Friday, May 31, 2013

AFGE Week in Review - Agencies Ordered to Come up With 10% Cuts in FY2015

May 31, 2013

Agencies Ordered to Come up With 10% Cuts in FY2015: Federal agencies have been directed to reduce their 2015 budgets by 5% of the discretionary funding provided for them for fiscal 2015 in the fiscal 2014 budget proposal released last month. Agencies should also come up with an additional 5% reduction to give the White House more options of what should be cut, said Office of Management and Budget Director Sylvia Burwell in a May 29 memo to agency heads.

“We have not had the regular order budgeting process that we would prefer, and I understand the compounding challenges that agencies face in continuing to provide vital services and protect mission in an environment of sequestration,” she wrote in the memo. “These challenges have only increased the president's resolve to work with Congress on restoring regular order and replacing sequestration with a balanced deficit reduction plan of additional spending cuts and sensible entitlement reforms coupled with revenue from tax reform. The 2014 Budget included such a balanced approach with more than enough deficit reduction to cancel sequestration and restore discretionary funding to levels agreed to in the bipartisan Budget Control Act.”

To come up with the cuts, Bowell suggested agencies look for ways to “reduce fragmentation, overlap, and duplication, and increase effectiveness.” They should come up with recommendations that also address the Government Accountability Office’s concerns. Agencies are also directed to identify new agency priority goals for the fiscal 2014-2015 that “represent the administration’s top implementation-focused priorities and ambitious, measurable, near-term results” and submit them to OMB by June 3.

EPA Cuts Back on Projected Furlough Days: The Environmental Protection Agency (EPA) this week announced that the total number of furlough days will be reduced to seven from the original number of nine. The agency scheduled the furloughs in two phrases – four days between April 21 and June 15, followed by a re-assessment period to see whether a second phrase of five days is necessary. Thousands of employees have already served the four furlough days. They will have to take three more unpaid days off this fiscal year, including July 5 and August 30 when the agency will be closed to the public.

“Now that we have an operating plan in place, I can announce with certainty that we will not need to implement as many employee furlough hours during Phase Two as we initially feared,” Acting Administrator Bob Perciasepe said in a memo to employees.

Park Police Cancels Furloughs: The National Park Service last week announced it has found a way to achieve savings, and so the furloughs of U.S. Park Police officers will end June 1. The officers have taken three furlough days since sequestration hit March 1.

White House Proposal Capping Contractor Payments Falls Short: The Obama administration’s proposal to lower the cap on government contractor compensation doesn’t go nearly far enough to level the playing field between lavishly paid contractors and front-line federal workers. Earlier this year, as part of its fiscal 2014 budget submission, the administration said it would urge Congress to cap payments to government contractors at the Vice President’s salary, currently $230,700, expanding on a proposal that had been included in the Senate’s version of the 2013 National Defense Authorization bill. But the proposal announced on Thursday by the Office of Management and Budget would set the cap at the President’s salary, currently $400,000, far more than what OMB had proposed in its budget just one month ago. In addition, agencies would be able to ignore the cap entirely if they determined they couldn’t recruit and retain employees with specialized skills. The new cap also wouldn’t go into effect for 180 days after being signed into law. It should be noted that the $400,000 cap would exclude contractors working under fixed-price contracts, which account for 60% of the government’s annual spending on service contracts, and instead apply only to cost-reimbursement contracts.

“The administration’s effort fails to impose meaningful sacrifice on contractors and seems like a half-measure designed to stave off real reform that would save taxpayers significant amounts,” AFGE National President J. David Cox Sr. said. “While federal employees and other working- and middle-class Americans are being forced to make enormous sacrifices again and again, this new, weaker proposal is downright insulting.”

Hostile Amendments Promise More Bad News for DoD Civilians: House lawmakers are not done scapegoating Defense civilian employees. On June 5, the House Armed Services Committee will consider some very hostile amendments to the fiscal 2014 National Defense Authorization Act, which will then be considered by the full House the following week. AFGE is working with its Locals to reach out to House representatives to reject these anti-job measures:

  • NO on more arbitrary downsizing: An amendment to further downsize the DoD civilian workforce, which would likely lead to massive reductions-in-force next year (Rep. Mike Coffman of Colorado);

  • NO on bringing back A-76: An amendment to end the current ban on the A-76 outsourcing process, which we beat last year (Rep. Scott Rigell of Virginia);

  • NO on starving civilian employees of new work: An amendment to prevent new work and outsourced work from being assigned to civilian employees, which we beat last year (Rep. Mike Coffman of Colorado);
  • NO on giving to contractors all commercial functions performed by military personnel: An amendment to automatically give commercial functions performed by military personnel to contractors even when using civilians is cheaper (Rep. Mike Coffman of Colorado);
  • NO on making it easier for contractors to perform important and sensitive jobs: An amendment to transfer to contractors important and sensitive functions such as budget preparation, regulation development, and contract oversight. A 2008 law requires that these jobs, known as work that is closely associated with inherently governmental functions, should be performed by civilian employees as much as possible. But this amendment would allow these jobs to be outsourced if they are supervised by the government. (Rep. Scott Rigell of Virginia)

What AFGE Supports in 2014 Defense Authorization Bill: AFGE is working with friendly lawmakers to have the House Armed Services Committee consider AFGE-endorsed amendments to the fiscal 2014 Defense Authorization bill.

