISONAnd can I add one thing to that?
HARRISONAlso, if, you know, the government does hire a new person right now, and we continue in this budget stalemate into next year and the year after, I know DOD is already looking at the fact that they're going to have to do layoffs, what's called a reduction in force. And if you look at the rules that are in effect for how they have to conduct those layoffs, there are four factors they have to consider when they're figuring out who to let go. The first factor, most important factor is tenure.
HARRISONIf you have higher tenure you get to stay. The people with less tenure are the ones who will be the first to go. The last of the four factors being considered is performance, merit. So just, you know, the rules are going to lock government agencies in so that any new people that they have brought on recently, no matter how good they are, no matter who skilled they are, no matter how talented they are, they're going to be the first ones let go.
FISHERAnd Carol Bonosaro, just very quickly in the few seconds we have left, there are a number of federal employees who are appealing their furloughs, several -- more than 30,000 of them. What's going to happen with those?
BONOSAROWell, the Merit System Protection Board is obviously dealing with that onslaught, and trying to sort them and combine them and see what they can do. Obviously those employees had the perfect right and ability and to file those appeals. The Merit System Protection Board, however, is going to have to slog through them. Whether it will make any difference in the end whatsoever is another matter.
FISHERCarol Bonosaro is president of the Senior Executive Association which represents federal government executives. We've been joined on the phone by Todd Harrison, senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments, and Don Kettl is here in studio. He's the dean of the School of Public Policy at the University of Maryland and a senior fellow at the Brookings Institute. I'm Marc Fisher of the Washington Post sitting in for Kojo Nnamdi. Thanks so very much for joining us.
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