The Defense Department's announcement that it can reduce civilian furloughs will be welcome news to those who have been forced to cut 20 percent of their pay since July, but could prompt a nightmare situation further down the road.
The 11 furlough days on Department of Defense civilian workers will be reduced to six, Secretary Chuck Hagel announced Tuesday. The once-per-week furloughs started July 8, meaning these employees only have one more week of the forced unpaid holidays in this fiscal year.
"While we are still depending on furlough savings, we will be able to make up our budgetary shortfall in this fiscal year with fewer furlough days than initially announced," the secretary said in a written statement Tuesday, describing what he calls "one of the most volatile and uncertain budget cycles the Department of Defense has ever experienced."
The Pentagon was able to free up some funding through creative management, cutting costs and congressional reprogramming, Hagel said.
Other military sectors have already started to recover from the effects of the across-the-board cuts known as sequestration. Squadrons in the Air Force have returned to the skies after a third were grounded, the Army is training select units and the Navy has relaunched ships and restarted its maintenance infrastructure.
But the future for funding at the Pentagon remains murky at best. Hagel warns that he still does not know how furloughs will fit into the budget for fiscal year 2014, which begins on Oct. 1.
Experts in defense policy warn that the leeway the Pentagon was able to afford its civilian workers now may come at a dire cost in the coming years.
"The problem here is before sequestration took effect, they had all these dire warnings," says Todd Harrison, a budget expert at the Center for Strategic and Budgetary Assessments. "One by one, it's proving not to be true."
Defense leaders initially warned Congress that allowing sequestration to begin on March 1 – per the regulations outlined in the 2011 Budget Control Act – would amount to at least 22 furlough days for civilians as well as wide-sweeping hits to military readiness. These threats ranged from an inability to deter nuclear weapons to the forced cancellation of aircraft carrier group deployments.
Tuesday's decision, along with the other waning effects of the budget cuts, will assure some members of Congress that sequestration is not all that bad, says Harrison.
"It exacerbates the credibility problem that DoD and the administration have with Congress," he says.
Hagel said Tuesday the department faces "major fiscal challenges" going into the next year, including finding an additional $52 billion in savings if sequestration continues. That greatly outshadows this year's predicament of cutting $37 billion.
"Facing this uncertainty, I cannot be sure what will happen next year, but I want to assure our civilian employees that we will do everything possible to avoid more furloughs," Hagel said.
This might mean a move that cuts deeper than the furloughs in the form of RIPs, or reductions in personnel.
Most department positions are subject to "last in, first out" regulations, forcing those hired most recently to be fired first. Congress has the ability to decide to waive these restrictions and allow managers to decide who to keep based on merit instead of tenure.
Through his option, Harrison predicts that tens of thousands of civilians could be fired as the department culls as many as 10 percent of its non-military workforce.