lOVERNMENT SHUTDOWN I: WHAT'S ESSENTIAL?
Y 4. G 74/7; SH 9
Governnent Sbutdoun I: Hhat's Essei. ..
HEARINGS
BEFORE THE
SUBCOMMITTEE OX
CML SER\n:CE
OF THE
COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
DECEMBER 6, AND 14, 1995
Printed for the use of the Committee on Government Reform and Oversight
GOVERNMENT SHUTDOWN I: WHAT'S ESSENTIAL?
HEARINGS
BEFORE THE
SUBCOMMITTEE ON
CIVIL SERVICE
OF THE
COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
HOUSE OP REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
DECEMBER 6, AND 14, 1995
Printed for the use of the Committee on Government Reform and Oversight
U.S. GOVERNMENT PRINTING OFFICE
40-190 CC WASHINGTON : 1997
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 2O402
ISBN 0-16-055139-0
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
WILLIAM F. CLINGER, Jr., Pennsylvania, Chairman
BENJAMIN A. OILMAN, New York
DAN BURTON, Indiana
J. DENNIS HASTERT, Illinois
CONSTANCE A. MORELLA, Maryland
CHRISTOPHER SHAYS, Connecticut
STEVEN SCHIFF, New Mexico
ILEANA ROS-LEHTINEN, Florida
WILLIAM H. ZELIFF, Jr., New Hampshire
JOHN M. McHUGH, New York
STEPHEN HORN, CaUfomia
JOHN L. MICA, Florida
PETER BLUTE, Massachusetts
THOMAS M. DAVIS, Virginia
DAVID M. Mcintosh, Indiana
JON D. FOX, Pennsylvania
RANDY TATE, Washington
DICK CHRYSLER, Michigan
GIL GUTKNECHT, Minnesota
MARK E. SOUDER. Indiana
WILLIAM J. MARTINI, New Jersey
JOE SCARBOROUGH, Florida
JOHN B. SHADEGG, Arizona
MICHAEL PATRICK FLANAGAN, IlUnois
CHARLES F. BASS, New Hampshire
STEVEN C. LaTOURETTE, Ohio
MARSHALL "MARK" SANFORD, South
Carolina
ROBERT L. EHRLICH, Jr., Maryland
CARDISS COLLINS, IlUnois
HENRY A. WAXMAN, CaUfomia
TOM LANTOS, California
ROBERT E. WISE, Jr., West Virginia
MAJOR R. OWENS, New York
EDOLPHUS TOWNS, New York
JOHN M. SPRATT, Jr., South CaroUna
LOUISE MCINTOSH SLAUGHTER, New
York
PAUL E. KANJORSKI, Pennsylvania
GARY A. CONDIT, CaUfomia
COLLIN C. PETERSON, Minnesota
KAREN L. THURMAN, Florida
CAROLYN B. MALONEY, New York
THOMAS M. BARRETT, Wisconsin
GENE TAYLOR, Mississippi
BARBARA-ROSE COLLINS, Michigan
ELEANOR HOLMES NORTON, District of
Columbia
JAMES P. MORAN, Virginia
GENE GREEN, Texas
CARRIE P. MEEK, Florida
CHAKA FATTAH, Pennsylvania
BILL BREWSTER, Oklahoma
TIM HOLDEN, Pennsylvania
BERNARD SANDERS, Vermont
(Independent)
James L. Clarke, Staff Director
Kevin Sabo, General Counsel
Judith McCoy, Chief Clerk
Bud Myers, Minority Staff Director
Subcommittee on Civil Service
JOHN L. MICA, Florida, Chairman
CHARLES F. BASS, New Hampshire JAMES P. MORAN, Virginia
BENJAMIN A. OILMAN, New York BERNARD SANDERS, Vermont (Ind.)
DAN BURTON, Indiana TIM HOLDEN, Pennsylvania
CONSTANCE A. MORELLA, Maryland
Ex Officio
WILLIAM F. CLINGER. Jr., Pennsylvania CARDISS COLLINS, lUinois
George Nesterczuk, Staff Director
Ned Lynch, Professional Staff Member
Caroline Fiel, Clerk
Cedric Hendricks, Minority Professional Staff
(II)
CONTENTS
Hearing held on:
December 6, 1995 1
December 14, 1995 491
Statement of:
Bachus, Hon. Spencer, a Representative in Congress from the State of
Alabama; Hon. Peter Hoekstra, a Representative in Congress from
the State of Michigan; Hon. Ken Calvert, a Representative in Congress
from the State of California; and Hon. J.D. Hayworth, a Representative
in Congress from the State of Arizona 509
Broadnax, Walter, Deputy Secretary, Department of Health and Human
Services; Dwight Robinson, acting Deputy Secretary, Department of
Housing and Urban Development; Thomas P. Glynn, Deputy Secretary,
Department of Labor; George Munoz, Assistant Secretary for Manage-
ment and Chief Financial Officer, Department of the Treasury; Eugene
A. Brickhouse, Assistant Secretary for Human Resources and Adminis-
tration, Department of Veterans Affairs; and Shirley Chater, Commis-
sioner, Social Security Administration 22
Hoyer, Hon. Steny, a Representative in Congress from the State of Mary-
land; Hon. George Gekas, a Representative in Congress from the State
of Pennsylvania; Hon. Glen Browder, a Representative in Congress
from the State of Alabama; Hon. Joe Barton, a Representative in Con-
gress from the State of Texas; Hon. Karen McCarthy, a Representative
in Congress from the State of Missouri; and Hon. Sonny Bono, a Rep-
resentative in Congress from the State of California 580
Koskinen, John A., Deputy Director for Management, Office of Manage-
ment and Budget; Christopher H. Schroeder, Deputy Assistant Attor-
ney General, Office of Legal Policy, Department of Justice; and Allan
D. Heuerman, Associate Director for Human Resources, Office of Per-
sonnel Management 219
Letters, statements, etc., submitted for the record by:
Bass, Hon. Charles F., a Representative in Congress from the State
of New Hampshire, prepared statement of 15
Bachus, Hon. Spencer, a Representative in Congress from the State of
Alabama, prepared statement of 512
Barton, Hon. Joe, a Representative in Congreess from the State of Texas,
prepared statement of 596
Boehner, Hon. John A., a Representative in Congress from the State
of Ohio, prepared statement of 505
Bono, Hon. Sonny, a Representative in Congress from the State of Cali-
fornia, prepared statement of 605
Brickhouse, Eugene A., Assistant Secretary for Human Resources and
Administration, Department of Veterans Affairs:
Information concerning lawn care workers 210
Prepared statement of 68
Broadnax, Walter, Deputy Secretary, Department of Health and Human
Services, prepared statement of 25
Browder, Hon. Glen, a Representative in Congress from the State of
Alabama, prepared statement of 592
Calvert, Hon. Ken, a Representative in Congress from the State of Cali-
fornia, prepared statement of 522
Chater, Shirley, Commissioner, Social Security Administration, prepared
statement of 186
(III)
rv
Page
Letters, statements, etc., submitted for the record by — Continued
dinger, Hon. William F., Jr., a Representative in Congress from the
State of Pennsylvania, letter to Mr. Panetta, regarding management
functions of 0MB, dated June 21, 1994 11
Collins, Hon. Cardiss, a Representative in Congress from the State of
Illinois, prepared statement of 20
Ensign, Hon. John, a Representative in Congress from the State of Ne-
vada, prepared statement of 508
Gekas, Hon. George, a Representative in Congress from the State of
Pennsylvania, prepared statement of 588
Glynn, Thomas P., Deputy Secretary, Department of Labor, prepared
statement of 36
Hayworth, Hon. J.D., a Representative in Congress from the State of
Arizona, prepared statement of 556
Hoekstra, Hon. Peter, a Representative in Congress from the State of
Michigan:
Letters concerning Department of Labor's activities during recent
lapse in funding 567
Prepared statement of 551
Horn, Hon. Stephen, a Representative in Congress from the State of
California:
Information concerning excepted and furloughed employees 209
Prepared statement of 17
Hoyer, Hon. Steny, a Representative in Congress from the State of Mary-
land, prepared statement of 583
Heuerman, Allan D., Associate Director for Human Resources, Office
of Personnel Management 244
Koskinen, John A., Deputy Director for Management, Office of Manage-
ment and Budget, prepared statement of 225
Lazio, Hon. Rick A., a Representative in Congress from the State of
New York, prepared statement of 500
McCarthy, Hon. Karen, a Representative in Congress from the State
of Missouri, prepared statement of 601
Mica, Hon. John L., a Representative in Congress from the State of
Florida:
Information concerning overtime 210
Open letter to Federal employees 493
Prepared statement of 495
Moran, Hon. James P., a Representative in Congress from the State
of Virginia, prepared statement of 6
Morella, Hon. Constance A., a Representative in Congress from the State
of Maryland, prepared statement of 560
Munoz, George, Assistant Secretary for Management and Chief Financial
Officer, Department of the Treasury, prepared statement of 47
Schroeder, Christopher H., Deputy Assistant Attorney General, Office
of Legal Policy, Department of Justice, prepared statement of 238
Thompson, Hon. Bennie G., a Representative in Congress from the State
of Mississippi, prepared statement of 502
GOVERNMENT SHUTDOWN I: WHAT'S
ESSENTIAL?
WEDNESDAY, DECEMBER 6, 1995
House of Representatives,
Subcommittee on Civil Service,
Committee on Government Reform and Oversight,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:10 a.m., in room
2154, Rayburn House Office Building, Hon. John L. Mica (chair-
man of the subcommittee) presiding.
Present: Representatives Mica, Morella, Bass, and Moran.
Ex officio present: Representative CUnger.
Also present: Representative Horn.
Staff present: George Nesterczuk, staff director; Garry Ewing,
counsel; Ned Lynch, professional staff member; Caroline Fiel, clerk;
Cedric Hendricks, minority professional staff; and Elisabeth Camp-
bell, minority staff.
Mr. Mica. Good morning. I would like to call this meeting of the
House Subcommittee on Civil Service to order.
The subject of today's hearing is government shutdown and what
is essential? I will begin this hearing by welcoming our witnesses,
guests and fellow colleagues. I have an opening statement, then we
will hear from some of the other Members.
Today the subcommittee will be reviewing the government shut-
down, both as it affected our Federal work force recently and what
might happen in the event of a future government lapse in appro-
priations. Any review of the government shutdown must center on
which activities of the Federal Government are essential and which
are nonessential.
The Constitution of the United States is clear in Article I, Sec-
tion 9, that "No money shall be drawn from the treasury but in
consequence of an appropriation made by law." Despite this con-
stitutional restriction, we recognize that certain functions of our
government are, in fact, essential, and its work force must continue
to operate even when appropriations do lapse.
By tradition, it is the President, together with 0MB and the indi-
vidual agencies, that have been allowed to decide which functions
in agencies are essential and which, in fact, are to be shut down.
Part of the reason that I, and other new Members, sought election
to Congress was really to come here with the intention of exploring
these issues in a broader context. In our attempt to balance the
Federal budget, we deal with this issue directly as we decide what,
in fact, are essential national functions and activities. That, of
course, is part of a larger question as we consider the proper role
(1)
of our Federal Government, including alternatives such as
privatizing, downsizing, or shifting responsibilities to State and
local authorities.
No one can deny the fact that taxpayers and the average citizen
outside the Beltway must ask some very serious questions when
large segments of our Federal Government close down and they see
no appreciable differences in their lives. Inside the Beltway, many
people spoke of assessing blame for the government shutdown of
nonessential services.
Outside the Beltway, many citizens and taxpayers applauded
closing down nonessential government activities. Others outside
the Beltway, who have grown dependent on Federal Government
benefits and services, were, in fact, appalled and dismayed, and
had their lives severely disrupted by the shutdown.
In this hearing today, I hope we can review, first, what took
place in the recent shutdown; and, second, what plans are under
consideration for any future government closure. It is important to
note that the shutdown itself has not been a new idea to this ad-
ministration. I believe it was part of a calculated strategy by the
administration to close down the government this year.
Planning for this supposedly spontaneous shutdown began as
early as July of this year. In September, agencies were required to
submit shutdown plans to 0MB. This was in marked contrast to
the first shutdown, which occurred under President Reagan in
1981, when the first 0MB guidance to agencies was issued less
than a week before employees were sent home.
In spite of the current administration's advanced planning, it is
unfortunate that the execution of the shutdown was, in many in-
stances, disorganized and illogical, at best, and oftentimes chaotic
experience. Let me cite a couple of examples here, and we have
people that will speak to this as witnesses.
The Department of Housing and Urban Development [HUD], ini-
tially released all but 136 of nearly 12,000 employees. As a result,
some housing programs were shut down, even though funds were
available for many major housing programs. Even with a 90 per-
cent retention rate at the Department of Veterans Affairs, the ad-
ministration announced that the processing of new applications for
some major veterans benefits programs would be suspended. With-
in a week of the shutdown, the White House announced the recall
of more than 1,700 DVA employees.
The Department of Education, as another example, furloughed
86 percent of its work force, while the Bureau of Alcohol, Tobacco,
and Firearms found it necessary to retain, so-called "essential," 15
of 23 public affairs officers. The Social Security Administration fur-
loughed 90 percent of its work force. Retirement claims processing
ceased. At the same time, retirement claims for civil service retir-
ees, at the Office of Personnel Management, were being processed
at 100 percent capacity and activity rate.
Three days into the furlough, the President initiated a recall of
more than 50,000 Social Security personnel, raising questions
about whether they should have been furloughed in the first place.
Furthermore, in the middle of the shutdown, the President de-
clared some activities nonessential on Monday, when on Friday
these same functions were suddenly termed "essential."
It's important that we look at the discrepancies and review the
agencies, and see what is, in fact, a priority activity. We must also
examine what activities are more costly to close down than to con-
tinue. Finally, we must consider Federal employees whose lives are
severely disrupted by this disorderly process.
This may have been a well-planned shutdown, but I fmd some
of the results very confusing. We heard a lot of rhetoric, and saw
a lot of posturing and grandstanding from the administration. As
cold reality set in, we saw backpedaling and the recall of employ-
ees. And what about the question, what is essential? The adminis-
tration seems not to have defined this consistently among its var-
ious agencies.
Was this poor management or premeditation? Should Congress
have established better criteria or better defined guidelines? The
priorities seem evident to me. First and foremost, we have a re-
sponsibility to ensure national security. We have a duty to provide
for the effective enforcement of our laws. We must take adequate
measures to guarantee the public safety, health, and welfare. Next,
we must ensure that those who cannot sustain themselves are pro-
vided for adequately.
Most of these functions were deemed essential last month. Most
were carried out with only minor interruptions. But it is important
that we look at the discrepancies in the implementation of the ad-
ministration's first shutdown, if only to make certain that we avoid
these problems in the future.
We face the prospect of another shutdown within just a matter
of 10 days affecting several of the agencies represented here today.
We remain committed to approving legislation that will continue
operations, but if another veto does shut down these agencies, we
hope this hearing will result in a more consistent criteria for clo-
sures and more effective operations of continuing activities.
To explore these issues, we have assembled a panel of senior offi-
cials who have responsibility for the management of major agencies
that have implemented the shutdown in a variety of ways.
They include Dr. Walter Broadnax, the Deputy Secretary of the
Department of Health and Human Services; Mr. Dwight Robinson,
Acting Deputy Secretary of the Department of Housing and Urban
Development; Mr. Thomas Glynn, Deputy Secretary of the Depart-
ment of Labor; Mr. George Muiioz, Assistant Secretary for Manage-
ment and Chief Financial Officer of the Department of the Treas-
ury; Mr. Eugene Brickhouse, Assistant Secretary for Human Re-
sources and Administration of the Department of Veterans Affairs;
and Ms. Shirley Chater, Commissioner of the Social Security Ad-
ministration.
Our second panel includes Mr. John Koskinen, Deputy Director
of the Office of Management and Budget; Mr. Christopher Schroe-
der. Deputy Assistant Attorney General in the Office of Legal Pol-
icy at the Department of Justice; and Mr. Allan Heuerman, Associ-
ate Director for Human Resource Systems Service in the Office of
Personnel Management.
Those are my opening remarks and comments. I will yield now
to the ranking member of our panel, the distinguished gentleman
from Virginia, Mr. Moran.
Mr. MORAN. Thank you, Mr. Chairman. I am glad you are having
this hearing on the government shutdown that never should have
happened. In my view, it was clearly the Congress' fault. We did
not get our appropriations bills passed in time. We had a year to
do it, and we didn't do it. There was only 1, in my recollection, out
of 13 bills that was enacted.
There were a lot of complaints over the fact that the President
vetoed the legislative branch appropriations bill, but thank God he
did. That would have been the worst thing to have had the Con-
gress paid and none of the rest of the government paid because we
took care of our own salaries and operation expenses before the
rest of the government. So I'm glad he vetoed that.
But the fact is that we didn't get the appropriations bills passed.
That's why we had the government shutdown. And then we delib-
erately sent a continuing resolution to the President, calculated to
draw a veto. Now, I grant you that the Speaker tried to lend some
insight into why that happened by going into the fact that he didn't
get a window seat on the plane to the Middle East, or he went out
the wrong door, or something.
I don't think it was so much the personal snubbing that he per-
ceived occurred as the fact that the legislative branch did not act
in an efficient and effective way. The reconciliation bill is far less
important than getting these appropriations bills signed, and that,
in the future, should be our highest priority.
But 40 percent of the government did not operate, as a result,
for 4 days. And I think that's something we should be ashamed of.
We also ought to be embarrassed at the fact that we spent $700
million of taxpayers' money and got no work out of it, no return
from the Federal employees who were furloughed, all of whom
wanted to be at work performing their jobs; none of them wanted
to be getting paid for doing nothing, but 800,000 were sent home.
I think that we need to clarify what is essential and nonessential
in the first place. The definition that suggests that — and, in fact,
I have the directive here, "essential employees are only those
where, if they were unable to perform their jobs, the failure to per-
form those functions would result in an imminent threat to the
safety of human life or the protection of property."
There's an inconsistent application of that criteria, but the func-
tioning of the Federal Government goes far beyond that. Obviously,
national park officials, for example, are not going to be involved in
the safety of human life or protection of property, for the most part,
but they are important for the proper functioning of the Federal
Government.
The people who issue visas. We had any number of people in my
jurisdiction — I'm sure they are throughout the country — who need-
ed visas, who needed to be able to travel, but couldn't get them.
One woman's family member was dying and she couldn't get there
because the people who would have issued her a visa were not able
to get to work. The Social Security applications, the applications for
veterans benefits were not processed when they were supposed to
be, when people were eligible. The fact is that millions of dollars
was wasted every day that should have been collected and wasn't.
I know we're going to find a number of discrepancies between the
various Federal agencies in the way that they interpreted the
guidelines. As a result, some were harder hit than others, not just
because some of the functions relate to the safety of human life and
protection of property more than others, but because of different in-
terpretations. I think that's due to a sincere effort to do the right
thing and simply differences in honest judgment.
The hearing that we are having today is particularly important
because it could happen again. The continuing resolution expires
on December 15. It is conceivable we could have another govern-
ment shutdown at that time. We are making absolutely no progress
on the 7-year balanced budget bill. We have agreed on how many
people are going to sit at the table and what table it is, but we
haven't gone beyond that.
That being the case and the fact that we are running out of time,
I don't see any possibility of all these bills being resolved, so a con-
tinuing resolution is clearly going to be necessary. I would hope
there would be a simple extension of the continuing resolution. If
there is not, then the public is going to be absolutely right in iden-
tifying the source of the problem, and it is us, as far as I'm con-
cerned. Back in 1990, almost two out of three taxpayers figured it
was the Congress' fault, and the figures were almost identical this
year, as well. I think they are going to be higher if it happens
again.
So I think it behooves us to take measures now to avert this. One
of the things that we could do is to pass legislation, and it ought
to originate in this subcommittee, that I have introduced and Con-
gressman Gekas, from Pennsylvania, has introduced, that would
have Federal employees go to work in the event of any lapse of ap-
propriations. They would be reimbursed after the fact, but at least
the taxpayer would get effort for the money that is being paid for
Federal employees' salaries. It would not disrupt the ability of the
Federal employee work force to serve the public.
