* Washington operations to continue March 1 amid budget cuts
* Layoff notices most likely first move
* Democrats, Republicans eye sequester replacement
By Richard Cowan and David Lawder
WASHINGTON, Feb 19 Just as computers worldwide
did not crash on Jan. 1, 2000, in the "Y2K" scare and Earth
itself did not shatter on Dec. 21, 2012, as some interpreters of
the Mayan calendar predicted, March 1, 2013, will not be
remembered as the day the U.S. government disintegrated.
The Obama administration and even some Republicans are
warning of mass government layoffs and services collapsing when
"sequestration" begins in 10 days, unless a gridlocked U.S.
Congress finds a way to circumvent the start of the $85 billion
in federal budget cuts.
But what actually happens on March 1?
"Nothing. Nothing happens," said a senior congressional aide
who is keeping a close eye on the looming budget cuts.
While that might be somewhat of an exaggeration, the
immediate impact is seen as minimal due to several safeguards,
official and unofficial, that will keep the spending cuts from
hitting Americans like a meat cleaver on March 1.
Senior administration officials on Tuesday had no concrete
examples of what would immediately befall the country when the
cuts begin. Ultimately, however, they would pare everything from
military programs to space exploration between March 1 and the
end of the fiscal year on Sept. 30. Food inspections, air
traffic control, law enforcement and education programs also
would be among those hit.
"This moves forward on a rolling basis," White House budget
office controller Danny Werfel acknowledged last week after
testifying to Congress, explaining that the full force of the
$85 billion in cuts would not be felt immediately. But, he
cautioned: "It's very harmful as you go forward. On a
seven-month time frame you're going to see the effects
Senior administration officials said Republicans would be
blamed for cuts that did come into force.
If allowed to run their course, the austerity measures could
cost 750,000 jobs and keep weak economic growth stunted for the
rest of 2013, the non-partisan Congressional Budget Office
These spending cuts, decided in 2011 amid a fever in
Congress for deficit reduction, were meant to be so painful that
they would goad Republicans and Democrats into reaching an
alternative agreement on where to cut back. The cuts "will visit
hardship on a whole lot of people," President Barack Obama
warned on Tuesday.
And they are only the first installment in a decade's worth
of required cuts totaling $1.2 trillion.
While some furlough notices will be issued to government
workers, there will be few outward signs on March 1 that the
cuts have been launched.
Under the law, retirees are shielded and so their Social
Security checks will arrive on schedule at the beginning of
March and every month thereafter. Similarly, the elderly and the
disabled will not see their federally backed Medicare healthcare
curtailed at all over the seven months.
Every U.S. soldier will get paid and the Defense Department
will be allowed to shift funds to ensure that combat operations
and "critical military readiness capabilities" are not degraded,
according to the Obama administration.
Unofficially, many members of Congress are betting that a
few weeks into the automatic spending cuts, Democratic and
Republican leaders will get serious about negotiating a
replacement to the sequestration and the $85 billion in spending
cuts will not have had time to really bite.
And so on March 1 and in the days immediately after, while
no dramatic shakeup is anticipated, there will be some early
* Government agencies are likely to issue 30-day warnings of
impending furloughs of government workers. They could be told
that starting on April 1 they will have to stay home for a
maximum of 22 days between March 1 and Sept. 30.
* New government contracts could slow in anticipation of no
deal being reached to replace the sequestration. This would hit
defense contractors and road and bridge builders alike.
* Members of Congress, who are not exempt from the spending
cuts, will be advised to begin preparing their staffs for either
salary cuts or layoffs if they have to shave funds from their
approximately $4 billion in annual appropriations.
* Medical research labs at universities that rely heavily on
federal funds will begin deciding which projects to abandon or
curtail, if they haven't already.
* Every federal agency will have to finalize their plans on
how to execute the across-the-board spending cuts.
At this stage, most planned furloughs are being held to 22
days per federal employee. Anything longer is considered a
formal layoff and requires more complex legal hurdles, some
involving seniority, to be met.
In some cases, furlough notices won't go out until terms are
negotiated with employee unions after March 1. Not all
union-government contracts cover such actions, said Carl
Goldman, executive director of AFSCME Council 26, which
represents 8,500 federal workers from building engineers to
"The biggest thing we can do is to negotiate over the
scheduling of furloughs, how much choice employees will have in
selecting days furloughed," Goldman said.
Over the seven-month period, a 22-day furlough would roughly
equal about one day per week, reducing workers' income by about
Congress, showing little sense of urgency, is now on a
week-long "Presidents Day" recess.
When members of the Senate and House of Representatives
return next week, they will begin feeling each other out for a
remedy by March 27, when another budget deadline hits: the need
to replenish federal funds for all government agencies.
That is a separate fight in Congress but it might become
mixed in with the sequestration battle as fiscal issues come to
Last week, Senate Democrats unveiled their plan to replace
the sequestration with a combination of agriculture subsidy cuts
and higher taxes on the richest Americans.
Senate Republicans, warning that they will reject any new
tax increases, have not yet settled on a plan. But several are
circulating, including replacing the sequestration with
different spending cuts, giving federal agencies more
flexibility in how they would carry out the existing $85 billion
in cuts, or reducing the federal workforce by 10 percent through
Before going forward with any plan, Republicans might have
to quell an uprising within their party that has some
conservatives hoping that the meat-ax approach stays, thus
ensuring some serious deficit reduction this year.