En route to Florida for a cruise to begin my #funemployment, I had the good fortune to sit next to an official from the Department of Defense on a flight from JFK to Dulles.
We chatted about subjects all over the map – his 30 years of service in the Armed Forces, the two times he contracted dengue fever, the situation in Syria – but I was particularly interested in the specific intel he provided regarding how the DoD will implement the looming sequestration cuts.
(I’ll avoid giving this gentleman’s name. He didn’t provide it, but I caught a glimpse of his airline ticket sticking out of his suit pocket. I suppose this might pass for investigative journalism…but I digress. Instead, let’s call him Noel.)
The good news: he indicated that even in a worst-case scenario, general employees won't be fired.
According to Noel, nonmilitary DoD staff has already agreed upon involuntary, unpaid vacation in addition to pay and hiring freezes in lieu of layoffs.
General staff will rotate on these 3-week ‘vacations’ in the event of sequestration, which would slightly, though not substantially, impact the DoD’s operational capabilities.
Ironically, it appears as though the forced spending cuts would be implemented in a way nearly identical to austerity measures adopted by periphery Eurozone nations in response to the financial crisis.
A report financed by the European Commission, entitled “The wrong target – how governments are making public sector workers pay for the crisis” outlines how one Estonian agency used the same tactic to reduce government spending:
…the Social Insurance Board, which deals with pensions, required its staff to take 24 days unpaid leave (two days a month) over 12 months in 2010 (p. 12)The use of unpaid, involuntary vacations for public sector employees (as a means of deficit reduction) has also been introduced in Latvia, Lithuania, and Romania.
Noel also revealed the DoD has been cutting back extensively on travel expenses – for nonmilitary staff, only travel specifically pertaining to war is maintained.
He went on to say that the American public should expect that the nation’s armed forces will be reduced by about 100,000 over the next few years – and that closing bases overseas doesn’t save as much money as you’d think, since foreign countries pay a substantial percentage of the costs borne by housing those soldiers.
The bottom line: state and local government cuts (read: reduction in public sector employees) have undoubtedly been a drag on the recovery.
The continuation of this farcical trend, through sequestration, will only serve to undercut the recovery, and potentially throw the U.S. economy back into recession.