Speaker Gingrich made it clear, in a letter that he gave to Re-
publican Members of the Congress, that he was committed to pay-
ing all Federal employees, including those who were furloughed. So
this simply ensures that they would be performing work during
that period of time. I can't imagine why people would be opposed
to that other than for the political leverage that it gains people to
be able to threaten the possibility of a government shutdown.
That's wholly irresponsible.
I think we also need to take into consideration the people em-
ployed in the private sector who were severely and adversely £if-
fected by the shutdown, people in the services, the retail sector,
and government contracting and procurement. The losses that they
suffered are not made up. They don't get any retroactive pay. And
particularly in this Washington area, there's a lot of people who
were hurt unjustifiably and unnecessarily.
It's H.R. 2184 that we have introduced. I would hope we would
consider that in this subcommittee and pass it on in an expeditious
fashion.
Beyond that, I am anxious to get into this hearing Mr. Chair-
man. I am glad we have the occasion to see how it worked, and I
hope, even more importantly, to get to work to make sure that this
does not occur again. Thank you.
[The prepared statement of Hon. James P. Moran follows:]
GOVERNMENT REFORM
AND OVERSIGHT
Congresfs! of tlje Winitth States!
^ouit of il^epresfentatibed
?IBHa«f)ington, ©C 20515^608
JAMES P. MORAN
8th district of VIRGINIA
WASHINGTON Of f ICE
405 CANNON HOUSE
OFFICE BUILDING
WASHINGTON, DC 20515-4608
12021 225-4376
INTERNATIONAL RELATIONS
SUBCOMMITTEE ON
INTERNATIONAL OPERATIONS
AND HUMAN RIGHTS
Mr. Chairman:
Statement of Rep. James P. Moran
On the Government Shutdown
Subcommittee on Civil Service
December 6, 1995
I appreciate your having this hearing today and focusing on
this important subject.
This was the furlough that never should have happened.
Congress did not pass the Budget Reconciliation and had not
passed a majority of the appropriations bills. Congress then
exacerbated its own failures by submitting a continuing
resolution calculated to draw a Presidential veto. As the press
reported, all of this was done because the Speaker didn't get a
window seat on Air Force One. Congress then failed to rectify
the situation and pass a clean CR until the end of the week.
Even though all employees were paid and no en^loyee was harmed by
the shut-down, 40% of the federal government did not operate for
four days because of bickering between the Congress and the
President and pure pettiness.
It is very important to stress that those employees sent
home were not "non-essential" employees. They were non-emergency
employees whose jobs did not directly affect human life or
property. National Park officials are not emergency employees,
but they are essential to the operations of our national park
system. Personnel officers are not emergency employees, but they
are essential to ensure that federal employees get paid. To
claim that the government should be reduced by 800,000 employees,
as some Republican freshman have done, because 800,000 employees
were furloughed is absurd. This Subcommittee should never fall
into that trap.
There were wide discrepancies among the agencies. Different
agencies interpreted the direction from the Justice Department
differently. But this is more indicative of a honest effort to
follow the guidelines than a concerted effort to play games with
the shut-down. Some agencies were harder hit than others. Some
agencies have less of a tie to protecting human life and property
them others. And no agency was prepared for the severity or
length of the shut-down. In the past, when the Congress and
Administration were unable to agree on a CR or a budget bill.
there was an honest effort to, at a minimum, ensure the
continuing operations of the government while the process
continued. This Congress is different. This Congress does not
worry about the collateral damages it creates as it continues on
its ideological juggernaut. An example of this irresponsibility
is the Speaker's unwillingness to work with the Administration to
pass the final appropriations bills. As members of the House
leadership have stated, the Congress is unwilling to ensure the
proper operation of the government because they fear they might
lose leverage with the President on the budget. This is not the
way government is supposed to operate. This is not the way a
responsible Congress acts.
This hearing is appropriate because it appears as if we may
be heading towards another shut-down on December 15. Ten days
before Christmas, we will once again unnecessarily threaten the
jobs security and income of federal employees to make partisan
political points. We will compromise the efficiency and
effectiveness of the federal government to play political games.
If anything is to come out of this hearing, it must be the
message that shutting down the government is dangerous, short-
sighted, and extremely irresponsible. The fault for this action
rests solely with the Congress and, as the polls continue to
show, the public is not fooled by Congress's attempts to point
fingers. In October of 1990, about 57% of the public blamed
Congress for the government shut-down. About 25% blamed the
President. In November of 1995, the numbers were exactly the
same.
This past experience and the possibility of a repeat during
the Christmas season demonstrates the immediate need for
legislation such as I have introduced and Rep. Gekas has
introduced that provides for continued government operations in
the event of a lapse in appropriations. In essence, these bills
are permanent continuing resolutions that take effect whenever
the Appropriations Committee fails to pass its bills. It
provides that the agencies can continue operations at prior
funding levels and any costs incurred are taken out of the
appropriations once enacted. This bill saves money because it
allows the government to continue operating, and continue raising
revenue, during a lapse in appropriations. As recent news
reports have stated, the cost of the November shut-down was in
excess of $700 million. This is a lot of taxpayer money to waste
in order to make a political point.
One of my bills, H.R. 2184, differs in that it only applies
to government employees. It ensures that government employees
will continue to be paid during a budget crisis period. While it
is true that federal employees were paid for the last shut-down,
it is also true that a number of Republican members objected to
the retroactive pay. Federal employees, who play no part in the
political games leading to a shut-down, should not be penalized
for the inability of the Congress to pass its Appropriations
bills. Since this bill was referred to the Government Reform
Committee rather than the Appropriations Committee, it is my hope
that we can mark-up the bill and have it enacted before we allow
another government shut-down to occur. We should take this
opportunity to learn our lessons and make any necessary
corrections .
Again, I appreciate your having this hearing today and I
look forward to the testimony of our witnesses.
Mr. Mica. I thank the gentleman and would now like to yield to
the chairman of the full committee who has joined us this morning,
Mr. dinger from Pennsylvania.
Mr. Clinger. Thank you very much, Mr. Chairman, and thank
you also for holding this hearing on the effect of the partial shut-
down of the Federal Government on civil service staff and govern-
ment functions.
A great deal of planning and work went into the shutdown plans
of the agencies, and we are here to learn about the actions taken
by the Federal cabinet departments and independent agencies to
prepare for a possible appropriations impasse, whether they took
the appropriate steps to troubleshoot their own plans and asked for
help when they needed it from the Office of Management and
Budget.
I think we also want to know what actions 0MB and/or the De-
partment of Justice and the Office of Personnel Management took
to assist in the planning, to help guide the agencies and to trouble-
shoot the problem areas before a funding hiatus occurred.
Dr. Rivlin and numerous other administration officials were com-
menting publicly on the potential shutdown of the government real-
ly for months before it actually took place. As early as July 26, I
believe, Dr. Rivlin cautioned agencies to "take no actions such as
reductions in force, office closings, or similar measures, until we
have had time to assess the developing situation and put together
a governmentwide plan," was her quote.
By memo dated August 17 of this year, she directed the agencies
to develop and submit for review any plans that "you believe are
appropriate," she said, and she assured the agencies that 0MB
would "review plans promptly and get back to the agencies with
suggestions." And again, on November 9, she instructed agencies to
begin to implement the plan "as approved by 0MB in September."
So, clearly, 0MB had been planning for the funding hiatus since
mid-summer and had also accepted full responsibility for reviewing
and approving the plans and otherwise managing a cessation of
government operations. However, we find that, during the shut-
down, inconsistencies became apparent in the treatment and status
of employees who perform very similar, if not identical, functions.
For example, the Department of Veterans Affairs makes benefit
payments for pensions and compensation. In its shutdown proce-
dure, the VA strictly adhered to the Antideficiency Act, and veter-
ans compensation was determined to be unpayable because it is
funded through annual appropriations. The Social Security Admin-
istration also, however, makes payments for pensions and com-
pensation. But here, even though the Social Security Administra-
tion is funded through indefinite appropriations, the SSA shut
down to only 7 percent of its work force.
On what basis, then, were these disparate decisions made? Is
this a distinction based on funding stream only?
I am also curious to know whether sufficient guidance was given
by 0PM for the agencies to adequately prepare their shutdown con-
tingency plans. The contingency plan of the Department of Health
and Human Services was a mere two pages long, one of which was
a chart, and the other a cover memo to Nancy Ann Min of the Of-
fice of Management and Budget. By contrast, the contingency plan
10
for the U.S. Department of Labor was impressive and extensive,
184 pages long, with the Treasury Department a close second at
174 pages long.
In its review of the plans, did 0MB consider the HHS shutdown
plan to be adequate at two pages? Also, why were certain safety
functions which are necessary to protect human life treated dif-
ferently, as we understand it?
The Mine Safety and Health Administration had more than
1,400 safety inspectors on duty during the furlough. By contrast,
OSHA, the Occupational Safety and Health Administration, re-
tained a staff of about 250. No child labor inspectors were retained.
Do child labor inspectors perform a safety function? I really con-
tinue to be somewhat puzzled by this apparently disparate treat-
ment of safety functions, and I look forward to hearing an expla-
nation of this issue from the Department of Labor this morning.
Were any of these inconsistencies observed by 0MB in their re-
view of the plans, and of what did OMB's review and approval
process consist? The bottom line is, how was this shutdown man-
aged?
In 1994, the Office of Management and Budget merged its budget
and management functions. At that time, I sent a letter to then Di-
rector Panetta expressing my concern. I was joined in that by then
Chairman Conyers, expressing our concern about the impact of the
OMB's reorganization on its management of the Federal Govern-
ment.
In examining this shutdown, I am again concerned that the man-
agement functions of 0MB have been overshadowed by the ongoing
budget work. Frankly, I am concerned that 0MB may not have re-
viewed the shutdown plans thoroughly enough, at least on the
basis of the information we have seen so far. If they had, it seems
that they would have seen these serious inconsistencies in the
plans and would have taken steps to address them.
The partial shutdown of the Federal Government is an extremely
complex process. If we have learned nothing else with this exercise,
we have learned exactly how complex and complicated it is. It re-
quires a tremendous amount of planning and sound judgment. It
is my hope that 0MB will assess the responsibility it has for prop-
erly managing future shutdowns so that expectations are fair and
clear, and confusion and inconsistency are minimized. Frankly, we
hope that we never have to go through this again, but, if we do,
it surely needs to be better thought out beforehand.
Finally, I wonder whether the subcommittee might consider rec-
ommending that there be a process within 0MB by which shut-
down plans will be reviewed and through which agencies can for-
mally resolve questions and appeal those decisions.
I want to thank you, Mr. Chairman. I would ask unanimous con-
sent that the letter I referred to, from myself and Mr. Conyers to
Mr. Panetta, with regard to the management functions of 0MB,
dated June 21, 1994, be included in the record at this point.
Mr. Mica. Without objection, so ordered.
[The information referred to follows:]
11
WILUAUr CVMCtIt JK.
CAWMSi couJN* Kimoi* ONE HUNDRED TMIHD CONGRESS
Congress of the lam'td ^tatts
haast of UcpresentstiDes
COMMITTEE ON GOVERNMENT OPERATIONS ISSSl.Ti^^
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The Honorable Leon E. Panetta
Director
Office of Management and Budget
725 17th Street, N.W., Room 252
Old Executive Office Building
Washington, D. C. 20503
Dear Mr. Director
As you know, we are interested in the changes, announced as OMB 2000, which are
designed to improve the Office of Management and Budget's oversight by integrating the
budget analysis, management review, and policy development roles. We share your goals to
improve the breadth and quality of the analysis that goes into the budget and to strengthen
OMB 's ability to oversee agency programs and policies.
We are, however, concerned about the impact of the reorganization on the legislative'
mandates within the jurisdiction of the Committee on Government Operations. It is
important to us that the strength and operational effectiveness of the Office of Information
and Regulatory Affairs, the Office of Federal Procurement Policy, and the Office of Federal
Financial Management be maintained. We further want to ensure that broad management
initiatives such as the Paperwork Reduction Act, the Chief Financial Officers Act, and the
Government Performance and Results Act be effectively implemented. We understand that
you anticipate that the new Resource Management Offices will strengthen OMB in this regard
by employing interdisciplinary teams that can take a more integrated approach to
management issues. We would like more detailed information on your strategy for
implementing these changes.
We also seek assurance that as former "management office" staff are assigned to the
Resource Management Offices and as energy is devoted to making those interdisciplinary
teams work, the functioning of the statutory offices and the implementation of the broad
management initiatives do not suffer. We are interested in the specific objectives and
measures you will use to gauge success. This information will serve as the basis toward
reaching agreement with you on criteria we all can use to judge progress. We have called
upon the General Accounting Office to assist us in our review.
12
The Honorable Leon Panetta
June 21, 1994
Page 2
We look forward to a constructive conversation on these issues.
Sincerely,
J John Conyers, Jr/j ^\
v^ Chairman (-^ V-*
William F. Clingef, \i.
Ranking Republican"
13
Mr. Mica. I thank the gentleman for his opening statement, and
I will yield now to Mrs. Morella. Mrs. Morella from Maryland is
recognized for her opening statement.
Mrs. Morella. Thank you, Mr. Chairman.
I want to commend you for convening this hearing. Last month
we experienced the longest government shutdown in our history.
So, for me, there is no more opportune time to examine the criteria
used by the administration to determine what functions would re-
main operational during the shutdown, particularly with December
15 staring us in the face.
I didn't want a shutdown. No member of this subcommittee or
full committee wanted it. The shutdown was a terrible experience.
It was a demoralizing and divisive ordeal for our work force. It was
costly and disruptive to the taxpayers. It hurt a number of busi-
nesses, particularly in this local area.
Clearly, I wish the President could have signed a continuing res-
olution that would have kept the entire government running. But,
for me, this hearing is not about that; this hearing is about review-
ing the policies and the implementation of those policies, so we can
devise solutions to better determine what needs improving and to
fix what is broken. It is also about sitting here and talking through
this matter, so that, just maybe, we wouldn't have to be in this po-
sition again.
There are issues that need to be reconciled. I have a hard time
understanding, for instance, why cancer researchers were not con-
sidered essential. I think most of you know how cancer has affected
my life. I'm not certain, but I've heard also that AIDS research
may have been affected during this period. The fact that the De-
partment of Veterans Affairs was recalling employees to process
claims for disabled veterans indicates some confusion over how the
policy was implemented. Our veterans need special treatment. If
the current policies don't afford this treatment, let's fix them.
Before I conclude my statement, there are two other issues that
I think need to be addressed. I have been reading statements in
the paper and hearing people say that Federal workers who were
furloughed came out ahead because they received their pay. And I
was one who advocated that they not be victimized. Now I realize
there is a question of equity out there, and we need to examine
that in the future.
But I find that these statements are highly offensive and insensi-
tive, and an affront to the dedicated men and women who serve
this Nation and who, through no fault of their own, were fur-
loughed. I don't know how you come out ahead after having to wear
the demoralizing title of "nonessential." I don't know how you come
out ahead while you are sitting at home wondering how long it will
last and how you and your colleagues will pay your bills in the in-
terim. There was not one Federal worker screaming, "Please,
please furlough me." So I hope that this will be an end to that kind
of rhetoric.
I also feel that the term "nonessential" must be eliminated from
the Federal vocabulary. I can't think of a term more misguided or
misleading. And with that said, I again want to thank Chairman
Mica for calling the hearing, for his indulgence, and also look for-
ward to hearing from the witnesses.
14
Thank you, Mr. Chairman.
Mr. Mica. I thank the gentlelady and now would Uke to yield to
the vice chair of the subcommittee, Mr. Bass from New Hampshire.
Mr. Bass.
Mr. Bass. Thank you very much, Mr. Chairman.
I have an opening statement that I would like to submit for the
record and to simply comment. Thank you for holding the hearing
this morning. I am looking forward to hearing the testimony from
our witnesses. I agree with my colleague, Mrs. Morella, that the
term "nonessential" does not necessarily mean unneeded or unnec-
essary.
I think what we need to determine, in the course of these hear-
ings, is what the nature, what the effect of the shutdown was on
the operation of government; the difference between what worked
and what didn't work in government; what was reactive versus
proactive, in terms of government activities. Perhaps we can learn
more about the internal workings of the Federal bureaucracy, and
perhaps what we can learn from this experience is how to run a
better, more efficient government, but certainly not stereotype any-
body who was furloughed as being "nonessential."
I want to thank the chairman for calling these hearings. I think
they are important; I think they are timely. I look forward to hear-
ing this testimony today.
I yield back.
[The prepared statement of Hon. Charles F. Bass follows:]
15
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Vloa CkalzBan, ClTll Sarrlca SubeoiBlttaa
Ha«xlAg oo Hull ii iimiiI shntAoiiD
DMaatoar (, 199S
Mr. Chairman, I want to thank you for holding this hearing, and for focusing the
agenda so squarely on the planning and implementation of the recent shutdown of the
federal government. Controlling excessive federal spending is essential to
fulfilling our commitment to the American people, and this hearing will help to
focus attention on that central question.
I will focus my opening remarks on the "Open Letter to Federal Employees" by the
President and Vice President, which I would like to submit for the record. I
believe that this letter has only served to divert attention from the real issues
raised by the shutdown. As our hearing title makes clear, the essential character
of federal employees is not the question; the less-than-essential character of many
federal functions is.
As Governor Fife Symington demonstrated in Arizona, where states and localities
believe that parks are essential to their communities, they are willing and able to
sustain operations. As millions of parents around the country demonstrate every
day, federal intervention is not always necessary to provide quality education;
making certain that children have opportunities for quality education at every level
is primarily the responsibility of parents, not bureaucracies. Successful
rehabilitation of many patients is accomplished every day by doctors, nurses,
therapists and other skilled practitioners who work with families and friends to
facilitate their patients' rehabilitation. Every day, millions of Americans depend
on the private sector, relying on both for-profit and not-for-profit organizations
to improve their lives. These private citizens also generate the tax revenue that
was once the life-blood of big government before big government borrowed our nation
beyond the bounds of spending restraints.
For nearly twenty years, our citizens have been sending a message to everyone who
must face the electorate. As President Reagan phrased that message, 'The problem is
not that Americans aren't taxed enough. The problem is that government spends too
much.' The Liberal establishment in Washington has resisted that message, and the
administration's "Open Letter to Federal Employees" is merely another effort to
divert attention from that message in order to protect big government bureaucracies.
This- Congress was willing to enact continuing resolutions that would have averted
this latest shutdown. We do not believe that the same scenario should be repeated
in December, and we welcome this opportunity to clarify guidelines and to ensure the
continued operation of every government function that has authorized and
appropriated funding sources. If there were mistakes in implementing the first
shutdown, they should not be repeated if there is a second one. None of our
interests would be served by allowing that to happen.
In closing, I would observe that Congress and the President are not that far apart
from agreement on principles to bring our Nation's budget into balance. We need to
eliminate the nonessential programs so that government employees can redouble their
efforts and become more effective in delivering on the essential functions of
government .
16
Mr. Mica. I thank the gentleman and now yield to Mr. Horn
from California.
Mr. Horn. Thank you very much, Mr. Chairman. I appreciate
the opportunity to sit with your subcommittee during these hear-
ings. As chairman of the Subcommittee on Government Manage-
ment, we have major concerns about the processes by which these
decisions were made.
Let me just say that I agree with what I have heard from the
gentleman from Virginia, the chairman, the gentlewoman from
Maryland, and the gentleman from New Hampshire. There are a
lot of significant questions, and I commend you for these hearings.
I hope you will recommend to the full committee, and thus the
House, the criteria by which these decisions have been made.
My particular concern comes on an incident that occurred in my
own district, and that is the Department of Defense withdrew the
C-17 inspectors from the line. And if this shutdown had lasted a
few more days, approximately 5,000 to 10,000 workers would have
been furloughed, because there's no way you can keep production
going unless the appropriate inspection has been made along the
way.
