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Labor Cost Management Is Key to Coping With Sequester at Agencies

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A KLM Royal Dutch Airlines jet taxis into take-off position as cars enter Los Angles International Airport on Monday. Delays have been reported at some airports because of the furloughing of air traffic controllers under the sequester.

This may be small solace to airline passengers waiting out delays at airports in Los Angeles and New York, but the general consensus in Washington is that the real pain from budget cuts under the sequester may not be felt until the end of the summer or even next year. That’s because managers of federal agencies are using whatever flexibility they can, according to officials at agencies and unions representing workers, to cut down on furloughs to minimize disruptions in services.

It’s a common-sense approach, but for managers at federal agencies it also presents something of a double-edged sword: The better they can patch together solutions over the coming weeks, the more palatable the automatic, across-the-board spending reductions will appear to the public. And that means agencies will be more likely to have to live with the tighter budgets and smaller staffs that the sequester has brought them.

“The more pain, the more transparent it is that the cuts are problematic,” said Sharon Parrott, vice president for budget policy and economic opportunity at the Center on Budget and Policy Priorities.

The recent budget control laws (PL 112-25, PL 112-240) lowered the cap on regular discretionary spending to about $984 billion in fiscal 2013 from $1.043 trillion in the previous budget year and is slated to knock it back to $967 billion for fiscal 2014.

The workforce is the most obvious target for those cutbacks. Total personnel costs, including pay and benefits, were $458.4 billion in fiscal 2012, according to the Office of Management and Budget. That’s up from fiscal 2011, when total personnel costs were $432.6 billion, of which $299.57 billion went for civilian employees.

That’s why management of labor costs, by far the largest single cost within government operations, is central to coping with the sequester at government agencies.

That was evident to the traveling public in the past week, as the first furloughs at the Federal Aviation Administration led to lengthy delays at Los Angeles International and New York-area airports. FAA data showed that there were almost double the number of delays on Monday as there would have been without the furloughs. About 1,200 were attributable to staffing reductions, the agency said in a statement.

Experts say those delays may be only the start of problems at agencies as they roll out furloughs, one day every two weeks for employees at most agencies and perhaps once a week for workers at the Department of Defense, the single largest federal employer.

“We’re seeing some broad outlines, but we’re not seeing the negative impact right now,” said Peter Winch, deputy director of field services at the American Federation of Government Employees, which represents about 650,000 workers.

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