  • YES on subjecting service contract spending to the same cap that already applies to civilian personnel spending. The most important component of these amendments would extend the cap on service contract spending through FY15. Civilian personnel spending is capped through FY2018.  If service contract spending is not also capped, then DoD will inevitably shift work from civilians to contractors. That’s not downsizing. That’s simply shifting work from civilians to contractors at the same or higher costs. If civilians are capped, then contractors should also be capped. That’s just basic fairness. No lawmaker can contend that he or she is not choosing sides if they allow DoD to maintain a cap on civilian personnel spending while allowing service contract spending to go uncapped. 
  • YES on insisting that DoD clean up at risk contracts. AFGE will also be supporting an amendment that would require DoD to correct all of its at risk contracts: no more contracts for inherently governmental functions, no more unauthorized personal services contracts, and all closely associated with inherently governmental functions must be reviewed to determine whether the work should be insourced. 

Want to know more?  Contact AFGE’s John Threlkeld in AFGE’s Legislative Department at 

The Rich Get Lion’s Share of Major Tax Breaks: As hundreds of thousands of federal employees are being forced to take leave without pay for up to 11 days and have been subjected to the third year of pay freezes, a newly released Congressional Budget Office report is a cause for outrage.  The new CBO analysis found that the richest 20 % of households get more than half of the overall savings from the 10 most significant tax breaks with 17% of all savings going to the wealthiest 1%. These 10 largest tax breaks cost the Treasury about $900 billion this year and will cost nearly $12 trillion over the next decade. House Budget Committee ranking member Chris Van Hollen pointed out that while the rich are reaping all these benefits, DoD school teachers will be furloughed for five days to help reduce the deficit.

“We think it’s important to decide whether we want to prioritize education for the kids of our servicemen and women or tax expenditures for the top 1 percent,” Van Hollen told reporters.

The major tax breaks that mostly benefit the wealthy and upper middle class are the low capital gains tax rate, the tax-free treatment of employer-provided health insurance and retirement contributions, tax-free contributions to retirement savings, deductions for mortgage interest and charitable contributions. Only a few tax breaks such as the tax-free treatment of Social Security benefits and the child tax credit go to lower-income households.

AFGE Files FOIA over VA’s Use of Healthcare Dollars on TV Ads: AFGE has filed a Freedom of Information Act (FOIA) request with the Department of Veterans Affairs regarding the use of agency resources to air television advertisements in Veterans Integrated Service Network (VISN) 4, which has been embattled in controversy surrounding a recent Legionnaires’ outbreak. The union’s FOIA request asks the VA to provide information on the total cost of the ads, documentation on the need of such advertising, and what outcome the agency is seeking as a result of the project. AFGE has been critical of the leadership of VISN 4 Director Michael Moreland and has repeatedly called for his resignation.

"It seems to be one scandal after another when it comes to Mr. Moreland," said AFGE District 3 National Vice President Keith Hill. "What does it say to the families of the victims who died after contracting Legionnaires disease at a VA facility that the man who oversees that facility is starring in TV ads promoting the VA? It’s an outrage."

"Our veterans depend on us to provide the best care possible in return for their service to our nation," said AFGE National VA Council President Alma Lee. "When the VA diverts precious healthcare dollars away from patient care for TV ads that feature controversial agency officials, it calls into question the agency’s commitment to our nation’s heroes while forcing doctors, nurses, and hospital staff to do more with less."
AFGE has requested that the VA respond to its FOIA request by June 19, 2013.

Watch this excellent Anderson Cooper 360° piece on how Moreland had mishandled the issue, which led to five deaths of our country’s veterans, but got performance bonuses in 2011 and 2012 anyway.