Now, if that policy was across the Nation, which I suspect it was,
talking to various officials in the Pentagon, I think it is a wrong-
headed policy that would damage this economy by the billions, but,
more particularly, it would damage the efficiency of defense produc-
tion, which has taken a long time, on the C-17 and other major
projects, to be developed. And now that it's efficient, this kind of
nonsense, of pulling C-17 inspectors and other defense production
inspectors, I think needs a very careful review by this committee.
Mr. Chairman, I would like to enclose, at this point in my re-
marks, a statement I have made that raises some fuller questions.
I do hope, whether I'm in the room or not, that you and your col-
leagues will ask, did the White House directly or indirectly urge
any particular closures? Because another series of closures that
irks me deeply is the fact that park rangers are pulled from var-
ious national monuments, when people have saved money for 5 to
10 years to finally see those national monuments, and they are un-
able to do it, not to mention, of course, the Social Security field of-
fices and all the other things we all know about.
[The prepared statement of Hon. Stephen Horn follows:]
17
Statement of Representative Stephen Horn
Hearing on Government Shutdown - What's Essential?
A review of the agency shutdown plans shows that some
agencies treated similar functions, such as public affairs, training, and
payment of benefits, very differently. It seems that agencies received
very little guidance on how to decide on which employees were
essential and which could be furloughed. They had to muddle through
on their own, and a few, such as the Department of Veterans Affairs
and the Social Security Administration, apparently underestimated their
responsibilities because they had to make hurried preparations to recall
employees to avoid a delay in distributing benefits payments.
Leadership from an oversight agency was conspicuous by its absence.
The Office of Management and Budget and the Department of
Justice apparently were less than responsive to requests for guidance
from the agencies. Today we would like to ask the representatives of
0MB and Justice why this happened. Was it an oversight on their
parts? Did they not have enough staff to monitor the agencies in their
development and submission of shut down plans? Did they decide to
adopt a "hands-off" approach and see what happened, hoping it would
18
-2-
embarrass Congress? It will be interesting to hear from them what
their reasons were. The results remain: agencies were left to their
own devices, some making decisions to keep employees working if
they were paid out of multi-year or no-year appropriation, some
retaining only those employees involved in protecting life or property.
Some departments shutting down almost completely, some remaining
almost fully staffed. There was no coordination among the agencies.
These are important management issues. We are trying to ensure
that Government management improves. This shut down shows that
at present Government management is barely adequate. Government
agencies are operating in a vacuum, without taking into account what
other agencies are doing. They are given no guidance or leadership.
We need to have, within the Administration, an office able and willing
to: take control of a situation; develop overall guidelines; make sure
the agencies follow the guidelines consistently; and ensure that similar
functions are treated consistently across all agencies performing those
functions.
It seems that this was lacking in the shut down that occurred
from November 14 to 18. The administration must make sure that any
future shut downs are managed better.
19
Mr. Mica. I thank the gentleman.
Without objection, the statement will be made part of the record.
I also have a statement and a request from Cardiss Collins, the
ranking member of the full committee, and, without objection, her
statement will be made part of the record.
[The prepared statement of Hon. Cardiss Collins follows:]
20
<m^o»m ONE HUNDRED FOURTH CONGRESS
Congreg£( of tte ^nitctJ ^tateg
]l)oMt o( i^tprt^entatibed
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
2157 Rayburn House Office Building
Washington, DC 20515-6143
JCM tCAHOOM>X>* F\0<U>*
-UAMTW^OW SOUTHC
CMKCM jM.UAAn»«
STATEMENT OF HON. CARDISS COLLINS, RANKING MEMBER
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
BEFORE THE SUBCOMMITTEE ON CIVIL SERVICE
HEARING ON THE GOVERNMENT SHUTDOWN:
WHAT'S ESSENTIAL?
November 21, 1995
Mr. Chairman, during the days preceding the recent government shutdown, the question
of "What's Essential' was repeatedly asked by front-line employees across the Federal work
force, and by the American public. The workers wanted to know whether or not they would
be furloughed, and if so, what the consequences would be with respect to their pay and benefiU.
The public wanted to know whether services they depended upon would be available to them.
I understand that the Administration took a number of actions to inform both the workers
and the public about effect a shutdown of the government would have on them. Whether or not
these actions, and the determination of "What's Essential" which guided them, were reasonable
and adequate should be the focus of today's hearing. I would hope that Members not use this
hearing instead to continue the carping and finger pointing which has surrounded the debate over
the budget.
As we approach December 15th, and the prospect that a shutdown could reoccur, the
public. Members of Congress, agency managers, and Federal and District of Columbia
government workers alike all can benefit from the clarity of policy and procedure that this
hearing could bring.
The Department of Justice has issued three legal opinions addressing the permissible
scope of government operations during a shutdown caused by a lapse in appropriations. The
most recent one was prepared this past August by Assistant Attorney General Walter Dellinger
and was distributed to agencies by the Office of Management and Budget to assist them with the
development of plans for managing a shutdown, were it to occur.
21
The Dellinger opinion states that the Antideficiency Act prohibits the employment of
federaJ personnel in advance of appropriations except in emergencies. It further states that the
emergencies exception applies only to cases of a threat to human life or property where the
threat can be reasonably said to be near at hand and demanding of immediate response. Those
employees who met this test were to be deemed essential and required to work. In addition,
other employees whose jobs are funded with multi-year appropriations, or who meet other
limited exceptions could report to work as well.
This guidance seems quite clear, yet there are reports it was applied inconsistently.
Therefore, it is appropriate for this Subcommittee to examine the manner in which this guidance
was disseminated and the manner in which agencies determined which of their personnel were
essential. The array of witnesses scheduled to appear today should provide that information.
I look forward to their testimony and the insight it will provide.
Thank you, Mr. Chairman.
22
Mr. Mica. I have also had requests, I might say, from a number
of Members now — it's growing — to testify and comment on the
question of the impact of the shutdown and how we proceed. We
are going to hold a Members' panel next Tuesday at 1:30 and give
all of the Members who wish an opportunity to be heard at that
time. If any Members do have a statement they would like to have
made a part of the record today, we will also be glad to include
that in the text. In order to be fair to everyone, I think we will pro-
ceed in that fashion.
I would like to now call our first panel. We have them before us:
Dr. Walter Broadnax, Department of Health and Human Services;
Dwight Robinson, Department of Housing and Urban Development;
Thomas Glynn, Department of Labor; George Muhoz, Department
of the Treasury; Eugene Brickhouse, Department of Veterans Af-
fairs; and Shirley Chater, the Commissioner of the Social Security
Administration.
Some of you have appeared before us before; some of you are new
members. This is an investigations and oversight subcommittee
and committee of Congress, so if you would please stand, I would
like to administer the oath.
[Witnesses sworn.]
Mr. Mica. The witnesses have answered in the affirmative.
Again, I would like to welcome our panelists. Since we have sev-
eral lengthy panels here, we are going to use the 5-minute rule.
You are asked, if you have a lengthy, detailed statement, to submit
it for the record, and it will be made part of the official record. We
would appreciate your summarizing so that the members of the
subcommittee will have an opportunity to discuss and ask ques-
tions.
We will start, first, by having a statement by Dr. Walter
Broadnax, Deputy Secretary of the Department of Health and
Human Services.
Welcome, and you are recognized, sir.
STATEMENTS OF WALTER BROADNAX, DEPUTY SECRETARY,
DEPARTMENT OF HEALTH AND HUMAN SERVICES; DWIGHT
ROBINSON, ACTING DEPUTY SECRETARY, DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT; THOMAS P. GLYNN,
DEPUTY SECRETARY, DEPARTMENT OF LABOR; GEORGE
MUNOZ, ASSISTANT SECRETARY FOR MANAGEMENT AND
CHIEF FINANCIAL OFFICER, DEPARTMENT OF THE TREAS-
URY; EUGENE A. BRICKHOUSE, ASSISTANT SECRETARY FOR
HUMAN RESOURCES AND ADMINISTRATION, DEPARTMENT
OF VETERANS AFFAIRS: AND SHIRLEY CHATER, COMMIS-
SIONER, SOCIAL SECURITY ADMINISTRATION
Mr. Broadnax. Thank you. Chairman Mica and members of the
committee, for the opportunity to speak to you today concerning the
Department of Health and Human Services' implementation of the
recent government shutdown. Mr. Chairman, this is my oral state-
ment. I have submitted my full testimony for the record.
The first casualty of a shutdown is the morale of our employees
who were incorrectly termed "nonessential." I want to make the
point clearly that all HHS employees are essential. During a lapse
in appropriations, some employees may continue to work as a mat-
23
ter of law, others may not; a distinction made by law, not by the
value of their work.
The HHS shutdown plan was developed and implemented in ac-
cordance with existing laws and guidelines contained in the legal
opinions developed by the Department of Justice and 0MB guide-
lines. Consequently, HHS determined that 33,600, or 55 percent, of
our employees would continue to work during the shutdown, be-
cause their work was excepted. HHS had to furlough approximately
27,500, or 45 percent, because their work was not classified in one
of the excepted categories.
The Secretary and the Deputy Secretary kept HHS employees
advised of key developments regarding a possible shutdown. The
Secretary met personally with the heads of HHS operating divi-
sions prior to the shutdown and assured them that she considered
each and every one of our employees and the services that they
provide to be essential. However, it was made clear to them that
normal business would have to be suspended for the duration of
the shutdown, consistent with legal requirements.
I am proud of the efforts made by our shutdown team, who pre-
pared a shutdown plan and managed that plan once 0MB officially
announced a shutdown. Their efforts enabled HHS to proceed in an
orderly manner to implement the shutdown. The team met fre-
quently before and during the shutdown, and provided a vital focal
point for information and guidance about the shutdown.
It was necessary for the team to consider adjustments to the
shutdown plan after initial implementation, since circumstances
changed as the shutdown continued. For example, following the
President's announcement that new Medicare beneficiaries should
be enrolled during the shutdown, HHS identified employees of the
Health Care Financing Administration, HCFA, who provided these
services, and prepared to call them back to work.
What about the costs of shutdown? They are extremely difficult
to determine. Besides employee morale, we know that roughly $5
million a day was lost due to HHS wages and rent. But there were
significant nonpersonnel costs to the shutdown, as well. Each day
we had to turn away 10,000 new Medicare applicants. New pa-
tients could not be accepted into clinical research at the NIH clini-
cal center; an average of 170 patients enter each week. The Cen-
ters for Disease Control ceased disease surveillance; therefore, in-
formation about the spread of disease, such as the flu and AIDS,
was unavailable.
The shutdown gave a holiday to deadbeat dads, since we had to
shut down the parent locator service to which is referred, on aver-
age, 15,000 to 20,000 cases per day. Hotline calls to the NIH con-
cerning diseases could not be answered, and calls to our Inspector
General concerning fraud and abuse could not be referred.
Fortunately, the effects of the shutdown did not have an impact
on some of our customers. For example, the Medicaid and Aid to
Families With Dependent Children programs were already funded
for the first quarter, prior to shutdown, from advanced appropria-
tions, and Medicare claims were paid from trust funds, which were
not affected by the shutdown. But these Medicare claims were paid
by contractors who could not be paid during the shutdown and who
24
would have to cease Medicare payments if their cash ran out due
to a longer hiatus.
The impact of another shutdown on December 15 would be sub-
stantially worse. We would have all the same problems that we en-
countered in November, but we would add to them the lack of
available funding for Medicaid, AFDC, and foster care, and all the
other programs that are due to be funded for the second quarter
on January 1, 1996. These grants are prepared and then awarded
on January 1. This affects approximately 4,500 grant awards, total-
ing more than $28 billion.
Clearly, shutdown of the government is in no one's interest. The
public is left without services that affect the most vulnerable
among us. States are left to support a myriad of services that they
cannot afford alone. Contractors providing excepted services, such
as Medicare claims payment, are left in the position of either float-
ing the government through the crisis or suspending payments.
And employees are told they cannot come to work and do their
jobs providing services, tracking diseases, and caring for the elderly
in the people's department, simply because their job does not meet
the legal definition of an excepted function.
I am sure you will agree that these costs are simply too high for
the country to bear, and therefore we must do all within our power
to avoid another shutdown.
Thank you, Mr. Chairman. I would be happy to answer any ques-
tions the committee may have.
[The prepared statement of Mr. Broadnax follows:!
25
TESTIMONY OF
DR. WALTER BROADNAX, DEPUTY SECRETARY,
DEPARTMENT OF HEALTH AND HUMAN SERVICES
BEFORE THE HOUSE GOVERNMENT REFORM AND OVERSIGHT
SUBCOMMITTEE ON CIVIL SERVICE
HEARING ON HHS IMPLEMENTATION OF THE GOVERNMENT-WIDE SHUTDOWN
DECEMBER 6, 1995
THANK YOU CHAIRMAN MICA AND MEMBERS OF THE COMMITTEE FOR THE OPPORTUNITY TO
SPEAK TO YOU TODAY CONCERNING THE DEPARTMENT OF HEALTH AND HUMAN SERVICES
IMPLEMENTATION OF THE RECENT GOVERNMENT-WIDE SHUTDOWN WHICH RESULTED IN THE
FURLOUGH or ::3,000 FEDERAL V. JRKERS WHO PROVIDE VITAL SERVICES TO THE AMERICAN
PEOPLE.
THE FIRST CASUALTY OF A SHUTDOWN IS MORALE. ESPECIALLY THE MORALE OF OUR
EMPLOYEES WHO WERE INCORRECTLY TERMED "NON-ESSENTIAL". BEFORE TURNING TO SOME
OF THE SPECIFICS OF THE HHS IMPLEMENTATION, I WANT TO MAKE THE POINT TFL\T ALL HHS
EMPLOYEES ARE ESSENTIAL. DURING A LAPSE IN APPROPRIATIONS SOME EMPLOYEES MAY
CONTINUE WITH THEIR WORK AS A MATTER OF LAW; OTHERS MAY NOT. BUT IT IS A
DISTINCTION MADE BY LAW, NOT BY THE VALUE OF THEIR WORK.
OUR FURLOUGHED EMPLOYEES WHO CONTROL AND PREVENT DISEASE ARE ESSENTIAL;
OUR FURLOUGHED EMPLOYEES WHO ISSUE AND MONITOR HEAD START GRANTS ARE
ESSENTIAL;
OUR FURLOUGHED EMPLOYEES WHO INVESTIGATE MEDICARE FRAUD ARE ESSENTIAL.
ALL OF OUR EMPLOYEES ARE ESSENTIAL. THE LAWS AFFECTING SHUTDOWN WILL ALLOW
SOME TO WORK AND OTHERS, I REGRET, WILL NOT BE ALLOWED TO WORK BY LAW.
26
PAGE 2
THE HHS SHUTDOWN PLAN WAS DEVELOPED AND IMPLEMENTED IN ACCORDANCE WITH
EXISTING LAWS AND GUIDELINES CONTAINED IN THE LEGAL OPINIONS DEVELOPED BY THE
DEPARTMENT OF JUSTICE AND OMB GUIDANCE. FOLLOWING THESE REQUIREMENTS, HHS
DETERMINED THAT 33.600 OR 55% OF OUR EMPLOYEES WOULD CONTINUE TO WORK DURING
THE SHUTDOWN BECAUSE THEIR WORK WAS "EXCEPTED":
12,300 CONTINUED TO WORK BECAUSE THEY WERE PROVIDING EITHER DIRECT HEALTH
CARE OR PERFORMING ACTIVITIES INVOLVING THE IMMINENT THREAT TO SAFETY OF
HUMAN LIFE. THIS INCLUDES, FOR EXAMPLE, OUR NATIONAL INSTITUTES OF HEALTH
(NIH) CLINICAL CENTER EMPLOYEES AND OUR INDL\N HEALTH SERVICE EMPLOYEES IN
THEIR HOSPITALS AND CLINICS.
1 1,000 CONTINUED TO WORK BECAUSE THEIR PROGRAMS AND SALARIES WERE NOT
AFFECTED BY A LAPSE IN APPROPRIATIONS (THIS IS PRIMARILY MADE UP OF
EMPLOYEES IN THE FOOD AND DRUG ADMINISTRATION WHOSE APPROPRJATIONS WERE
ENACTED IN THE AGRICULTURE BILL. OTHER EXAMPLES INCLUDE THE AGENCY FOR
TOXIC SUBSTANCES AND DISEASE REGISTRY (ATSDR) EMPLOYEES FUNDED BY THE
SUPERFUND.
5,000 CONTINUED TO WORK BECAUSE THEY HOLD OFFICES ESTABLISHED BY LAW
(PREDOMINANTLY MEMBERS OF THE PUBLIC HEALTH SERVICE COMMISSIONED CORPS).
3,000 CONTINUED TO WORK BECAUSE THEY WERE PERFORMING ACTIVITIES INVOLVING
THE IMMINENT THREAT TO PROTECTION OF PROPERTY. THIS INCLUDES, FOR EXAMPLE,
THE PROTECTION OF OUR ONGOING MEDICAL EXPERIMENTS AND OUR LAB ANIMAL
CARETAKERS IN THE NIH.
2,300 CONTINUED TO WORK TO CARRY OUT THE ACTIVITIES REQUIRED FOR ORDERLY
27
PAGE 3
SHUTDOWN. EXAMPLES OF THESE ACTIVITIES ARE BUDGET, FINANCIAL, AND LEGAL
OPERATIONS NECESSARY DURING THE HL\TUS.
HHS HAD TO FURLOUGH APPROXIMATELY 27,500 OR 45% BECAUSE THEIR WORK WAS NOT
CLASSIFIED IN ONE OF THE ABOVE "EXCEPTED" CATEGORIES.
THROUGH A SERIES OF NEWSLETTERS, ELECTRONIC MAIL, AND OFFICE TO OFFICE VISITS, THE
SECRETARY AND THE DEPUTY SECRETARY KEPT HHS EMPLOYEES ADVISED OF KEY
DEVELOPMENTS REGARDING A POSSIBLE SHUTDOWN AND OF THE PRESIDENT'S COMMITMENT
TO WORK WITH CONGRESS ON A BUDGET BILL THAT WOULD BE BENEFICLVL TO THE AMERICAN
PEOPLE. THE SECRETARY MET PERSONALLY WITH THE HEADS OF HHS OPERATING DIVISIONS
PRIOR TO THE SHUTDOWN AND ASSURED THEM THAT SHE CONSIDERED EVERY ONE OF OUR
EMPLOYEES AND THE SERVICES THAT THEY PROVIDE TO BE ESSENTL\L. HOWEVER, IT WAS
MADE CLEAR TO THEM THAT NORMAL BUSINESS WOULD HAVE TO BE SUSPENDED FOR THE
DURATION OF THE SHUTDOWN CONSISTENT WITH LEGAL REQUIRENffiNTS. THEY WERE ALSO
REMINDED OF THE PENALTIES ASSOCL\TED WITH LACK OF ADHERENCE TO SHUTDOWN
GUIDELINES; NAMELY, THAT THE OBLIGATION OF FUNDS IN ADVANCE OF APPROPRIATIONS
(EXCLUDING THE EXCEPTIONS DISCUSSED ABOVE) IS A VIOLATION OF THE ANTIDEFICIENCY
ACT, WITH PENALTIES RANGING FROM ADVERSE PERSO^INEL ACTIONS TO FINES AND
IMPRISONMENT.'
'TITLE 31, SECTION 1350 OF THE U.S. CODE READS: AN OFFICER OR EMPLOYEE OF THE
UNITED STATES GOVERNMENT OR OF THE DISTRICT OF COLUMBIA GOVERNMENT KNOWINGLY
AND WILLFULLY VIOLATING SECTION 1341(A) OR 1342 OF THIS TITLE SHALL BE FINED
NOT MORE THAN $5,000, IMPRISONED FOR NOT MORE THAN 2 YEARS, OR BOTH.
