Industry, Government Worker Unions Concerned by Possible FCC Sequestration Cuts

Salaries and expenses for the NTIA also would face an 8.2 percent cut, or $4 million, under sequestration. The agency’s state and local implementation fund would undergo a 7.6 percent cut, or $5 million, and the sequester would cut the agency’s public safety trust fund by 7.6 percent or $8 million. NTIA programs exempt from the sequester are: Public telecom facilities; planning and construction; information infrastructure grants; the DTV transition and public safety fund; and the network construction fund.

The sequester would mean an 8.2 percent cut on Rural Utilities Services, equal to $3 million from the rural electrification and telecom loans program account, and $3 million from RUS’s budget for distance learning, telemedicine and broadband programs. The rural electrification and telecommunications liquidating account would be exempt from the sequester, the Office of Management and Budget report said.

The OMB report spells out what steps Cabinet-level and quasi-independent regulatory agencies of the executive branch would need to take to cut pay and other expenses if Congress doesn’t avoid sequestration before 2013. The report noted that the USF is exempt from the sequester, but the FCC’s spectrum auction program account would undergo a 7.6 percent cut, or $300,000. OMB based its analysis on agencies’ FY 2012 budgets and noted that Congress had not passed any appropriations bills for FY 2013.

The sequester, an automatic, ten-year, $1.2 trillion across-the-board budget cut that begins in January, was required by the Budget Control Act of 2011 (http://xrl.us/bnoiym). The cuts were intended to provide incentive for the Joint Select Committee on Deficit Reduction to achieve $1.2 trillion in savings, which the bipartisan panel of House and Senate members ultimately failed to do (CD Nov 15 p1). The administration report, required by the Sequestration Transparency Act (http://xrl.us/bnoi4h), was released by OMB a week after the law’s 30-day deadline.

Senior administration officials hoped Congress would act to avoid the sequester, because if lawmakers fail “it would have a significant impact on the federal workforce,” they said during a media call Friday. The officials spoke on condition they not be identified. FCC, FTC, NTIA and RUS spokesmen did not comment.

The Independent Telephone and Telecommunications Alliance’s Paul Raak was concerned sequestration would force FCC staff “to do more with less,” said ITTA’s vice president of legislative affairs. The report “rightfully, acknowledges that the Universal Service Fund is exempt from sequestration, which demonstrates to Congress and to the public that the Fund is revenue neutral to taxpayers and to the Treasury,” he said.

It’s tough to get a clear picture on exactly how the cuts will affect staff levels at the FCC, said Center for American Progress’s Scott Lilly. “The first question that has to be answered is whether that cut can be accomplished through furloughs and without” federal layoffs, he told us via email. “If it is necessary to do a reduction in force (RIF) the savings per slot elimination will be small -- definitely less than 30 percent since RIFs require a formal procedure that delays the final payroll date and because those being RIF[ed] are eligible for pay of unused sick leave and vacation time as well as other separation benefits. Cutting $28 million from the FCC between January 2 and September 30 would require slightly less than an 11 percent reduction in payroll. If you get only a third of the money for each position eliminated it would require a 33 percent reduction in staffing. Furloughs would require less severe reductions but I don’t think anyone is certain at this point how extensively furloughs can be used. Even furloughs would have significant implementation costs which would force the amount of time that the typical employee would have to be furloughed [to] be greater than 11 percent,” he said.

The sequester will be “very tough medicine” for federal employees, said George Hoagland, Cigna vice president-public policy. Cigna is an investor-owned health service organization. The FCC has roughly 1,600 employees, down from a high of 2,300 employees in 2004, an NTEU representative told us (CD Sept 7 p1). The FTC employs nearly 1,200 employees, RUS has 298 and NTIA has 275, agency spokesmen said.

The OMB report confirmed the “devastating impact sequestration would have on federal jobs, our fragile economic recovery and the vital services Americans depend on,” said President Colleen Kelley of the National Treasury Employees Union. NTEU represents FCC and Commerce Department employees, among others. If the cuts go unabated, federal agencies would be forced to either furlough or lay off “thousands of workers, threatening the safety and security of the public,” she said. “We know that many federal agencies are already struggling with insufficient resources,” said Kelley. “People could soon go to the government offices and find longer waits and shorter hours, while out-of-work federal employees will only add to the long unemployment lines and the burden on local communities and state governments.” Sequestration would have a “ripple effect” on businesses that could send the U.S. economy “into a tailspin,” she said.

Justice Department Antitrust Division salaries and expenses would undergo an 8.2 percent, or $3 million cut under sequestration. It would also slash $7 million from DOJ’s budget for tactical law enforcement wireless communications and information sharing technology. The Department of Homeland Security would undergo an 8.2 percent, or $39 million cut to its departmental operations budget. The sequester would also cut 8.2 percent, or $1 million from the Department of Transportation’s cybersecurity initiatives.

FTC salaries and expenses would be subject to an 8.2 percent cut, or $26 million, OMB said. The sequester would also cut the National Institute of Standards and Technology’s budget by 8.2 percent, with a $47 million cut for the agency’s scientific and technical research services, a $5 million cut in funds for NIST research facility construction and a $10 million cut for industrial technology services. The agency’s working capital fund would be exempt under from sequestration, OMB’s report said.

The Broadcasting Board of Governors would face an 8.2 percent cut under sequestration, slashing $61 million from the its budget for international broadcasting operations and $1 million from its budget for broadcasting capital improvements. Corp. for Public Broadcasting funds would undergo an 8.2 percent cut, or $36 million. Salaries and expenses for the Privacy and Civil Liberties Oversight Board are also sequestrable, though OMB’s report didn’t specify what percentage or amount. The White House Office of Science and Technology policy would be subject to an 8.2 percent budgetary cut.