HAI’s HELI-EXPO® will not be affected by sequestration. Many have come out as skeptical of the effects of sequestration, mainly the false notion that federal layoffs will begin immediately. Due to federal work rules, it will be 30 days before any furloughs take effect, meaning that those traveling to HELI-EXPO should experience no travel interruption as a result of furloughed TSA workers or air traffic controllers.
President Barack Obama has until midnight March 1 to send out official notice to agencies about sequestration related layoffs, and Washington is just beginning to really focus on which programs, human resources, and grants will be cut.
The Washington back-and-forth continues. Sequestration is better, in Republicans view, than the alternatives that Democrats have proposed. And democrats believe it is better than what Republicans have offered.
How will sequestration impact the economy? Many experts say the economy will improve if the political stalemate does not leave the sequester cuts in place indefinitely, cause a government shutdown, or lead to a default on the debt ceiling early this summer. However most economists agree that the sequester will not cause a catastrophe for the country’s economic outlook.
If Congress keeps the sequester cuts in place for a few months, then the economy will start to feel the effects. Federal workers furloughed for as many as 22 days between now and the end of the year will face a pay cut of as much as 20 percent. This will have ripple effects throughout the economy on consumer spending as well as state income and sales taxes.
Attention has now immediately shifted to how Congress can avert a potentially calamitous government shutdown on March 27, when a stopgap continuing resolution, or CR, expires.
Senate Majority Leader Harry Reid has said Democrats would wait to see what the House produces before making decisions on how to proceed on the CR. Leaders in both parties seem determined not to use any extension of the CR as a vehicle to change the cuts significantly. But they could possibly provide incremental relief to agencies by updating their appropriations, from which the cuts are made.
The House of Representatives is already moving in this direction with a draft CR that would include a full-year budget for the Defense Department, for example. Senate Democrats will want to expand on this to include domestic agencies as well.
At 11:59 p.m., the White House Office of Management and Budget (OMB) will simultaneously transmit a report to Congress detailing cuts in every affected agency’s budget account. President Barack Obama must actually issue an order to trigger OMB’s actions.
Once the order goes out, agencies can officially begin issuing furlough notices to many of the federal government’s 4.4 million workers, though there will then be a 30-day waiting period in most cases before the furloughs actually take effect. However, there has been some confusion on the timing, and some agencies could start issuing their furloughs during the day Friday anyway. The Office of Personnel Management issued guidance on furloughs in January that stated simply that the sequester would take effect on March 1, 2013.
Some preliminary estimates of the damage include 12 furlough days at the Bureau of Prisons, 13 at the Environmental Protection Agency and 15 at the Agriculture Department. Forced days off will mean cuts in annual pay of about 10 percent. Uniformed military personnel as well as employees at the Department of Veterans Affairs and the U.S. Postal Service are exempt from the furloughs.
The Office of Management and Budget issued guidance to agency heads this week in a memo entitled "Agency Responsibilities for Implementation of Potential Joint Committee Sequestration." Conferences and bonuses have been a source of consternation for the White House since a scandal involving the General Services Administration in which the bizarre and expensive happenings of a 2010 conference in Vegas did not stay in Vegas and agency employees took home under-reported big-dollar bonuses.
On Feb. 28, White House Press Secretary Jay Carney said he did not expect the Obama administration to release its budget until March, partly because of sequestration and other budget battles with Congress. The White House delivered its budget on time only once in the last four years, in 2010.
The sequesters’ automatic spending cuts mean a double-whammy for aviation: First the FAA would have to furlough workers, which means air traffic controllers will support fewer flights. Then the drop in flights would force the FAA, airports and municipalities to take hits to their bottom lines as fewer tax revenues come in.
The FAA brings in about $15 in taxes per seat, DHS collects a $5 post-Sept. 11 security fee for each passenger on a round-trip flight, local cities and counties receive revenue from passenger takeoff and landing fees and airports can collect up to $4.50 per passenger for improvements. But calculating precisely how much revenue will be lost is not a matter of simple algebra. The FAA has not released details about exactly how many flights could be grounded because of furloughs of its air traffic controllers, and the airlines too have been equally tight-lipped. And passenger excise taxes are based on a percentage of a ticket’s price, which can rise and fall based on demand. FAA officials declined on Feb. 28 to discuss potential lost revenue.
So what’s next? If there is an overwhelming outcry of opposition that lights up the phones across the Capitol in Republican and Democratic offices alike, Congress could be forced to make a genuine attempt at bipartisan negotiations to come to a mutually agreeable solution.
If public outrage is strong and lawmakers feel they have to avert sequestration but cannot negotiate a substitute, they could attempt to put off the cuts - at least for the rest of the year.
If the public reaction is more annoyance than groundswell, if support grows for taking some bold action to harness spending, or if lawmakers make an attempt to tweak the sequester but fail to come to an agreement, the cuts could very well end up staying in place.
Given the lack of bipartisan action in recent months, some experts say that keeping the sequester is not an unlikely scenario. After all, when sequestration was devised as part of the 2011 debt-ceiling deal, no one envisioned that the day they took effect would actually come.