28
PAGE 4
I AM PROUD OF THE EFFORTS MADE BY OUR SHUTDOWN TEAM, CONVENED BY THE ASSISTANT
SECRETARY FOR MANAGEMENT AND BUDGET AND DEPUTY CFO, WHO CARRIED OUT THE TASK
OF PREPARING A SHUTDOWN PLAN AND MANAGING THAT PLAN ONCE 0MB OFFICIALLY
ANNOUNCED THE SHUTDOWN. THEIR EFFORTS ENABLED HHS TO PROCEED IN AN ORDERLY
AND EFFICIENT MANNER TO NOTIFY AFFECTED EMPLOYEES AND TO IMPLEMENT THE
SHUTDOWN WITHIN THE THREE HOURS SPECIFIED IN OMB GUIDELINES. THE TEAM, WHICH
CONSISTED OF SENIOR MANAGEMENT OFFICIALS IN LEGAL, HUMAN RESOURCES,
PROCUREMENT AND GRANTS POLICY, FINANCE AND OTHER KEY MANAGEMENT AREAS OF THE
DEPARTMENT, MET FREQUENTLY BEFORE AND DURING THE SHUTDOWN. THE TEAM PROVIDED
A FOCAL POINT FOR INFORMATION ABOUT THE SHUTDOWN AND WORKED CLOSELY WITH
DESIGNATED SENIOR MANAGEMENT OFFICIALS ACROSS THE VARIOUS OPERATING AND STAFF
DIVISIONS, INCLUDING REGIONAL OFFICIALS, WHO COORDINATED INFORMATION THROUGH
OUR OFFICE OF INTERGOVERNMENTAL AFFAIRS.
IT WAS NECESSARY FOR THE TEAM TO CONSIDER ADJUSTMENTS TO THE SHUTDOWN PLAN
AFTER INITL^L IMPLEMENTATION. SINCE CIRCUMSTANCES CHANGED AS THE SHUTDOWN
CONTINUED, WE HAD TO EVALUATE ADJUSTMENTS TO THE NUMBER OF EXCEPTED EMPLOYEES.
FOR EXAMPLE, FOLLOWING THE PRESIDENT'S ANNOUNCEMENT THAT AGENCIES SHOULD
REVIEW THEIR SHUTDOWN PLANS IN LIGHT OF THE UNPRECEDENTED LENGTH OF THE
SHUTDOWN, IT WAS DETERMINED THAT NEW MEDICARE BENEFICIARIES SHOULD BE ENROLLED
DURING THE SHUTDOWN. HHS IDENTIFIED EMPLOYEES OF THE HEALTH CARE FINANCING
ADMINISTRATION (HCFA) WHO PROVIDED THESE SERVICES AND PREPARED TO CALL THEM
BACK TO WORK. ALSO, WE WERE PREPARED TO BRING BACK SEVERAL EMPLOYEES TO OUR
PERRY POINT MEDICAL DEPOT TO FILL MEDICAL SUPPLY ORDERS FOR OUR INDIAN HEALTH
SERVICE HOSPITALS. HOWEVER, THE AGREEMENT REACHED BETWEEN THE PRESIDENT AND
29
PAGE 5
CONGRESS TO END THE SHUTDOWN ON NOVEMBER 20 MADE IMPLEMENTATION OF THESE
ACTIONS UNNECESSARY. HAD THE AGREEMENT NOT BEEN REACHED AT THAT TIME,
APPROXIMATELY 100 EMPLOYEES WOULD HAVE BEEN RETURNED TO DUTIES THAT, DUE TO
THE PROLONGED SHUTDOWN, HAD DEVELOPED INTO SAFETY OF HUMAN LIFE OR PROPERTY
STATUS.
WHAT ABOUT THE COSTS OF SHUTDOWN? THEY ARE EXTREMELY DIFFICULT TO DETERMINE.
BESIDES EMPLOYEE MORALE, WE KNOW THAT ROUGHLY $5 MILLION A DAY WAS LOST DUE TO
HHS WAGES AND RENT. BUT THERE WERE SIGNIFICANT NON-PERSONNEL COSTS TO THE
SHUTDOWN AS WELL:
EACH DAY WE HAD TO TURN AWAY 10,000 NEW MEDICARE APPLICANTS;
NEW PATIENTS COULD NOT BE ACCEPTED INTO CLINICAL RESEARCH AT THE NIH
CLINICAL CENTER (AN AVERAGE OF 170 PATIENTS ENTER EACH WEEK).
THE CENTERS FOR DISEASE CONTROL CEASED DISEASE SURVEILLANCE. THEREFORE,
INFORMATION ABOUT THE SPREAD OF DISEASE SUCH AS THE FLU AND AIDS WAS
UNAVAILABLE.
THE SHUTDOWN GAVE A HOLIDAY TO "DEADBEAT" DADS SINCE WE HAD TO SHUT
DOWN THE PARENT LOCATOR SERVICE TO WHICH IS REFERRED, ON AVERAGE, 15-20
THOUSAND CASES PER DAY.
40-190 97 - 2
30
PAGE 6
HOT LINE CALLS TO THE NIH CONCERNING DISEASES COULD NOT BE ANSWERED AND
CALLS TO OUR INSPECTOR GENERAL CONCERNING FRAUD AND ABUSE COULD NOT BE
REFERRED.
FORTUNATELY, THE EFFECTS OF THE SHUTDOWN DID NOT HAVE AN IMPACT ON SOME OF OUR
CUSTOMERS. FOR EXAMPLE, THE MEDICAID AND AID TO FAMILIES WITH DEPENDENT
CHILDREN PROGRAMS WERE ALREADY FUNDED FOR THE FIRST QUARTER PRIOR TO SHUTDOWN
FROM ADVANCE APPROPRL\TIONS AND MEDICARE CLAIMS WERE PAID FROM TRUST FUNDS
WHICH WERE NOT AFFECTED BY THE SHUTDOWN. BUT THESE MEDICARE CLAIMS WERE PAID
BY CONTRACTORS WHO COULD NOT BE PAID DURING THE SHUTDOWN AND WHO WOULD HAVE
TO CEASE MEDICARE PAYMENTS IF THEIR CASH RAN OUT DUE TO A LONGER HIATUS.
OTHER PROGRAMS HAD RECEIVED SMALL GRANTS UNDER THE TERMS OF THE FIRST
CONTINUING RESOLUTION TO TIDE THEM OVER THE FUNDING CRISIS. BUT IF THE SHUTDOWN
HAD CONTINUED -- OR IF IT OCCURS AGAIN -- MANY OF THOSE SERVED BY THESE PROGRAMS
- THE VERY YOUNG, THE AGED, THE DISABLED - WOULD BE DENIED CRITICALLY-NEEDED
SERVICES. FOR EXAMPLE, ON DECEMBER 1, 1995, APPROXIMATELY 122 HEAD START
PROGRAMS, SERVING 60,000 CHILDREN, WERE SCHEDULED TO RECEIVE THEIR GRANTS. IN THE
ADMINISTRATION ON AGING PROGRAMS WHICH PROVIDE COMPREHENSIVE SERVICES,
INCLUDING MEALS, TO MANY SENIOR CITIZENS, SOME STATES INDICATED THAT THEY WOULD
PROBABLY HAVE HAD TO CLOSE THEIR SERVICE DELIVERY PROGRAMS IF THE SHUTDOWN HAD
CONTINUED MUCH LONGER. AT NIH, BESIDES DISRUPTION TO THE MANY RESEARCH RENEWAL
GRANTS, WE ESTIMATE THAT AS MANY AS 2,000 NEW AND COMPETING AWARDS SCHEDULED
TO BE FUNDED ON DECEMBER 1, 1995 WOULD HAVE HAD TO BE DELAYED UNTIL FUNDS WERE
AVAILABLE. OBVIOUSLY, THE LONGER THE SHUTDOWN, THE MORE DISASTROUS THE EFFECTS
31
PAGE 7
WOULD BE ON THESE PROGRAMS WHICH AFFECT THE MOST VULNERABLE POPULATIONS.
THE IMPACT OF THE NOVEMBER SHUTDOWN WAS BAD ENOUGH; BUT THE IMPACT OF ANOTHER
SHUTDOWN ON DECEMBER 15 WOULD BE SUBSTANTIALLY WORSE. WE WOULD HAVE ALL THE
SAME PROBLEMS THAT WE ENCOUNTERED IN NOVEMBER, BUT WE WOULD ADD TO THEM THE
LACK OF AVAILABLE FUNDING FOR MEDICAID, AFDC, AND FOSTER CARE, AND ALL THE OTHER
PROGRAMS THAT ARE DUE TO BE FUNDED FOR THE SECOND QUARTER ON JANUARY I, 1996.
THESE GRANTS ARE PREPARED AND THEN AWARDED ON JANUARY I. THIS AFFECTS
APPROXIMATELY 4,500 GRANT AWARDS TOTALING MORE THAN $28 BILLION DOLLARS.
EXAMPLES OF VULNERABLE POPULATIONS IMPACTED INCLUDE: 13 MILLION AFDC RECIPIENTS;
273,000 FOSTER CARE CHILDREN; OVER 100,000 CHILDREN RECEIVING ADOPTION ASSISTANCE
SERVICES; AND OVER 100,000 HEAD START KIDS.
IN ADDITION, WE ARE CONCERNED ABOUT THE LONG RANGE IMPACT ON OUR EMPLOYEES.
DURING THE NOVEMBER SHUTDOWN, WE PROVIDED OUR EMPLOYEES WITH INFORMATION ON
APPLYING FOR UNEMPLOYMENT COMPENSATION IN ORDER TO COVER POTENTL\L CASH-FLOW
PROBLEMS. IF A LENGTHY SHUTDOWN WERE TO OCCU" IN MID-DECEMBER, EXTENSIVE
EFFORTS WOULD HAVE TO BE MADE TO ADVISE EMPLOYEES ABOUT ALTERNATIVE
EMPLOYMENT AND THE AVAILABILITY OF UNEMPLOYMENT BENEFITS.
CLEARLY, SHUTDOWN OF THE GOVERNMENT IS IN NO ONE'S INTERESTS. THE PUBLIC IS LEFT
WITHOUT SERVICES THAT AFFECT THE MOST VULNERABLE AMONG THEM. STATES ARE LEFT
TO SUPPORT A MYRL\D OF SERVICES THAT THEY CANNOT AFFORD ALONE. CONTRACTORS
PROVIDING EXCEPTED SERVICES SUCH AS MEDICARE CLAIMS PAYMENT ARE LEFT IN THE
POSITION OF EITHER FLOATING THE GOVERNMENT THROUGH THE CRISIS OR SUSPENDING
PAYMENTS. AND EMPLOYEES ARE TOLD THEY CANNOT COME TO WORK AND DO THEIR JOBS
32
PAGES
PROVIDING SERVICES, TRACKING DISEASES, AND CARING FOR THE ELDERLY IN THE "PEOPLES-
DEPARTMENT SIMPLY BECAUSE THEIR JOB DOES NOT MEET THE LEGAL DEFINITION OF AN
"EXCEPTED" FUNCTION. I'M SURE YOU WILL AGREE THAT THESE COSTS ARE SIMPLY TOO
HIGH FOR THE COUNTRY TO BEAR AND THEREFORE, WE MUST DO ALL WITHIN OUR POWER TO
AVOID ANOTHER SHUTDOWN.
THANK YOU MR. CHAIRMAN AND I WOULD BE HAPPY TO ANSWER ANY QUESTIONS THE
COMMITTEE MAY HAVE.
33
Mr. Mica. I thank you, Dr. Broadnax. We are going to withhold
questions till we finish the panel.
I would like to recognize now Mr. Dwight Robinson, who is acting
Deputy Secretary of the Department of Housing and Urban Devel-
opment.
Mr. Robinson. Thank you, Mr. Chairman and good morning.
I want to thank you for this opportunity to discuss the planning,
implementation, and oversight of the recent shutdown of the gov-
ernment, including the Department of Housing and Urban Develop-
ment. We believe that our actions followed the law, directions from
0MB, the Department of Justice, and what was necessary under
the regrettable circumstances. We are pleased to be able to answer
your questions and to discuss with your committee how we thought
through the process and how the plan unfolded.
Like most Federal agencies, HUD had experienced short-term
shutdowns before, although the most recent lasted just a half day
in 1990. In compliance with a series of 0MB bulletins issued over
the last 15 years, we had in place general guidance and procedures
for implementing a shutdown. That possibility grew stronger late
in the summer. In August and early September, the Department
undertook a thorough legal review of opinions from the Department
of Justice, and we also examined 0PM instructions and 0MB guid-
ance to update and add detail to our plan for operations during a
funding lapse.
The plan was submitted and reviewed by 0MB in September.
The plan is conceptual rather than administrative. It reviews each
of the programs for which the Department is responsible, in terms
of its legal authority to continue activities under the applicable
statutes.
What we found was that the length of the funding hiatus really
determines the work that can be done. In a 1- or 2-day lapse in
funding, we require only minimal emergency staff to protect life
and property, and provide for an orderly shutdown of activities.
But a longer shutdown would require more HUD staff to perform
activities necessary to protect life and property.
In October, we developed a contingency plan containing the ad-
ministrative procedures and personnel guidance for implementing
a shutdown. Employees were told of the possibility of a shutdown,
advised of their personnel rights, and told how a furlough would
affect benefits and emplojmient. Employees, over a 2-week period,
were provided with materials.
As we neared the critical date, assistant secretaries and program
managers were asked to provide specific plans for a short-term
shutdown, keeping only those few employees who would be protect-
ing life and property or conducting the shutdown itself.
On Monday before the shutdown, November 13, through a head-
quarters public address system and a national conference call, the
Secretary addressed all HUD staff, explaining the impending fund-
ing problems and the possibility of a furlough.
The shutdown began on the morning of Tuesday, November 14.
0MB provided the official notice that employees should be released.
Those employees who were excepted, per the plan, were provided
with a letter containing the emergency conditions under which they
34
were retained. All other employees were provided with a furlough
letter and other personnel guidance.
Once again, the Secretary informed employees by conference call,
facsimile transmission, and over the public address system in head-
quarters of the shutdown. The shutdown was executed orderly.
About 400 HUD employees were excepted during this period, and
about 11,000 were furloughed. Consistent with our long-term plans,
during the week we determined that we would need to bring back
on board additional furloughed employees, if the funding lapse con-
tinued beyond a week or so.
For example, HUD provides operating subsidies and moderniza-
tion funds to 3,400 local housing agencies, who in turn provide pub-
lic housing and services to 1.4 million low-income households.
These funds are drawn down by public housing authorities on a
daily basis, as needed. Additional HUD public housing employees
would have been needed to provide these funds of about $25 million
per day.
On Thursday, November 16, discussions were held on providing
additional staff with 0MB. By the weekend, we had a plan to in-
crease emergency staff to meet critical needs in public business. As
it happened, the crisis was over before this next step took place.
We have found that planning for contingencies is not a static
process when planning for an event that is unknown. Longer shut-
downs require a continuous assessment of staffing in order to
gauge when the absence of providing some government function
would cause an impending threat to life and property. We believe
that our planning process worked the way it should have worked,
within the law and the regulations, and with enough flexibility to
adjust to circumstances.
Thank you for this opportunity to discuss these matters. We have
provided material to your staff in response to your specific request
for documentation, and I would be happy to answer your questions.
Mr. Mica. Thank you.
I now recognize Thomas Glynn, the Deputy Secretary of the De-
partment of Labor.
Mr. Glynn. Thank you, Mr. Chairman.
We appreciate this opportunity to appear before the committee
this morning to discuss the planning and implementation of the
shutdown plans at the Labor Department. I, too, am going to sum-
marize my statement which will be submitted for the record.
I thought it might be useful to just spend a minute on the histor-
ical perspective of the Department on the question of shutdowns.
The Department of Labor has developed shutdown plans regularly
for more than a decade. Since 1985, only in 2 years, fiscal year
1989 and fiscal year 1995, did we have an appropriation on October
Therefore, in 10 out of the 12 most recent years, we have had
to prepare for the possibility of a shutdown. Some years we have
had a continuing resolution on October 1, and other years we
haven't. This is probably particularly related to the history of the
Labor/HHS/Education appropriation and sometimes the difficulties
it has had getting through both Houses.
The basis for the Department of Labor plan, as it has been re-
vised on an almost annual basis, goes back to the guidance from
35
0MB in 1980, revised by Director Stockman in 1982, and the memo
from Attorney General Civiletti in 1981. The Department of Labor's
plan is actually published as a document entitled, "Suspension of
Operations" Guidance.
This document delineates the steps necessary to complete an or-
derly shutdown. It requires each unit to develop a plan, and it re-
quires each plan to have a listing of excepted employees in several
categories: one, those who are in the category of protecting an im-
minent threat to life and property; two, those in the category who
manage mandatory benefit programs; three, those whose funding is
not subject to annual appropriation; and, four, the support staff
necessary to perform the above three functions. In addition, each
unit is responsible for developing a list of employees essential to
shut down the department on a temporary basis.
In an effort to just touch on the questions which we were asked
to address this morning, I would say, in terms of the process fol-
lowed at the Department, we began with our published plan, as it
has developed over the last 10 or 15 years, conducted an August
review, received the memo from 0MB in late August, and commu-
nicated to our agencies the need to develop plans by early Septem-
ber.
They were transmitted to 0MB in late September. A number of
questions were raised by 0MB, and changes were made so that we
had a final plan by the middle of November, which proposed 3,000
excepted employees and 470 essential employees.
On the question of the control agency guidance, I think we re-
ceived approximately 10 communications from 0MB, 0PM, and the
Justice Department between August 1 and mid-November. And I
think, speaking for the Department of Labor, we found the 0MB
to be cooperative and responsive to our questions, without trying
to micromanage every decision that needed to be made at the De-
partment of Labor.
On the question of oversight, all the plans and modifications
were reviewed by our Solicitor's Office, our Budget Office, and by
0MB for the policy questions that they would raise. The informa-
tion that we disseminated to our employees was similar to what
you have heard from the Department of HHS and HUD. The costs
to the Department of Labor we calculate at about $7.3 million, in
payroll costs, for employees who did not work during that period.
Mr. Chairman, that summarizes the Department of Labor shut-
down plan and implementation. I thank you for the chance to ap-
pear, and I would be happy to answer any questions or submit any
further documentation that the committee might require.
[The prepared statement of Mr. Glynn follows:]
36
STATEMENT OF THOMAS P. OLYMN
DEPOTY SECRETARY OF LABOR
BEFORE THE
SOBCOMMITTEE ON CIVIL SERVICE
COMMITTEE ON QOVERNMENT REFORM AND
OVERSIGHT
UNITED STATES HOOSE OF REPRESENTATIVES
DECEMBER 6, 1995
Mr. Chairman and Distinguished Members of the Subcommittee:
I appreciate this opportunity to appear before the Committee
to review our experience during the recent lapse in funding for
the Department of Labor (DDL) .
I believe that we did an effective job planning, managing
and implementing the shutdown of the Department in mid-November
while holding to a minimum the negative impacts these actions
could have had on Ame^-ica's workers and their families. We also
endeavored to minimize morale problems among the 17,000 employees
in the Department.
Historical Perspective
DOL has regularly developed plans for more than a decade to
address the possibility of funding interruptions. Since 1985, FY
1989 and FY 1995 were the only two years when DOL had a full year
appropriation enacted prior to the start of the fiscal year.
Stated another way, DOL has not had a full-year appropriation on
October 1 in 10 of the last 12 fiscal years.
OMB issued broad guidance concerning a government shutdovm
37
in 1980 and revised it in 1982. That revision issued by 0MB
Director David Stockman has been the basic building block for all
shutdown plans and has been changed only slightly since then as
noted below. This guidance relied heavily on Attorney General
Civiletti's 1981 opinion regarding the Anti-deficiency Act. This
opinion identified the types of operations that may continue and
those that may not.
For more than a decade, based on government-wide policy
guidance such as the Stockman issuance, the Department has had in
place a published procedure entitled. Continuing Resolution and
Suspension of Operation Procedures. This guidance generally lays
the foundation for the administrative control of funds, and
specifically delineates the steps that need to be taken by
Departmental staff — usually during the summer — to prepare for
a funding interruption when it appears unlikely that funding will
be enacted prior to October 1, the start of the fiscal year. The
DOL policy requires that every Departmental agency develop a
general contingency or shutdown plan for the suspension of
operations if there is no DOL appropriation or continuing
resolution enacted by October 1. The plans contain the following
listings:
o excepted employees, which includes (1) personnel recjuired
to protect against imminent threat to life and property, (2)
staff who are excepted by implication, such as all excepted
employees in the Office of Workers Compensation Programs who
are ensuring the continuation of FECA, Longshore, and Black
38
Lung benefits, funds for which remain legally available
despite the lapse in annual appropriations, and (3)
employees where the underlying funding for their mission is
not controlled by the annual appropriation process.
o employees performing the duties of closing the Department
— building engineers, certain security staff, payroll,
accounting personnel, and the staff who are required to
phase down certain enforcement and grant programs. The
Solicitor reviewed the DOL agencies' designations of
excepted activities and the resulting staffing implications.