State, Local Governments Start to Bring Outsourced Work In-House: Contrary to popular belief, outsourcing doesn’t always lead to better services or savings. In fact, the opposite is true and local and state governments across the country have started to notice. They have even brought the work back in house, as documented in a new report by In the Public Interest, a research group for sourcing issues. The report includes examples of how cities and states save money and improve public services and assets by insourcing. New York City in 2011, for example, insourced much of its technology work, saving New Yorkers $100 million by consolidating server rooms and an additional $25 million by employing talented city staff. Evansville, Indiana, ended its long-term water and sewer privatization contract with American Water in 2010, shortly after the private company underwent a lawsuit from the Environmental Protection Agency involving untreated sewage leaked into a nearby river. The city estimated that ending the privatization will save the city $14 million over a five-year period and foresaw increased autonomy for the public to invest in the quality of the water system while preventing steep rate increases. Prompted by a lawsuit over the horrific condition of the prison health care system, Ohio brought prison medical services in-house, saving $7.2 million in prescriptions alone. Insourcing also helps improve medical treatment as inmates get to see the same medical staff at each visit, which was not the case with the contractors.

“Federal agencies should be conducting cost-based insourcing just like these local governments,” said AFGE National President J. David Cox Sr. “If dollars are tight, why continue to subsidize costly and inefficient federal contractors?”

Majority of Americans Don’t Believe Disaster Relief Aid Should Be Offset: According to a new Washington Post/Pew Research Center poll, 59 percent of Americans want the government to spend money on disaster aid without having to offset it with spending cuts somewhere else in the budget. Only 29 percent of the public wants the offset.

During the past few years, more lawmakers have called for cuts elsewhere in the budget whenever a natural disaster strikes and Congress needs to appropriate funds to help with emergency relief efforts. Sen. Tom Coburn of Oklahoma came under fire last week when he insisted on the offset if emergency funding is needed for victims of the deadly tornado that killed dozens and injured hundreds in his home state. Coburn had voted against the Sandy relief package earlier this year, but thanks to other lawmakers, the Sandy bill passed and part of that money is now being used to help the victims in Oklahoma.

New Discount Program Just in Time for Summer! AFGE members can now get discounts of 30-35% off main gate prices for Six Flags Theme Parks! Log into the AFGE/Six Flags site to buy tickets with substantial savings off the main gate price. This online benefit program offers not only substantial savings, but allows you to "print and go" so you have your ticket in hand when you get to the park with no waiting in the line to purchase tickets.

This Week’s Editorial: The New York Times points out in its May 25 editorial that rampant corporate tax avoidance may not be illegal but that doesn’t make it right or fair. Worse, it’s not clear that lawmakers want to stop it.

“A tax holiday in 2005 dropped the rate from 35 percent to 5.25 percent, enticing corporations to repatriate some $300 billion. It was billed as a way to create jobs and boost investment, but it was a total policy failure. The repatriated money was mostly used for dividend payments, share buybacks (which tend to raise executive pay) and severance pay for employees laid off in corporate restructuring. The holiday rewarded aggressive tax avoidance, with 77 percent of the repatriated profits coming from tax haven countries, according to the Government Accountability Office. Worse, that tax holiday encouraged American companies to come up with even more ways to shift profits abroad in anticipation of a second tax holiday. Since the last holiday ended, profits held in foreign countries have skyrocketed, according to expert testimony at the tax avoidance hearings in the Senate last year. American corporations now have an estimated $2 trillion stashed abroad.”

This Week’s Tweet: “Let's honor our war dead by giving proper benefits to our war living.” ~ Andy Borowitz‏ @BorowitzReport
This Week in Labor History: May 31, 1997 - Rose Will Monroe, popularly known as Rosie the Riveter, dies in Clarksville, Ind. During WWII she helped bring women into the labor force.

Hot on WWW: 50 Things That Look Just Like Your Childhood.

Inside Government: Tune in now to AFGE’s “Inside Government” for more on the union’s fight against federal employee furloughs. The show, which originally aired on Friday, May 31, is now available on demand.

  • AFGE National President J. David Cox Sr. encouraged furloughed federal employees to file appeals with the Merit Systems Protection Board and discussed the impact of furloughs on morale, personal finances, and the economy.
  • Dave Cann, director of AFGE’s Field Services and Education Department, highlighted furlough resources available to AFGE members including a furlough toolkit, MSPB appeal workshops, and a sequestration hotline.
  • AFGE Assistant General Counsel Matt Milledge then detailed the appeal rights of federal employees who receive furlough notices.
  • AFGE Defense Conference Chair Don Hale argued against the Department of Defense’s decision to furlough civilian employees and differentiated between targeted cuts and across-the-board cuts. 

Listen LIVE on Fridays at 10 a.m. on 1500 AM WFED in the D.C. area or online at For more information, please visit

Quote of the Week: House Budget Committee ranking member Chris Van Hollen on the new CBO report detailing how the rich get the lion’s share of the largest tax breaks:

“We think it’s important to decide whether we want to prioritize education for the kids of our servicemen and women or tax expenditures for the top 1 percent.”

American Federation of Government Employees, AFL-CIO 80 F Street, N.W., Washington, D.C. 20001 | Tel. (202) 737-8700 | Fax (202) 639-6492 |

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