This past August we conducted a review of previous funding
interruptions and existing suspension of operations procedures
and plans. We brought them up to date, and provided senior
management with a detailed review of the law and previous
experience. The Department worked with the central management
agencies -- 0MB and 0PM -- to clarify existing requirements and
obtain the latest information in these areas.
In your letter of invitation, you requested that I respond
to a series of questions. My testimony generally addresses these
questions.
I will begin with a brief chronology of the actions taken in
this area by the Department prior to the suspension of
operations.
39
Shutdown Plan Development
On August 29, 1995, the Assistant Secretary for
Administration and Management issued a memorandum directing all
DOL agencies to prepare suspension of operations plans. The
starting point was the Agency plans developed in prior years when
a funding lapse was anticipated. Agency plans were required to
contain a detailed list of all activities which are functions the
agency is authorized by law to perform without regard to the
availability of an appropriation. One list was required for
excepted activities. A second list delineated the functions
necessary for the orderly suspension of operations. The plans
were also to include lists of employees performing excepted
activities and lists of employees managing an orderly shutdown.
Once again, agencies were asked to review the designation of
excepted activities and to consult with the Solicitor regarding
any proposed modifications. The Office of the Solicitor
reviewed the DOL agencies' designations of excepted activities
and the resulting staffing implications. Other issues such as
notification to employees on furloughs, reporting to work,
procedures for employees on travel, and for contractors were
typically included in these plans. •
To assist agencies in preparing their shutdown plans, the
Assistant Secretary for Administration and Management,
Solicitor's Office, the Office of Budget, and IX)L's Personnel
Officer met with agency administrative officers to discuss
various issues and concerns on how to proceed prior to and during
40
a government -wide shutdown.
During the month of September, agencies submitted their
plans for operations during a shutdown. These plans were
reviewed, revised, compiled and sent to 0MB. 0MB reviewed and
offered comments to ensure consistency across agencies. Those
comments were considered and, along with continued internal
review, resulted in modification of the plans.
Agencies continued to revise their plans in consultation
with the Solicitor and a revised plan was sent to 0MB on November
17 which included approximately 3 , 000 employees in excepted
activities and 470 employees for the orderly suspension of
operations.
Central Agency Guidance
Formal guidance was received in the form of several
docun.ents:
On August 22, 1995, 0MB forwarded a revised Department of
Justice opinion on shutdown activities resulting from the 1990
amendment to the Antidef iciency Act. The opinion further details
the necessary conditions to conclude that an activity meets the
legal test of excepted activities.
A November 9 directive (M-96-01) from 0MB Director Alice
Rivlin updated Departments on recent developments and provided
guidance regarding the implementation of an orderly suspension of
operations.
A Memorandum (M-96-03) was received from 0MB Director Alice
41
Rivlin on November 14 advising that funding for the period
covered by the first continuing resolution had expired and that
agencies were to implement close down plans. The DOL shutdown
plan was implemented, non-excepted staff were placed in furlough
status, and the Department began closing its operations.
On November 16, the DOJ issued guidance concerning
participation in congressional hearings during a shutdown.
A memorandum from John A. Koskinen, 0MB 's Deputy Director
for Management dated November 16, 1995, provided guidance to
political appointees and other officials and their activities
during periods of shutdown.
Number and Functions of Excepted Employees/Types of Excepted
Activities
The suspension of operations plan for DOL specified that the
number of employees urloughed was approximately 13,900 and that
roughly 3,000 employees were designated as excepted and 470 were
identified to perform and manage the orderly suspension of
operations and continued to work. Examples of these functions
include:
> 2 00 OSHA staff to conduct safety enforcement in
imminent danger situations, investigation of workplace
fatalities, and reports of hazardous conditions presenting a
high risk of serious physical harm in the near future.
> 1,100 MSHA staff for targeted hazard specific and
complaint based inspections of mines.
42
> 1,000 ESA staff for continuing Workers Compensation
Programs and investigating emergencies.
> And several hundred additional staff working to protect
the assets of pension and welfare plans in imminent danger
and other staff involved in certain enforcement and grant
programs.
The number of employees in these categories have not varied
substantially over the years.
In our initial suspension of operations plan submitted to
OMB in late September, DOL had close to 4,200 personnel in
excepted activities and performing functions in order to bring
about an orderly suspension of operations. The final suspension
of operations plans for DOL submitted to OMB on November 17, 1995
reduced the number of employees designated by approximately 750.
This was due to: 1) a reduction in management and administrative
staff; and 2) the Solicitor's advice concerning the definition of
types of activities deemed to be excepted.
Shutdown Implementation Oversight
Agencies requesting certain activities be considered
excepted were required to submit their proposals to the Solicitor
for review. The Assistant Secretary for Administration and
Management met with DOL executive staff from the agencies to
review the plans from the management point of view. The
Solicitor reviewed the plans for consistency with the applicable'
laws.
43
As I described earlier, 0MB reviewed the DOL plans to ensure
consistency with plans of other agencies and suggested revisions
which were incorporated into those plans.
Inforaation Provided to Employees
Employees were provided with continuous and extensive
information concerning pay, benefits, employment outside the
government, and unemployment benefits. We utilized newsletters
and memoranda from the Secretary. Affected employees were sent
furlough notices on November 16th. The notices explained when
the furlough became effective, provided a hot-line telephone
number to call for information, and provided additional
information concerning unemployment compensation information, and
grievance procedures.
Shutdown Materials
Copies of materials on shutdown that were provided to DOL
employees will be supplied to the Committee separately.
Shutdown Costs
In terms of the costs associated with the DOL shutdown,
approximately $7.3 million was paid to DOL employees that did not
work during this period. There were other less significant costs
such as postage for furlough notices totaling $8,000, and related
printing, copy costs and paper, which cost an additional $3,900.
44
Assunptlons About the Length of sbutdovn
The Department made no assumptions about the length of the
shutdown. However, our plans recognized that one-time
emergencies could occur and that we could need to recall the
appropriate staff to respond to new circumstances threatening
life and property. Therefore, the mix of employees could change
at any point in time.
Impact of Shutdown Length on Exempted Employees
The Department's plans included contingencies as I have
just described. Our plans did not need to be modified solely on
the basis of the duration of shutdown. For example, the plans
indicate that agencies would furlough most of the employees
associated with bringing agency functions to an orderly
suspension of operations when concluded. Thus as time
progressed, the employee mix would change.
Debt Ceiling and Shutdown
A cash problem created by reaching the Federal borrowing
limit would raise quite different questions that are best
addressed by officials of the Treasury Department.
This concludes my prepared statement Mr. Chairman. I would
certainly be glad to answer any questions that you or other
members of the Subcommittee may have.
45
Mr. Mica. Thank you.
I now recognize George Mufioz, Assistant Secretary for Manage-
ment and Chief Financial Officer of the Department of the Treas-
ury.
Mr. MUNOZ. Good morning, Mr. Chairman.
I am pleased to be here, on behalf of Secretary Rubin, to testify
on the Treasury Department's plans for and implementation of the
recent partial shutdown of the Federal Government between No-
vember 14 and November 19, 1995. I, too, will submit my formal
presentation for the record and just want to highlight portions
thereof.
From the beginning. Treasury has approached this issue in a
very methodical manner. Our process was managed taking into ac-
count the interests of the American public and Treasury employees,
within the legal parameters. This is not a matter that any of us
looked forward to, but given that it was necessary, we made it run
as smoothly as possible.
To understand the impact of the shutdown it is important to
keep in mind that the Treasury Department has 11 bureaus, all of
which serve an important role in the overall government's respon-
sibilities, with functions that are broad and critical to the Nation's
well-being.
One of the concerns that we identified in planning for the shut-
down was the unfortunate misuse of the terms "essential" and
"nonessential." We very much agree with the statements earlier
made by Representative Morella on this matter. This terminology
was not used in any of our shutdown plans. I know that I speak
on behalf of the Secretary when I say that these are inappropriate
terms that mistakenly convey a sense of relative importance among
Federal employees. They perpetuate the false impression that some
Federal workers perform jobs that are trivial or unnecessary.
Every day Federal workers provide valuable service for the
American taxpayer. Instead, our determinations of the work that
can and cannot continue in the absence of appropriations are based
on the Antideficiency Act's requirements and not on the basis of
some abstract judgment of workers' value.
In August, we put together a review team that examined all of
the plans from our bureaus to ensure that those plans were consist-
ent with the applicable legal principles that were well thought out
and clearly communicated. The Treasury Department performed
well only because in this review team we had representatives start-
ing at the top with Secretary Rubin, myself, members of our CFO
Organization, members of the General Counsel under Ed Knight,
our Personnel Office, and our general managers.
It was due to this review team that we were able to review our
bureaus' plans and give guidance to them so that their plans would
be complete and well communicated to all employees. Once the
shutdown was ordered by 0MB, we used the network of bureau
shutdown coordinators which we had established and the bureau
heads to instruct them to begin implementation of their shutdown
plans. The bureaus and the department began issuing furlough no-
tices and ordered nonexcepted employees to begin to shut down of
their operations and go home once that process was completed.
46
We established a hotline, which was in effect on the day of the
shutdown, with the purpose of informing all Treasury employees of
the status of the shutdown. This hotline proved effective and per-
mitted questions to be answered. During the shutdown, our depart-
mental review team continued to meet to evaluate exception re-
quests that became necessary as circumstances changed.
Through conference calls initiated twice daily between the de-
partment review team and the shutdown coordinators in the bu-
reaus, we provided continuous communication to the bureaus on
the status of appropriations action, as well as answering oper-
ational questions. We also used this team to ensure that depart-
mental operations were back to normal as soon as possible after
the Treasury Department shutdown was ended.
In general, the system that was put in place worked extremely
well and facilitated rapid and coordinated communications with
Treasury's 154,000 employees, easing, to the extent possible, the
negative effects on morale, and minimizing the negative impacts of
the shutdown on productivity.
Mr. Chairman, you have provided the Secretary with a list of
questions to be answered, and the Department's written answers to
these questions address in more detail our management of the
process. We will be providing these answers for the record; we hope
that you will find them complete. Please have your staff get back
to us if there are any further extensions on those answers.
This concludes my oral remarks.
[The prepared statement of Mr. Munoz follows:]
47
NOT TO BE RfXEASED BEFORE
9:00 AM ON DECEMBER 6, 1995
STATEMENT OF
GEORGE MUSOZ
ASSISTANT SECRETARY FOR MANAGEMENT AND CFO
DEPARTMENT OF THE TREASURY
BEFORE THE
HOUSE CIVIL SERVICE SUBCOMMITTEE
DECEMBER 6, 1995
MR. CHAIRMAN, I AM PLEASED TO BE HERE ON BEHALF OF THE
SECRETARY TO TESTIFY ON THE TREASURY DEPARTMENT'S PLANS FOR AND
IMPLEMENTATION OF THE RECENT PARTIAL SHUTDOWN OF THE FEDERAL
GOVERNMENT BETWEEN NOVEMBER 14 AND NOVEMBER 19, 1995. FROM THE
BEGINNING. TREASURY HAS APPROACHED THIS ISSUE IN A VERY METHODICAL
MANNER. OUR PROCESS WAS MANAGED TAKING INTO ACCOUNT THE INTEREST
OF THE AMERICAN PUBLIC AND TREASURY EMPLOYEES WITHIN THE LEGAL
CONFINES. THIS IS NOT A MATTER THAT ANY OF US LOOKED FORWARD TO, BUT,
GIVEN ITS NECESSITY. IT RAN AS SMOOTHLY AS POSSIBLE.
TO BEST UNDERSTAND THE IMPACT OF THE SHUTDOWN, IT'S IMPORTANT
TO UNDERSTAND THAT THE TREASURY DEPARTMENT SERVES AN IMPORTANT
ROLE IN THE OVERALL GOVERNMENT'S RESPONSmiUTIES, WITH FUNCTIONS
THAT ARE BROAD AND CRmCAL TO THE NATION'S WELL-BEING. THESE
FUNCTIONS INCLUDE SUCH IMPORTANT ONES AS:
♦ COLLECTING THE PROPER AMOUNT OF TAXES;
♦ DISBURSING PAYMENTS TO OVER 100 MILLION CITIZENS
ANNUALLY;
♦ ENFORCING LAWS RELATED TO TARIFF AND TRADE, SMUGGLING OF
DRUGS AND CONTRABAND;
♦ PROTECTION OF THE PRESIDENT, VICE PRESIDENT AND OTHERS;
48
• MANUFACTURING OF CURRENCY AND COINS, AND
♦ REGULAnON OF BANKS A>JD THRIFT INSTITUTIONS.
ONE OF THE CONCERNS THAT WE IDENTIFIED IN PLANNING FOR THE
SHUTDOWN WAS THE UNFORTUNATE MISUSE OF THE TERMS "ESSENTIAL" AND
"NON-ESSENTL\L " THIS TERMINOLOGY WAS NOT USED IN ANY OF OUR
SHUTDOWN PLANS I KNOW THAT I SPEAK ON BEHALF OF THE SECRETARY
WHEN I SAY THAT THESE ARE INAPPROPRIATE TERMS THAT MISTAKENLY
CONVEY A SENSE OF RELATIVE IMPORTANCE AMONG FEDERAL EMPLOYEES.
THEY PERPETUATE THE FALSE IMPRESSION THAT SOME FEDERAL WORKERS
PERFORM JOBS THAT ARE TRIVIAL OR UNNECESSARY. EVERY DAY, FEDERAL
WORKERS PROVIDE VALUABLE SERVICE FOR THE AMERICAN TAXPAYER.
INSTEAD. OUR DETERMINATIONS OF THE WORK THAT CAN AND CANNOT
CONTINUE IN THE ABSENCE OF APPROPRIATIONS ARE BASED ON THE ANTI-
DEFICIENCY ACT'S REQUIREMENTS, AND NOT ON THE BASIS OF SOME
ABSTRACT JUDGEMENT OF WORKERS' "VALUE." SOME OF THE MOST
IMPORTANT WORK OF THE DEPARTMENT WAS CONSIDERED "NON-EXCEPTED"
BECAUSE A DELAY IN HS PERFORMANCE WOULD NOT IMMEDIATELY
JEOPARDIZE LIFE AND PROPERTY.
OUR PLANNING PROCESS STARTED BACK IN JUNE 1995, WHEN IT BECAME
APPARENT THAT WE SHOULD BEGIN PLANNING FOR A POSSIBLE LAPSE IN
APPROPRIATIONS AFTER OCTOBER 1 OUR PREVIOUS GUIDANCE WAS ISSUED IN
1991 . INITIALLY, WE MODIFIED AND EXPANDED THIS EARLIER GUIDANCE TO
PROVIDE AS MUCH INFORMATION AS POSSIBLE TO OUR BUREAUS IN ORDER FOR
THEM TO DEVELOP THEIR OWN PLANS I ISSUED THAT GUIDANCE TO ALL
TREASURY BUREAUS ON JULY 1 7, 1995. REQUESTING THAT THE BUREAUS
SUBMn THEIR UPDATED SHUTDOWN PLANS TO THE DEPARTMENT IN AUGUST
FOR REVIEW.
49
IN AUGUST. WE PUT TOGETHER A REVIEW COMMITTEE TO EXAMINE ALL
BUREAU PLANS AND TO ENSURE THAT THOSE PLANS WERE CONSISTENT WITH
APPUCABLE LEGAL PRINCIPLES, WELL THOUGHT OUT. AND CLEARLY
C(»1MUNTCATED. IN ADDmON, JUSTMCATIONS FOR "EXCEPTED" POSmONS
AND FUNCTIONS WERE REVIEWED FOR CONSISTENCY WTTH THE ATTORNEY
GENERAL'S (AG) 1981 OPINION, AS UPDATED BY THE 1995 OPINION BUREAU
PLANS ALSO WERE REQUIRED TO ADDRESS THE DIFFERING IMPACTS OF SHORT-
TERM AND LONG-TERM SHUTDOWNS, AND PROVIDE FOR PHASING OVER THE
COURSE OF THE SHUTDOWN.
THE REVIEW COMMTITEE CONDUCTED FTS REVIEW IN AUGUST AND
EARLY SEPTEMBER, NOTIFYING ME OF ITS FINDINGS. BASED ON THESE
REVIEWS, WE BRIEFED THE SECRETARY AND OTHER TREASURY OFnCIALS ON
THE TOTAL IMPLEMENTATION PLAN FOR THE DEPARTMENT. MEMORANDA
WERE TRANSMITTED TO BUREAUS REQUESTING MODfflCATIONS, AS
NECESSARY, AND/OR NOTIFYING THEM OF ACCEPTANCE OF THEIR SHUTDOWN
PLANS.
THE RESULTS OF THIS REVIEW WERE A PROCESS THAT FURLOUGHED
APPROXIMATELY THREE OF EVERY FOUR TREASURY DEPARTMENT EMPLOYEES
DURING THE NOVEMBER 4 TO 19 TIME FRAME. MANY OF THE REMAINING
EMPLOYEES WERE COVERED BY OTHER FUNDING AUTHORITIES, SUCH AS
REVOLVING FUNDS, AND ARE NOT SUBJECT TO THE ANNUAL APPROPRIATIONS
PROCESS.
ONCE THE SHUTDOWN WAS ORDERED BY 0MB. WE USED THE NETWORK
OF BUREAU SHUTDOWN COORDINATORS AND BUREAU HEADS TO INSTRUCT
THEM TO BEGIN IMPLEMENTATION OF THEIR SHUTDOWN PLANS. THE BUREAUS
AND THE DEPARTMENT BEGAN ISSUING FURLOUGH NOTICES AND ORDERED
"NON-EXCEPTED" EMPLOYEES TO BEGIN TO SHUTDOWN THEIR OPERATIONS
50
AND GO HOME ONCE THAT PROCESS WAS COMPLETED. THE SECRETARY
PERSONALLY SPOKE AT A TOWN MEETING OF TREASURY EMPLOYEES THE DAY
BEFORE THE SHUTDOWN TO ADDRESS EMPLOYEE CONCERNS AND QUESTIONS.
A HOTLINE WAS PUT INTO EFFECT ON THE DAY OF THE SHUTDOWN WITH
THE PURPOSE OF INFORMING ALL TREASURY EMPLOYEES OF THE STATUS OF
THE SHUTDOWN. THIS HOTLINE PROVED EFFECTIVE AND PERMITTED
QL'ESTIONS TO BE ADDRESSED. DURING THE SHUTDOWN, OUR DEPARTMENT AL
REVIEW TEAM CONTINUED TO MEET TO EVALUATE EXCEPTION REQUESTS THAT
BECAME NECESSARY AS CIRCUMSTANCES CHANGED. THROUGH CONFERENCE
CALLS INITL\TED TWICE DAILY BETWEEN THE DEPARTMENTAL REVIEW TEAM
AND THE SHUTDOWN COORDINATORS IN THE BUREAUS, WE PROVIDED
CONTINUOUS COMMUNICATIONS TO THE BUREAUS ON THE STATUS OF
APPROPRL\TIONS ACTION, AS WELL AS ANSWERING OPERATIONAL QUESTIONS.
WE ALSO USED THIS TEAM TO ENSURE THAT DEPARTMENTAL OPERATIONS
WERE BACK TO NORMAL LEVELS AS SOON AS POSSIBLE AFTER THE TREASURY
DEPARTMENT'S SHUTDOWN WAS ENDED THE SECRETARY PERSONALLY HELD
A SECOND TOWN HALL MEETING WITH TREASURY EMPLOYEES TO WELCOME
THEM BACK AND TO SMOOTH THE TRANSITION BACK TO WORK.
IN GENERAL, THE SYSTEM THAT WAS PUT IN PLACp WORKED EXTREMELY
WELL AND FACILITATED RAPID AND COORDINATED COMMUNICATIONS WITH
TREASURY'S 154,000 EMPLOYEES - EASING, TO THE EXTENT POSSIBLE, THE
NEGATIVE EFFECT ON MORALE AND MINIMIZING THE NEGATIVE IMPACTS OF
THE SHUTDOWN ON PRODUCTIVITY.
51
MR. CHAIRMAN, YOU HAVE PROVIDED THE SECRETARY WITH A LIST OF
QUESTIONS TO BE ANSWERED, AND THE DEPARTMENT'S WRITTEN ANSWERS TO
THESE QUESnONS ADDRESS IN MORE DETAIL OUR MANAGEMENT OF THIS
PROCESS. WE WILL BE PROVIDING THESE ANSWERS FOR THE RECORD. WE HOPE
THAT YOU WILL FIND THEM COMPLETE. PLEASE HAVE YOUR STAFF GET BACK
TO ME IF YOU NEED ADDITIONAL INFORMATION.
THIS CONCLUDES MY REMARKS. I AM AVAILABLE TO ANSWER ANY
QUESTIONS YOU MAY HAVE.
52
"The Government Shutdown"
Hearing before the House Civil Service Subcommittee
December 6, 1995
9:00 A.M., Room 2154
Raybum House Office Building
Please describe your agency's process for developing and implementing^ its
shutdown plans.
Answen The Department began reviewing it's existing "Shutdown" guidance in June
of 1995, based on news media accounts that a budget impasse was looming on
October 1. The Department's previous shutdown guidance had been issued in 1991.
This earlier version was modified and, where applicable, expanded to provide the
Treasury bureaus with as much information as possible to aid in the development
and/or revision of their shutdown plans. The Assistant Secretary for Management and
CFO issued guidance to Treasury Bureaus on July 17, 1995, requesting that bureaus
update their plans and submit them to the Department in early August for review.
The Assistant Secretary for Management and CFO formed a Review Team to review
bureau shutdown plans as they were received, and to ensure that all the plans were
consistent with applicable legal principles, well thought out and clearly
communicated. Justifications for positions and functions "excepted" from a
shutdown, should a lapse in appropriations occur, were reviewed for consistency with
the Attorney General's (AG) 1981 and 1995 opinions. It also was important for the
bureaus' plans to address the differing impact of short-term and long-term shutdowns
and phasing for shutdowns of different lengths of time. All bureau plans were
required to have the following key plan elements:
► Preparation: identifies excepted and non-excepted functions;
*■ Implementation: actions to be taken to notify bureau employees of their status in
the event of a shutdown and actions to ensure an orderly shutdown of operations;
and
> Reactivation: actions to restart operations and notify employees to return to work
after funding is provided by Congress and approved by the President.
The Department held meetings on August 7, August 23 and August 30 that brought
together Departmental and bureau representatives to discuss shutdown planning,
including personnel-related matters. Bureau representatives (Shutdown «^oordinators)
were provided with the latest guidance issued by the Department and 0PM.
The Review Team and a subordinate review group, called the "Working Group,"
analyzed the bureau plans as they were received in August and September. The
Review Group notified the Assistant Secretary for Management and CFO of their
findings. Memoranda were transmitted to the bureaus requesting modifications, as
necessary, and/or notifying them of acceptance of their plans.
53
A "Hot-line" was established in September to provide current information concerning
FY 1996 appropriations and the possible shutdown of Treasury operations. In
addition, separate bureau "Hot-lines" were established to address employees' bureau-
specific questions.
The Treasury Department submitted preliminary bureau plans to 0MB in e^i,y
September. The bureau plans were reviewed continually and modified, as necessary,
during this time in order to be consistent with the AG opinions regarding shutdown of
agency operations and other Departmental concerns.
Once the shutdown was ordered by 0MB, the Department notified the respective
bureau "Shutdown Coordinators" and Bureau Heads to begin the implementation
phase of their plans. The bureaus began issuing furlough notices and ordered the
"non-excepted" employees to begin to shutdown their operations and go home once
that was completed. "Non-excepted" employees were also instructed to listen to news
broadcasts in order to learn when to return to work.
Please explain to the Subcommittee what guidance your agency received with
respect to its shutdown from the OfTice of Management and Budget (0MB), the
Office of Personnel Management (OPM), and/or other federal agencies.
Answer; 0MB and OPM provided the following:
0MB Guidance:
► August 16. 1995. The Department of Justice responded to a request from Alice
Rivlin (Director, Office of Management and Budget) for advice regarding the
permissible scope of government operations during a lapse in appropriations. On
August 22, 1995, 0MB requested that agencies: review their contingency plans in
light of this opinion; make any changes necessary to conform to the opinion; and
otherwise ensure that the plans were current. 0MB requested copies of the
updated plans for review.
► September 25. 1995. 0MB notified agencies that they had completed their review
of our shutdown plans. 0MB indicated that they would issue further guidance
about whether and when a shutdown would be required.
► November 9. 1995. 0MB provided guidance designed to help ageriv,ic» to plan for
shutdown activities prior to the November 14, 1995 shutdown.
► November 13. 1995. 0MB provided further guidance on a possible shutdown ~
requesting all employees to report for work on November 14 and wait for further
word from 0MB.
► November 14. 1995. 0MB informed agencies to implement the close-down of
affected operations promptly and in an orderly manner.
*■ November 16. 1995. 0MB provided guidance on the activities of political
54
appointees during periods of shutdown and examples of the impact of reduced
government services.
OPM Guidance:
► August 1. 1995. OPM provided updated guidance on furloughs including
questions and answers on various personnel management aspects of furloughs.
► September 6. 1995. OPM provided supplemental questions and answers
concerning furloughs.
*■ November 13 - 19. 1995. OPM provided information to furlough points of
contact on a variety of issues, such as filing for unemployment, processing
SF 50s, etc.
► November 21. 1995. OPM provided guidance on pay and leave treatment for
employees affected by the shutdown.
Please inform the Subcommittee of any guidance that you provided to the Office
of Management and Budget and/or other federal agencies with regard to the
management of agency Tmances, including appropriated and non-appropriated
funds from all sources, that could affect the ability of agencies to operate under a
lapse of appropriations.
Answen No guidance was provided to 0MB or other agencies regarding
management of finances during a shutdown.
However, the Financial Management Service's (FMS) Assistant Commissioner areas
notified their respective customers in writing of their intention to maintain an
"Excepted" or "Non-Excepted" status during the shutdown. The Regional Finance
Centers, which were open for business during the shutdown, sent out the following
notification to their customers:
CUSTOMER NOTIFICATION
In the event of a lapse of appropriations, the Financial Management Service Regional
Financial Centers will be in operation.
Agencies are responsible for ensuring funds availability for any funds \'t.^j vcrtify.
FMS also provides services other than disbursement of funds for other federal
agencies. Customers for those services were informed that the services would
continue to be provided to those agencies that had approved funding. As a final
attempt to ensure that all customers had been notified, an announcement was also
placed on the FMS Net.
55
Please inform the Subcommittee of the number of employees your agency
furloughed and the number who continued working beyond the lapse of
appropriations. Please describe the functions they perform, and explain your
rationale for continuing those functions. Did you alter your determinations at
any time after the shutdown began? If so, why?
Answer: Shutdown of operations beginning November 14, 1995:
Estimated On-Board
Nov. 14, 1995
Employees Furloughed on
Nov. 14th
Employees Remaining on
duty during the shutdown
154,000
113,400
40,600
Activities continuing after shutdown:
► Secret Service protection and law enforcement functions;
*■ Mint circulating and numismatic coin production;
► Customs Service: cargo inspections; commercial vehicle and passenger processing;
law enforcement operations; air and marine interdiction; Law Enforcement
Communications and data systems; and revenue collections;
*■ ATF: agents involved in criminal enforcement; collection of occupational and
excise taxes; and laboratories supporting the National Response teams;
► FMS: operations to continue payments of government obligations and claims; and
its government-wide accounting function;
► IRS: processing of tax returns which included remittances and hardship cases;
functions supporting the Social Security Administration; computer operations
necessary to prevent loss of data in process and revenue collections; complete and
test Tax Year 1995 Filing Season computer program; processing of cases with
expiring statutes of limitation, bankruptcy, liens, and seizure cases; criminal
investigation with undercover operations; and 1995 tax forms design and printing;
and
► minimal executive direction and duties necessary for an orderly shutdown of
operations.
The Department issued guidance, which was consistent with 0MB and Attorney
General (AG) guidelines, intended to assist bureaus in updating their plans because
the Anti-Deficiency Act, 31 U.S.C. 1341 & 1342, severely restricts the -^"'^uct of
business by agencies during a lapse of appropriations (e.g., making or authorizing
expenditures or obligations in excess of appropriations). The principal guidance
regarding the types of functions that may be continued during a lapse of
appropriations is the AG's opinion dated January 16, 1981, as updated by an August
16, 1995 AG opinion. The functions of the Treasury Department that continued after
the shutdown were consistent with the AG opinion. That opinion said that the
following activities can continue during a shutdown of operations:
56
*■ those activities that have a continuing source of funding;
► those activities that are authorized by law to continue even without funding;
► those activities that are authorized by necessary implication of, e.g., the need to
support, activities that continue under another authority, such as the FMS's
disbursement of benefit payments for the Social Security program, which has continuing
funding; / ,
*■ those activities covered by limited authority to employ (although not pay for) personal
services for activities to the extent necessary to avoid imminent "emergencies involving
the safety of human life or the protection of property;"
»■ those activities that are necessary to discharge of the President's constitutional duties;
and
► functions necessary for a short period in order to ensure an orderly shutdown of
operations.
The bureaus, with Departmental encouragement, continually fine-tuned their plans before
the shutdown, consistent with the AG exceptions identified above. After the shutdown
occurred, some minor adjustments were made, primarily for Departmental Offices (DO),
that were also consistent with the AG opinion. In all cases, these adjustments were
authorized only after Departmental Review Group approval as to consistency with the AG's
guidelines.
5. What steps have you taken to ensure that your agency adhered to all applicable
standards and guidelines in implementing the shutdown? What steps has 0MB taken
to oversee your agency's implementation of the shutdown?
Answer; 0MB provided guidance as specified above (question #2) and made
recommendations related to our shutdown plans. The Department of the Treasury was
responsible for ensuring that the bureau plans adhered to guidance.
*■ The Department issued guidance, in conjunction with 0MB and Attorney General (AG)
guidelines, intended to assist bureaus in updating their plans.
► Where applicable, all bureaus had contingency plans in place and identified "points of
contact." The Assistant Secretary for Management and CFO issued guidance to
Treasury bureaus on July 17, 1995, requesting that their plans be updated and submitted
to the Department for review.
» Comprehensive Q&As were developed and passed out to all bureau points of contact.
*■ A "Hot Line" was established (1-800-566-6437 and locally 202-622-9191).
► The Assistant Secretary for Management and CFO formed a Review Team to review
bureau plans to ensure that all the plans were consistent with applicable legal principles,
57
well thought out and clearly communicated. All bureau plans were required to have the
following key plan elements:
— Preparation: identification of excepted and non-excepted functions;
~ Implementation: actions to be taken to ensure an orderly shutdown of operations;
and
~ Reactivation: actions to restart operations after funding is provided/
The principal guidance regarding the types of functions that may be continued during a
lapse of appropriations is the Attorney General's opinion dated January 16, 1981, as
updated by an AG opinion dated August 16, 1995. Treasury's "excepted" activities
were justified based on one or more of the following basis:
1. continuing source of funding, such as assessments collected by OTS, OCC;
2. authorized by law to continue even without funding;
3. authorized by necessary implication of, e.g., the need to support, activities that
continue under another authority, such as the FMS's disbursement of benefit
payments for the Social Security program, which has continuing funding;
4. limited authority to employ personal services for activities to the extent necessary to
avoid imminent "emergencies involving the safety of human life or the protection of
property;"
5. necessary in order to discharge the President's constitutional duties;
6. necessary for a short period in order to ensure an orderly shutdown of operations.
"Excepted" activities were based on actual workload requirements. Plans recognized
that as time passed, performance of activities that were "excepted" initially might no
longer be required. Plans similarly recognized that activities initially shut down could
become "excepted" because of changed circumstances. In either case, only staff
necessary to perform activities that were at the time "excepted" were to report to duty.
The Department required thorough documentation on all "excepted" functions.
Customers/vendors were made aware of the potential lapse, how it could affect
Treasury business operations and the steps the bureaus would take to ameliorate effects
on customers and vendors;
Shutdown plaiming is a dynamic process. Plans might have to be t'.- ""fl as events
unfold, especially as more details on a potential shutdown and its duration are revealed.
Bureaus were required to get approval from the Department for a change in their plans.
58
What, if any, guidance did your agency provide to subordinate agencies or furloughed
employees with respect to such personnel issues as pay, continuation of benefits, and
unemployment compensation? How was it provided? Have you received guidance
from OPM on sudi issues? Please provide copies of all guidance or policy directives
your agency issues with respect to the shutdown?
Answer; In addition to the initial Departmental guidance for developing bureau shutdown
plans that was issued on July 17, the Department provided the bureaus with the 1995 AG
opinion and OPM's updated Questions and Answers concerning personnel-related matters in
the event of a shutdown. This guidance was provided in hardcopy format.
The Department's August 23 and August 30 meetings were with the bureau personnel and
labor relations offices. Those meetings discussed shutdown issues that included pay,
benefits, unemployment compensation and other personnel issues.
In addition, the Department responded orally on many occasions, as a result of bureau
questions or "Hot-line" phone calls. During the actual shutdown, twice-daily conference
calls were held with the bureau Shutdown Coordinators, the Assistant Secretary for
Management and CFO, and the Review Group. Everyone was provided with current
information relating to the shutdown of operations, including personnel related issues.
Please provide the Subcommittee with copies of correspondence, memoranda,
guidance, directives, instructions, news releases or comparable correspondence
intended to convey to employees information about administration or agency policies
related to the shutdown. Please provide copies of any comparable documents
communicated to your agency's customers, whether individuals or organizations.
Answer; The Department has collected and organized all shutdown related items. We are
providing the Subcommittee with this information.
Please provide a description of your agency's functions and activities that were
continued during this interruption of routine operations. Please indicate any special
funding mechanisms (e.g., carry forward, trust funds, fee accounts, reimbursable
agreements) used to support these continuing activities.
Answen Treasury Department activities continuing after the shutdown were consistent
with the AG opinion on activities that can continue during a shutdown .' operations:
► Secret Service protection and law enforcement functions;
► Mint circulating and numismatic coin production;
► Customs Service: cargo inspections; commercial vehicle and passenger processing; law
enforcement operations; air and marine interdiction; Law Enforcement Communications
and data systems; and revenue collections;
► ATF: agents involved in criminal enforcement; collection of occupational and excise
59
g
taxes; and laboratories supporting the National Response teams;
►• FMS: operations to continue payments of government obligations and claims; and its
government-wide accounting function;
► IRS: processing of tax returns which include remittances and hardship cases; functions
supporting the Social Security Administration; computer operations necessary to prevent
loss of data in process and revenue collections; complete and test Tax Year 1995 Filing
Season computer program; processing of cases with expiring statutes of limitation,
bankruptcy, liens, and seizure cases; criminal investigation with undercover operations;
and 1995 tax forms design and printing; and
► minimal executive direction and duties necessary for an orderly shutdown of operations.
Several bureaus had exemptions from shutdown that were authorized by funding sources
other than annual appropriations:
► OCC and OTS operate with fee assessments;
► BEP operates with reimbursements primarily from the Federal Reserve and the Postal
Service;
► Mint numismatic operations operate in a revolving fund;
► Treasury Forfeiture Fund had carry-over funds;
► FLETC had supplemental FY 1995 funding remaining available in FY 1996 that was
used to continue training operations, as demand warranted; and
► BPD was able to exercise authority contained in 31 U.S.C. 3129, which creates an
indefmite appropriation based on a percentage of debt issued to continue operations.
9. Please estimate the total costs to your agency associated with the interruption of
operations between November 14 and November 20, 1995. Please provide descriptions
of any unusual costs imposed on the agency or other unanticipated consequences of
this interruption of operations. Please provide, too, an estimate of any savings
associated with this interruption of activities.
Answen
SUMMARY COST OF SHUTDOWN
The following sample information identifies the estimated costs as a result of partially
shutting down some of Treasury's operations. The cost impact is still being evaluated.
LOST REVENUE - Preliminary estimate $400 million.
► We are still evaluating the estimate and methodology for the potential loss in revenues
during the four day furlough period.
60
COSTS OF DEVELOPING CONTINGENCY SHUTDOWN PLANS AND
DESIGNATING AND NOTIFYING EMPLOYEES -- Estimated at $404,000.
(Includes the extraordinary costs associated with planning for and implementing the
shutdown, such as: shutdown-related planning meetings and briefings; costs of shutdown
plan development; review and approval; providing information and guidange to employees
related to shutdown; and any operational costs which would not have occurred but for
shutdown).
Estimated Costs:
► Printing -- iiSJflQ
- Furlough Notices (Approximately 114,0(X) notices had to be printed or copied.
114,000 @ 5C = $5,700).
- Unemployment Forms (Approximately 114,000 @ 5C = $5,700).
-- Recall Letters (Approximately 114,000 @ 5C = $5,700).
-- Other (guidance, Q&As, etc.) = $1,000
*■ Postage - $3.648
~ Furlough Notices (Approximately 114,000 notices of which 5% were mailed. 5,700
@ 32C = $1,824).
~ Unemployment Forms (N/A).
-- Recall Letters (Approximately 5,700 @ 32C = $1,824).
► Staff Time -$375.000
~ Approximately 130 employees (conservative estimate) spent a full 10 staff days
related to shutdown planning and implementation. (Estimate average salary and
benefits of $75,000/260 = $288 (daily rate) x 10 days = $2,884 x 130 employees
= $375,000).
*■ Treasury "Hot-line" - $7.000
LOSS OF DISCOUNTS/PAYMENT PENALTIES - TBD
CONTRACTUAL DELAYS
► Vendor and employee payments were delayed. This resulted in cubiomer demands for
payments, and strained our relationship with customer/vendors.
~ Vendors submitting bills for services provided were not compensated promptly.
Early indications are that there may be some penalties resutling from the delayed
processing of payments.
61
10
EMPLOYEE ISSUES
► Employee morale may affect Treasury's support to CFC. Treasury has historically
been a major supporter of charitable organizations through the Government's Combined
Federal Campaign.
► The shutdown will result in significant loss of productivity through: disruption in the
flow of work; downtime due to planning, notification, and execution of the shutdown
plan; low morale which in turn may result in increased attrition, more employee
litigation; and possible recruitment and retention losses.
►• The shutdown further exacerbated morale problems created by budget uncertainties.
CUSTOMERS NOT RECEIVING SERVICES OR A DELAY IN SERVICES
► Phones unanswered ~ IRS staff was not available to resolve tax issues.
- Taxpayers who needed answers to key tax questions to pay their taxes found phones
unanswered.
~ Requests for tax forms and accounts assistance had to be deferred until after the
shutdown, increasing taxpayer frustration.
SALARY AND BENEFITS FOR THOSE EMPLOYEES FURLOUGHED FOR
SCHEDULED WORK HOURS AND NOT WORKED.
► We currently estimate approximately $80 million for salaries and benefits of furloughed
employees. This again is under evaluation, and will be revised later.
PROGRAMMATIC EFFECTS
► Slippage in initiating, conducting and/or finalizing audits, investigations and program
quality reviews critical to the effective management of Treasury programs and to the
prevention of fraud, waste and abuse within the Department.
► Loss of public confidence in our agency.
► Undermining of fair and equal treatment of all taxpayers
— The impact of the furloughs in the enforcement programs ~ processing tax
remittances is considered an "excepted" activity — is unfair to the vast majority of
taxpayers who fully comply with the tax laws.
An.ion Q-i
62
11
► Major delays in processing throughout Treasury.
~ Processing of applications (such as, permits, labels, licenses) for alcohol, tobacco,
firearms, explosives, customs brokers, and vendor petitions.
- IRS did not process tax returns that did not include payments of tjixes owed.
— IRS did not pursue investigative activities unless they were active, multi-agency,
grand jury investigations or preparation for actual trial proceedings ~ this could
seriously weaken the Government's case and result in fiirther losses in revenues.
► TBD (Bureau reports on other impacts).
10. No previous shutdown lasted more than 3 days. Did your agency make any
assumptions about the length of the shutdown? If so, what was the time frame
assumed, and how did it affect the agency's decisions with respect to the functions and
positions it has continued after the lapse of appropriations?
Answer; Even though news media reports were pessimistic about the length of a
government shutdown, the Department's July 17 guidance assumed no particular length of
time for a shutdown. The Department prepared for the full range of possible shutdown
periods. As the plans were being reviewed and fine tuned in August and September, it
became evident that some bureau operations/functions could be successfully shutdown for a
few days without serious impact. However, if a shutdown progressed for over a week or
10 days, some operations would need to be reactivated, and some employees would have to
be recalled to work.
The bureaus were notified that the shutdown plans were flexible documents, and that fine
tuning their plans to fit the particular circumstances and length of the shutdown was
normal. The Department emphasized the importance of phased plans that addressed both
short-term and long-term shutdowns. Some bureaus, particularly IRS, did revise their
plans to consider operations if a shutdown lasted longer than a week.
For example, IRS indicated that a long-term shutdown, if it began on October 1 and
continued through November, would be detrimental to the 1995 Tax Filing Season.
Employees in critical functions necessary to design and develop tax forms would have to be
recalled in mid-November in order to meet publication and distribution ueaaimes for the
upcoming Tax Filing Season.
Other bureaus indicated that it might be necessary to recall employees that maintained and
protected government property or performed some law enforcement functions if there was a
long shutdown of operations.
63
12
11. How would your determination with respect to what functions or positions to continue
change if the interruption were to last:
a. 10 days?
b. 30 days?
c. 90 days?
Answer; "Excepted" activities were to be based on actual workload requirements. As
time passed, performance of some activities that were "excepted" initially were no longer
required. Similarly, planned activities that initially were "non-excepted" could become
"excepted" because of changed circumstances. In either case, only staff necessary to
perform activities that currently were "excepted" were allowed to report to duty. Each
bureau monitored its requirements and made changes as necessary to bring employees back
to work. Justifications for those changes were to be sent to the Department for review and
approval.
12. Please provide the Subcommittee with a description of the differences in your agency
plans, if any, that would ensue if the interruption of operations resulted from
restrictions resulting from the debt ceiling rather than a lapse in appropriations.
Answer: If an agency has funding under an appropriation/CR, but Treasury doesn't have
cash due to the debt ceiling, all employees come to work. In that situation, we can incur
obligations for salaries, we just can't pay them.
13. Identify all of your revolving funds.
a) How many full time and part time employees work at each one? b) How much
money is involved in the revolving funds? c) How many employees were furloughed?
Answen The Department of the Treasury has many revolving, special fund and general
fund (with user fees) accounts. See Attachment 1 for details related to funding and
employees.
14. Identify all of the fee accounts, at least the ten largest.
a) How many full time and part time employees work at each one?
b) How much money is involved in the fee funds?
c) How many employees were furloughed?
Answen See Attachment 1.
64
13
15. Identify the total Dumber of public affairs employees and how many were furloughed.
a) How many public affairs employees were furloughed from the Bureau of Alcohol
and Fu%arms?
Answer; Approximately 86 percent of all of the Treasury Department's public affairs
staffing was furloughed. There are seven ATF public affairs positions, of which six were
furloughed. See the chart on the next page.
PUBLIC AFFAIRS STAFFING
Diang Furlough Ptcnd
FiKHYaar IBM
Pi^iiu/r»r«»y7j»lnn Mm.
Dipir1mert»IOnic»«
Treasuv Fort8li/9 Fund
Oftct rfhsoictor Oaia^l
Federal Law Erriorcemert Trahing Cerlei
Financial Managemen Sarvict
Alcohol, Tobacco 4 Fireenns
US. Cusioms S«t»IC8
Financial Cnmes Erforeonent Network
United Sl^tsMrl
Buieauofine PiDIc Debt ,
Bureau of Engrmrg and Phrtng....
Wernai Revenu* Service —
US Secret Semce. .
Ccmplrctler of thaCunarcy
once of ThtR SuDervisian
NUMBER OF EMPLOYEES 1
Tntai
Fivlounhad I
isj:-
11
0
0
0
1
6
^9■■.
18
4
2
0
M-:
0
300 ■:
:9e
U:-
0
6;-
0
b:-.
0
398'
341
TOTAL. PUBLIC AFFAIRS..
Kkimbert are anaroitnnata Treasury bureaut/organiiations do not nacessarty have separate
Pubic Airalrs ofllces Vne PtHlc AfTars nine lion is olten comtineo wtr LegEBlkiafCcniresS'
iotallUeila andconcspondencefunctDns
16. Do you have any special appropriations associated with any of your programs?
Answer. Yes. The Bureau of the Public Debt has an indefinite appropriation
( 31 U.S.C. section 3129) that enables the Bureau to continue to perfoim us borrowing
responsibilities when there is a lapse in appropriations.
65
DEPARTMENT OF THE TREASURY
Traatury Ravolving, UMr Fm, Spaclal Fund Accounu
EMPLOYMBJT STATUS
ACCOUWT
Traasury Forfulur* Fund
Pratidantial S^aCbon Campaign Fund
imtmaJ Ravanuc CoHaclioni from Puatto Rco
BoRttr Sarvica* Uaar Faa
Custom* SarvKaa at Smal Airports
Conaga Profit Fund
Rannb. to Stata 1 Local Law Enf Agsricias
TOTAL. Spacial Fund*
PuMIc Entarprtsa RavcMno Funds
Offica of Thtrfl Suparviaion
PEF. Fadsral Tax Lian Rsvotving Fund
Exchanga Stabilization Fund
TOTAL, PubHc EnL RavoMng Funds.
mtafnovammantal RavoMna Fund*
Wortong Capital Fund
Fad. Fnancng Bank
Buraau of Engravng and Printing
Numomatic Pubkc Entarpnsa Fund
ToUL Intargovammantal Ravolv. Fnd_
TOTAL, SpadaL Ravolving Funds-
M97
5M1
5737
5274
SCM
S<11
50M
41M
4413
4501
4S21
4S02
4504
Trvti Rtvptvlng Fwrtt
Complrotor of tha CuiTancy
TotaL Trust Ravolving Funds-
CanaralFund*
U.S. Customs Sarviea, StE
Intamal Ravanua Sanica (AAM)
Total, Ganaral Funds
Spacial Fund
Spacial Fund
0602
0912
Misc. ParmananI Approp. Trust Fund
Spaaal Fund 9922
Est Amount
tooo
Numbar of
! EmoloyMS On-t>oard
Numbar of
Furloughcd Employaa
FYM
FllH-Ttmt Pifl-Tlrw
FullTlma Part-Tlma
S22S.00O
70.000
232.447
100,000
1.406
0
0
19
0
0
0
30
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
S62<.8S3
49
0
0
0
1 50.800
3.036
2.640!000
1.476
0
0
5
0
0
0
0
0
0
0
0
S2,79343<
1.476
5
0
0
17Z060
8.574.259
515.000
375.932
233
0
2.951
1.176
0
0
72
0
215
0
0
0
0
0
0
0
S9.S37.251
4.380
72
215
0
«13.0S9.»40
5485
77
215
0
393.250
3.503
129
0
0
$393,250
3,503
129
0
0
672.946
119.000
974
0
0
0
0
0
i
oi
"1
$791 ,946 1
974
0
0
0
188,112
1
365
0
0
0:
TOTAL, 0«partin*nt of th« Traasury $14,433,248 I
10,727
206T"
66
Mr. Mica. I thank you.
I will recognize Eugene A. Brickhouse, Assistant Secretary for
Human Resources and Administration, in the Department of Veter-
ans Affairs.
Mr. Brickhouse. Good morning, Mr. Chairman and members of
the subcommittee.
I appreciate the subcommittee's interest in how executive branch
agencies planned for and implemented the recent government shut-
down, and I will be pleased to share with you our experiences in
the Department of Veterans Affairs. With your permission, I will
provide a brief summary of my written statement, and then I will
be glad to respond to any questions.
VA started planning for a potential lapse of appropriations in
early August. We had the benefit of previous guidance from 0MB
and from the Justice Department. Also, 0PM issued extensive
questions and answers regarding furloughs which were very help-
ful. Current 0MB and Justice Department guidelines were received
well before the end of the month and provided further assistance
to us in our planning efforts.
As you are aware, the VA is a large department with multiple
missions, including health care for veterans, delivery of compensa-
tion, education and other benefits, and operation of the National
Cemetery System. Because of this diversity, we asked each of our
operating components to develop shutdown plans appropriate to
their individual programs. These were independently reviewed by
our general counsel to ensure that legal requirements were met
and were then incorporated in our VA-level plan.
The plan was ready for implementation when needed on Novem-
ber 14 and was put into effect by operating VA managers and su-
pervisors. The plan called for continuation of direct medical care to
veterans as well as other activities which are in the excepted cat-
egory. This included police and security services, benefit determina-
tions for excepted functions, receipt and processing of pajonents,
management of government property, and interments in our na-
tional cemeteries.
VA had some activities which were not dependent on appro-
priated funds, and these were allowed to continue. These included
operation of the Veterans Canteen Service, certain medical re-
search activities, operation of the VA supply system, and the medi-
cal care cost recovery system for third-party insurers.
At the close of the shutdown period, approximately 206,000 em-
ployees had been designated as excepted, and another 33,000 were
in furlough status. Clearly, the impact of the shutdown was felt by
the veterans and family members whose calls went unanswered,
whose appointments were canceled, whose claims for benefits were
delayed. And although direct patient care continued, our medical
facilities felt the strain of suppliers and contractors who were re-
luctant to proceed with orders when there was no funding to back
them up.
I think all of us hope earnestly that another shutdown will not
be necessary. With regard to VA's plan, we believe that it met the
requirements of the law while malang use of every possible oppor-
tunity to continue service to veterans. I would like to close with a
word of praise for VA managers, supervisors, and employees. They
67
implemented the shutdown, unwelcome as it was, in an orderly, re-
sponsible fashion, and we can be proud of them.
Thank you, Mr. Chairman and members of the subcommittee. I
would be glad to answer any questions.
[The prepared statement of Mr. Brickhouse follows:]
68
statement of Eugene A. Brickhouse
Assistant Secretary for Human Resources and Administration
Department of Veterans Affairs
Before the Committee on Government , Reform and Oversight
Subcommittee on Civil Service
December 6, 1995
Mr. Chairman and Members of the Subcommittee:
I am pleased to appear before the Subcommittee today to
provide VA testimony relating to the recent Government
shutdown. The following will detail, point -by-point, the
concerns expressed in Chairman Mica's letter inviting VA to
appear here.
Process for developing and implementing shutdown plans
The Department of Veterans Affairs (VA) initiated
formal shutdown planning in August 1995, in anticipation of
a potential lapse in appropriations on September 30. VA is
a large, complex, and geographically dispersed organization
with multiple missions and responsibilities. Our approach
in shutdown planning was to develop an overall plan for the
Department based on input from VA's three major line
organizations (Veterans Health Administration, Veterans
Benefits Administration and National Cemetery System) as
well as headquarters staff offices. Advisory and
coordination services were available from my office (Human
Resources and Administration) , and we also assembled teams
69
of human resources specialists to assist Central Office and
field activities with their planning efforts.
Organizations within VA were asked to review their
operations and identify the nximber of employees who should
be excepted from furlough, based on long-standing criteria
related to protection of life and property (0MB guidance
issued in 1980, 1981, 1990) , as well as those who would be
needed for the orderly shutdown of non-excepted activities.
Plans, at a minimum, were to contain:
• Excepted activities and number of employees necessary to
carry out those activities;
• Description of activities shutdown employees would
perform, length of time needed, and number of employees
necessary to carry out those activities;
• Procedures to notify customers of suspension/reduction of
activities; and
• Procedures to notify employees of their status relative
to excepted or non-excepted activities.
Current guidance from the Office of Management and
Budget (0MB) and the Department of Justice (DOJ) was made
70
available to VA planning officials on August 22, 1995, and
assisted them in developing their plems and making the
necessary determinations regarding excepted and non-excepted
activities.
Individual office plans were reviewed by VA's Office of
General Covmsel in order to ensure legal compliance with
guidelines from the Department of Justice on excepted
activities. VA's Human Resources Management office then
developed a consolidated Departmental plan, which was
submitted to 0MB (Attachment A) .
As an integral part of our planning process, employee
unions were kept informed through communication with the VA
National Partnership Council. This consists of
representatives of VA's five unions with national bargaining
rights, as well as key management officials from line and
staff organizations. In addition, Memoranda of
Understanding (Attachment B) were signed with two of the
largest of VA's unions, the American Federation of
Government Employees (AFGE) and the National Federation of
Federal Employees (NFFE) ; these were shared with local
facilities having applicable bargaining units.
Although the lapse in appropriations did not occur on
September 30, 1995, the Departmental plan was complete and
ready for implementation when needed on November 13, 1995.
71
Guidance VA received with respect to its shutdown from 0MB,
the Office of Personnel Management (OFM) , and/or other
federal agencies
Initial planning was developed in accordance with OMB
Memorandum M-95-18 and accompanying guidance from the
Department of Justice. As the situation developed, OMB
continued to provide guidance on a range of policy and
operational matters (e.g., whether employees should report
to work on November 13 and 14, and when shutdown operations
should actually commence) through Memoranda M-96-01 and M-
96-02. (Copies provided at Attachment C)
OPM was very responsive in providing assistance and
guidance regarding the full range of personnel issues
involved in the furlough. In addition, the Interagency
Advisory Group (lAG) , which is a consortium of agency
directors of personnel, met regularly with OPM, OMB and
Department of Labor (DOL) representatives. The lAG provided
a very helpful forum for discussion of furlough issues and
dissemination of information and guidance throughout the
Federal human resources management community. In addition
to these resources, guidance on unemployment compensation
matters was provided by DOL.
72
Number of VA employees furlougtaed, number who continued
working beyond the lapse of appropriations, and VA services
and functions performed during shutdown
The data below provides the number of employees
estimated in VA's original plan compared with revised
estimates as of November 17, 1995.
PLAN ESTIMATE REVISED ESTIMATE
EXCEPTED FURLOUGHED EXCEPTED FURLOUGHED
200,392 36,354 205,668* 33,411
*This number includes 1,700 employees in the Veterans
Benefits Administration who would have been recalled on
November 20 if the furlough had continued to help with
receiving and dating benefits claims.
With regard to services which were continued during the
shutdown, the vast majority of employees who were determined
to be performing excepted activities serve in the Veterans
Health Administration and are involved in providing or
supporting medical services to veterans. Police and
security services were also continued in order to ensure the
safety of veterans, their families and employees while in a
VA health care facility, and to protect government property,
buildings and grounds.
The Veterans Benefits Administration originally
identified 442 employees nationwide as performing excepted
73
activities. These included determination of eligibility for
benefits associated with other excepted VA activities (e.g.,
medical care and burial claims) , receipt and processing of
payments, management of government property, and maintenance
of automated records systems. At the time the furlough
ended, an additional 1,700 employees were being recalled to
receive and date benefits claims, assist applicants in
filing claims and respond to inquiries about VA benefits.
We determined that the potential for adverse effects of
delays in receipt of applications qualified for an exception
under the Antidef iciency Act.
In the National Cemetery System, 438 employees were
identified to continue interments and necessary management
direction in the national cemeteries, since denial of burial
would result in health hazards to employees or others, not
to mention the resulting financial hardship and mental
anguish to family members. Processing of applications for
veterans gravemarkers and routine maintenance at national
cemeteries were not considered excepted and employees
associated with those activities were furloughed.
Other excepted activities included arrangements for
delivery for medical supplies and other essential goods to
facilities where excepted activities were taking place;
operation of automated systems needed in support of excepted
or appropriate payroll functions; legal representation for
74
the Department at scheduled court appearances; and
management direction and technical support to excepted
activities in the field. Certain functions in the
Department were not affected by the furlough because they
are funded through revolving funds, or other mechanisms not
dependent on current year appropriations. These are
accounted for in the Department's shutdown plan and are
discussed further below under the heading "Functions and
activities that were continued."
Compliance with shutdown guidance
As previously mentioned, input to the Department's plan
was reviewed by the Office of General Counsel to ensure
legal compliance with applicable guidelines. This plan
provided the framework for shutdown of operations on
November 14, 1995, with management of the process overseen
by the established chain of command within each
organization. Immediately after the shutdown ended, 0MB
requested information from agencies regarding costs and
services to the public which had been impacted. This
information was developed in VA based on input from the
respective program offices and was forwarded to 0MB as
requested (Attachment D) . Close coordination with employee
unions through VA's National Partnership Council also
provided independent perspective for monitoring the
integrity with which the plan was implemented.
75
Guidance on personnel issues
Information about continuation of benefits, pay,
unemployment compensation and other personnel matters was
provided to the designated human resources management
liaison in the headquarters office of each Under Secretary,
Assistant Secretary, and comparable official. They in turn
distributed information to their employees through hard-copy
handouts, fax messages, e-mail, and other electronic
information systems as appropriate to their own
organizations. Information was also communicated directly
to human resources management officials at VA field
facilities through regularly scheduled conference calls,
during which there were opportunities to ask questions or
request additional information or clarification on policies
or procedures. Copies of agency guidance or policy
directives issued are attached (Attachment E) .
As previously mentioned, the Office of Personnel
Management provided timely and responsive guidance and
information throughout the planning period. 0PM guidance
was included in the information distributed through the
human resources management liaisons.
76
Communications on shutdown
Copies of VA employee broadcast messages, media talking
points, and similar items are attached (Attachment F) . As
indicated previously, additional information was
disseminated to employees through human resources management
liaisons in the various administrations and staff offices.
Functions and activities that were continued
Information on activities that were excepted based on
DOJ guidelines regarding protection of life and property are
described above and in the VA shutdown plan. Also described
in the plan are activities which continued because funding
was not tied to annual appropriations. These include the
following:
• The Veterans Canteen Service operates through a revolving
fund which permits it to operate to the extent that funds
are available. It provides food, retail and other
services for the benefit of VA medical center patients
and employees.
• Prosthetic and medical research activities funded by
grants from outside sources, funded under a multi-year
appropriation which was still current, or which were at
critical stages and could not be shutdown without
77
endangering the lives of participating patients, were
continued.
• Acquisition and Materiel Management activities are funded
through the Supply Fund, a revolving fund, as are
activities of the Office of Small and Disadvantaged
Business Utilization, and were continued.
• Medical Care Cost Recovery activities provide income to
the government through recovery of third party insurance
collections, and are funded through a revolving fund.
These activities were continued.
Costs or savings associated with the shutdown
We estimate that the cost of shutting down VA during
the period of the lapse in appropriation was approximately
$27 million, the majority of which is payroll.
Assumptions on length of shutdown for planning purposes
VA based its plans on a relatively brief shutdown of
one day or a very few days, which resulted in a shutdown of
the majority of administrative support functions in
headquarters and elsewhere. It was recognized that if the
furlough were to extend beyond that period, additional
78
personnel would need to be called back at least for limited
periods. Additional information is provided under the
heading "Impact on functions and positions in VA if furlough
would continue" below.
Impact on functions and positions in VA if furlough would
continue
Attachment D contains information VA provided to 0MB
regarding the impact of a continuing lapse of appropriations
on agency operations. Although specific planning data is
not available regarding longer term shutdown scenarios, some
adjustments would be indicated to alleviate the more severe
operational consequences. This would need to be considered
in the context of legal requirements and any further
guidance or interpretations from 0MB or the Attorney
General's office. Also, plans would need to be adjusted to
provide for activities such as compliance with
administrative and personnel requirements should furloughs
last beyond 30 days.
79
VA's plan in the event of debt ceiling restriction
VA did not develop a separate plan for the debt ceiling
restrictions.
This concludes my statement, Mr. Chairman. I will be
pleased to answer any questions you or members of the
Subcommittee may have.
80
Attachnent A
Department of Vetereuis Affairs Shutdown Plem
September 1995
81
DEPARTMENT OF VETERANS AFFAIRS
OEPtnV ASSISTANT SECRETARY FOR BUOGET
Washington DC 2O420
SEP 15 1995
Ms. Toni S. Hustead
Chief, Veterans Affairs Branch
Office of Management and Budget
Executive Office of the President
Washington, DC 20503
Dear Ms. Hustead:
This wiD follow up on the Secretary's letter to Ms. Rivlin of September 5, 1995,
forwarding the Department's shutdown plan in the event of a lapse in {^propriation.
As VA organizational co^:^>onents continue to refine their contingency plans, some
adjustments of the data provided earlier are in order. An updated copy of the plan is
enclosed. An annotated copy of the previous plan and the Secretary's September 5
transmittal letter are also provided, so that your staff can easily pinpoint the numbers
which have changed
The revised figures are based on further consideration of operational requirements
at health care facilities under shutdown guidance and a determination that fewer staff
would be continued at veterans benefits facilities. As you can see, this results in a slight
increase in the total number of employees who would be furloughed immediately, and a
decrease in those who would be retained to perform excepted activities.
We will continue to keep you informed should funher developments result in any
significant changes to our planning scenario. Questions may be referred to Ron Cowles,
Deputy Assistant Secretary for Human Resources Management, at 273-4920 (executive
level contact) and Jim Kirk, Title 5 Staffing Division, at 565-8836 (staff level contact).
Sincerely yours,
■ Shirley C. Caiozza yj)
Enclosure
82
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83
Plans for Implementing a Shutdown
Department of Veterans Aflairs
Veterans Health Administration
Impact of Absence of Appropriations
The Veterans Health AdministrBtion will discontinue all nonexcepted activities in its
headquarters offices, medical centers, outpatient dimes, and other health care support
facilities. Employees will be notified of thdr status and those who peifonn nonexcqjted
activities will be given finlough notices on September 29 or 30, I99S, and be wimsed to
listen to news broadcasts during the wedoead to team if the budget situatioa has dunged.
Excq)ted activities to provide health care; rcseardi, and protection of life and propeity
will'be fiilly maintained.
Medical Care
No veteran will have his or her care ddayed, deferred, canceled, or othenwse adversdy
impacted as a result of shutdown activities. In the field, excepted activities have been
identified to indude all direct patient care activades and those support activides necessary
to assist direct patient care provideis and maintain service to patients. All excepted
activities will be fiiUy maintained during any furiou^ period. All employees engaged in
nonexcepted activities will be furioughed.
Canteen Service
The VA Canteen Service operates on non-appropriated funds, therefore, all VCS activities
will be fiiUy maintained during ai^ finiough period to support employees engaged in
excepted activities.
Protection of Life and Property
Police and Security services will be provided in order to ensure the safety of veterans and
their families and employees while in a VA facility. Continuation of these services is also
necessary to protect and secure government property, buildings, and grounds. These
services will be fiiUy maintained during any furlough period.
84
Prosthetic and Medical Research
Many research projects in VA are funded by grants from outside sources, therefore, they
will be fully maintained during any furlough period. Additionally, a number of projects are
at critical stages where their shutdown could endanger the lives of patients who are
participating in them as test subjects. These activities will be fiilly maintained during any
fliriough period. All employees not identified with these excepted activities or not
otherwise funded will be fiirioughed.
VHA Headquarters Staff
Medical Administration and Miscellaneous Operating Expenses is a personnel intensive
activity. Twenty-five employees have been identified to perform excepted activities such
as manage VHA's overall operations, organ transplantation issues, operational and policy
issues for VA medical centers, allocation of resources to excepted acti>nties, and oversee
construction contractual obligations. These activities wall be fiiUy maintained during any
furiough period. An additional 770 employees not identified vnth these limited excepted
activities will be fiirioughed.
Staffing Requirements
Employees performing excepted activities
Central Office 25
Field Facilities 199,012
Employees performing shutdown activities, then fiirioughed
Central office 10
Field Facilities Not applicable
Employees to be fiirioughed immediately
Central office 760
Field Facilities 18.443
Updated 9/15/95
85
Plans for Implementing a Shutdown
Department of Veterans Aflairs
Veterans Benefits Administration
Impact of Absence of Appropriations
The Veterans Benefits Administration will discontinue all nonexcepted activities in its
headquarters offices. Area Offices, Benefits Centers, and R^onal Offices. Employees
who perform nonexcepted activities will be ^en notices of their status on September 29,
1995, and be advised to listen to news broadcasts to learn if there is a change in the
fiinding situation. Employees performing excq)ted services will be available to serve
veterans and their families.
VBA has identified 442 employees nationvnde as performing excqited activities. The
employees in Central Office will oversee management of VBA excepted operations. The
excepted employees at field fitdlities will determine digibility for benefits associated with
other excepted VA activities (claims for burial, temunal illness, medical care), recdve and
process payments, manage issues invol^ong government property, and maintain VBA's
automated records systems. These acti\nties will be fiilly maintained during any fiirlough.
period.
Staffing Requirements
Employees performing excepted activities
Central Office 13
Field Facilities 366
Employees performing shutdown activities, then fiirloughed
Central office Not applicable
Field Facilities Not applicable
Employees to be furloughed immediately
Central office 483
Field Facilities 12.529
Updated 9/15/95
86
Plans for Implementing a Shutdown
Department of Veterans Affairs
National Cemeteiy System
Impact of Absence of Appropriations
The National Conetety System tvill discoothme all Donexcq)ted activities in the absence of
appropriations. Employees will be notified of their status on September 29 or 30, 199S,
and be advised to listen to news broadcasts to leant if th^ are to return to work on
October 2, 1995.
Veterans and their &milies have placed rdiance on the National Cemeteiy System to
provide gravestes at their time of need. Denial ofbtnial to these a^Iicants would impose
financial hardslap, and in many cases, mental aqgiash. Ddsyofinteraient may also result
m health hazards for employees or others. Thetelbrc; the National Cemeteiy System will
continue to buiy di^le veterans during the period covered by the absence of
appropriations. Central Office employees perfomm^ excqited activities vnll provide
management direction and control, and operational support to the fidd. Employees in the
fidd peifoiming excqited activities determine dipbtSty for burial, supemse interment
operations, and provide for property protection.
Staffing Requirements
Employees performing excepted activities
Central Office 9
Fidd Facilities 429
Employees performing shutdown activities, then fiirioughed
Central office Not applicable
Field Facilities Not applicable
Employees to be fiirioughed immediately
Central office 160
Field Facilities 834
87
Plans for Implementing a Shutdown
Department of Veterans Affairs
Headquarters Support Organizations
Impact of Absence of Appropriations
In the absence of approptiadoos, headquarters support organizations and their
outstationed activities \vtixii provide teduiical assistance to other headquarters elements
atKl to field operations will shutdown all nonexcqited activi^. This will result in 3,14S
employees being ^ven finlough notioes September 29, 1995, and an additional 48
employees when th^ complete shutdown activities. The lemainiog headquarters stafi;
including 319 outstationed employees will be on duty to perform excepted activities.
Employees vnH be advised to listen to news broadcasts to leara if the fiindiog dtuation
changes. Ifthe budget is sgned or a continuing resolution is passed, they vnll return to
work as usual on Monday, October 2, 1995.
Employees retained to perform shutdown activities will secure all files and government
property, notify customers of our reduced activity levd, turn off computer operations, and
leave their ofiSces and enter fiulough status.
Excepted activities performed during the fiiriough period will include management of the
dqjartment, including outstationed components of 222 Acquistion and Materiel
Management employees paid through the nonappropriated supply fimd, 13 employees of
the Office of Small and Disadvantaged Bu^ess Utilization paid through a revolving fimd,
40 information resources and finandal management employees in Austin, and 57 members
of the Office of the General Counsel distributed throughout the United States.
Acquisition and Materiel Management personnel will continue to secure and arrange for
delivery of medical supplies and other essential goods to fedlities where excepted
activities are taking place. They vnXL maintain contacts with vendors and ensure on time
delivery of requested items.
The information resources and financial management employees in Austin will operate on-
line systems run situation-dependent required batch processing operations as needed in
support of excepted activities. They will also process payroll for the periods prior to fimd
interruption and process payroll for staff of excepted activities.
The General Counsel's employees throughout the United States will continue with
ongoing court appearances and provide guidance and advice to excepted activities as
needed.
88
Employees performing excepted activities in headquarters will pro>ade technical support
to excqited activities in the field as well as to other headquarters organizations.
Protection of Cfe and property activities will continue. Induded in these activities are
protection of the Secretary, ongoing undercover work associated with criminal
investigations, and investigations of incidents related to excq>ted activities.
Staflfing Requirements
Employees pei&nning excq)ted activities
Central Office 219
FiddFadlities 319
Enqiloyees petfoiming shutdown activities, then fiuloaghed
Central office 39
Field Facilities 9
Employees to be furioughed immediately
Central office 2,001
Field Facilities 1,144
89
Action Plan for Lapsed Appropriation Furloughs
Date
Action Item
Responsible Oflidal
July 26
004 and 006 staff meet to begin the FY
1996 lapsed appropriation foriough
process.
004 and 006
July 26
Contact 0MB and 0PM regarding
guidance updates.
004 and 006
August 10
Devdop memo with attached guidance to
direct VA oigaiuzadons to submit
organization plans to acconq)Iish flirioughs
and to identify excq}ted activities from
fiiriough to continue patient care and
protect propetty. and essential employees
for ordcffy shutdown of nonexcq)ted
acdvides.
004 and 006
August 14
Memo handed out at Key StaflFMeeting.
Deputy Secretary
August 18
Provide memo and guidance to VANPC
members. Inform them they will be briefed
on organizational plans.
006
August 28
Plans submitted by Organizations.
Organization Heads
August 3 1
Provide copies of organizational plans to
VANPC members and brief them by
teleconference. Concurrently meet national
consultation/bargaining obligations as
appropriate.
006
Sept I
VA plan submitted to the Deputy
Secretary.
004 and 006
Septs
Plan approved and sent to OMB.
Deputy Secretary
Sept 13
Set of master employee furlough letters and
furiough guidance ready, distribution
process to CO and field finalized.
006
Sept 14
Review OMB response to plan.
004 and 006
Sept. 28-30
Distribute furiough notices upon direction
fi-om OMB.
006 and Organizations
Oct. 1
Begin initial furlough of employees not
required for orderly shutdown.
Organizations
Oct. 2-6
Furiough personnel involved in orderly
shutdown.
Organizations
Post Oct 1
If furiough delayed based on some form of
a continuing resolution, maintain readiness.
004 and 006
90 ^
VA Plan for Implementation of Furloughs in Event of Lapsed Appropriations
Responsible Organization . ~
The Office of Human Resources and Administration (OHR&A) will be the responsible VA
office for coordinating activities necessary to implement lapsed appropriation and sintilar
fiirioughs, including the following:
1) be the point of contact with 0MB and OPM on all related matters to potential
furioughs,
2) provide infonnation r^arding plans for furiou^ to the VA National Partnership
Council,
3) prepare instnictions and guidance to all VA fedlities regarding fiiriougb issues, and
4) conduct briefings/conferences to fidd and central office offidals r^arding fliriough
information and procedures,
Furlough Process
OHR&A wll pro\ade in advance written procedures and jnaster furlough notices to all VA
organizations and ensure complete pre-fiiriough distribution to all facilities through a
variety of electronic media.
OHR&A will initiate conference calls to ensure that each facility's lapsed appropriation
contact official has complete understanding of procedures and the budget situation as it
develops.
OjEQl&A will plan with all VA fecilities that in the event that 0MB advises that there will
be no VA appropriations on October 1, fliriough notices to be delivered to aflFected
employees on September. 29 unless OMB provides for an alternative date.
Facilities keep employees and unions informed as to the status of possible furlough,
including exclusions from furlough.
Facilities will individually deliver all furlough notices to affected employees.
Each facility will inform all employees of the means by which employees will be notified to
return to work afler the furlough.
91
Attachment B
Memoranda of Understeuidlng with AFGE/NFFE
92
The following constitutes agreement between the Department of Veterans
Affairs (Management and the American Federation of Government
Emplmrees, AFL-CIO, National VA Council (Union) concerning furlough as
a result of the lapse in appropriations for FY 1995.
1 . Management will inform employees of the effects of the
furlough on their entitlement to retirement, life and health insurance and
other benefits. -,
2. Title 5 and Title 38 employees shall be informed of their ri^ts
to grieve or appeal, as appropriate.
.. , . .3, . . Management agrees not-to object to «mplpyees(s) filing for . . -
unemployment boiefits during the tiulough.
4. Consistent with applicable law and r^ilations, management
will continue to provide the nm employer contribution to health benefits
under the Federal Emplqsrees Hraltn Benefit Pn^^ram for employees
affected by the change (FPM Oiapter 890 and Supplement 890-1).
5. Upon request, furloughed employees will be provided
assistance by the Department in locating outside employment so as to
avoid or minimize income lost as a result of the fiiriough. Such assistance
shall include among otlier things:
(a) use of local facilities for groups and individual meetings
to pursue outside employment;
(b) waivers of restriction on outside employment to the.
extent permissible under applicable law and government regulations. If
approval of outside employment is required, the employer wUl give it
priority consideration following the submission of the necessary oral
explanation or documentation and will attempt to provide a response as
soon as possible prior to the furlough day(s).
(c) use of sufficient administrative leave to contact Federal
job placement officials and employment agencies.
(d) use of sufficient administrative leave for counseling on
and appl3dng for unemployment benefits.
6. The Department of Veterans Affairs shall not in accordance
with law attempt to dissuade its employees from exercising their 1st
amendment rights, i.e., to express their feelings, perception and factual
matters concerning the proposed furlough.
7. In the event funding is subsequently provided to the
Department and the Department has the discretion to retroactively pay
employees, the Department will grant employees who suffer a loss of pay
through furlough administrative leave equal to the lost time.
93
8. In rating employees on annual performance, management 'will
take into consideration the impact due to absence finom work of employees
as a restilt of the ftuiough.
9. Employees will not be denied performance dwards or rated
lower for ptuix>se8 of sudi awards due soldy to fuilougb.
10. Any ofiSdal time lost as a result of a furiough will be recouped
at a later date and scheduled as expropriate. .
11. The Departmeht does not intend to assign overtime work due
to a shortage of enq)lpyees during the fiulou^
12. The Department shall make a good £aith effort to minimize the
number of furlough days and thereby limit the monetaiy impact on
employees.
13 . If a funding measure is passed during the period of furlough,
the Department will attempt to contact all employees to return to work. If
such contact is not successful, employees will not be considered to be
AWOL. Those employees \dll be granted LWOP or annual leave as
appropriate upon their return to duty.
14. Once excepted positions are identified, employees within those
positions may volunteer to be furloughed and such volunteers will be •♦
considered.
15. In accordance with E.O. 12871, 5 US. C 7106 (b)(1) matters
are mandatory subjects for local bargaining.
16. If for some unforeseen reason or unusual circumstance,
employees are in travel status when the furlough occurs, the Department
will return said employees to their duty station at government expense.
17. Facilities will seriously consider NPR guidance with respect to
employee/ supervisor ratio in determining who will be furloughed.
18. If local conflicts cannot be resolved in a timely manner,
seniority will be the tie breaking factor for retention during furlough.
19. Except under the most unusual circumstances, when the
furlough ceases, employees furloughed will return to their same tours of
duty, duty locations and work schedules.
20. When determining which positions are excepted from
furlough, it should be considered that Union officials have a statutory
obligation to represent its constituents.
40-190 97 - 4
94
3.
21. Wheofbasible and if the local paxtie« agree, ftxiiooghs will be
spread out ttmanc cnqiloyees in^ffected compeUUve leydo to mfnfTnigr. the
ixnpact oa cadx ennflcgves eod tbedisnqtdon <^
Mempkg^ee diaU be aoottcded ^
inax t&is fifijceenieat
. 22. Witiiinl^f2)wizkdaiy8,theDqsartzii^
«snMa£reeQieiittok)cal£ajdUtiM«ndiastnacttii^ Che
local U]iioaiq;>oaxeodpt Thel/>cg1UitfoainflyyeqaeStbBH)Bafaiingaad
audi a request <hfl]l be honored.
UboLfcfc^ /l^xJ^ ^
For Managoneat FV)r Unlcm
' DME
95
NFFE FURLOUGH AGREEMENT
The following constitutes agreement between the Department of Veterans
Affairs (Management) and me National Federation of Fedanal Employees,
NFPE, National VA Coimdl (Union) on behalf of its locals concerning
impact and implementation baigaming as it r^ards fiulough as a result
of the lapse in expropriations for ¥Y 1996.
1 . Management will inform employees of the effects of the
ftirlough on their entitlement to retiremeni life and health insurance and
other benefits.
~ -2."' TiUe5suadTitle38«mployee8-8haUbeMonned'OftheiFfj§^}ts
to grieve or app^d, as appropriate.
3. Management agrees not to object to en^Qyees(s) filing for
unemployment benefits during the furlough
4. Condstent with applicable law and r^;ulations, management
will continue to provide the fuU employer contribution to health benefits
under the Federal Employees Health Benefit Program for employees
affected by the change (FPM Chapter 890 and Supplement 890-1).
5. Upon request, furloughed employees will be provided
assistance b^ the E)epartment in locating outside employment so as to
avoid or minimize income lost as a result of the furlough. Such assistance
shall include among other things:
(a) use of local facilities for groups and individual meetings
to pursue outside employment;
(b) waivers of restriction on outside employment to the
extent permissible under applicable law and government regulations. If
approval of outside empIoyTnent is required, the employer will give it
priority consideration following the submission of the necessary oral
explanation or documentation and voll attempt to provide a response as
soon as possible prior to the furlough day(s),
(c) use of sufficient administrative leave to contact Federal
job placement officials and employment agencies.
(d) use of sufficient administrative leave for counseling on
and applying for unemployment benefits.
6. The Department of Veterans Affairs shall not in accordance
with law attempt to dissuade its employees from exercising their 1st
amendment rights, i.e., to express their feelings, perception and factual
matters concerning the proposed furlough.
7. In the event funding is subsequently provided to the
Department and the Department has the discretion to retroactively pay
employees, the Department will grant employees who suffer a loss of pay
through furlough administrative leave equal to the lost time.
96
8. In rating employees on annual performance, management will
take into consideration the mipact due to absence from woik of employees
as a result of the furiou£^
9. Employees will not be denied performance awards or rated
lower for purposes of such awards due solely to furlough.
10. - Any <^Gdal time lost as a result of a fiiilough will be recouped'
at a later date and scheduled as appropriate.
1 1 . Hie Department does not intend to assign overtime woiic due
to a shortage of employees during the furlough.
12. The Department shall make a good faith effort to minimise the
number of furlough days and thereby limit the monetaiy impact on
employees.
13. If a funding measure is passed during the period of furlough,
the Department will atten^t to contact all employees to return to work. If
such contact is not successful, employees will not be considered to be
AWOL. Those employees wfll be granted LWOP or annual leave as
appropriate upon their return to duty.
14. Once excepted positions are identified, employees within those
positions may volunteer to be furloughed and such volunteers will be
considered.
15. In accordance with E.O. 12871, 5 US. C 7106 (b)(1) matters
are mandatory subjects for local bargaining.
16. If for some unforeseen reason or unusual circumstance,
employees are in travel status when the furlough occurs, the Department
will return said employees to their duty station at government expense.
17. Facilities will seriously consider NPR guidance with respect to
employee/supervisor ratio in determining who will be furloughed.
18. If local conflicts cannot be resolved in a timely manner,
seniority will be the tie breaking factor for retention during furlough.
19. Except under the most unusual circumstances, when the
furlough ceases, employees furloughed will return to their same tours of
duty, duty locations and work schedules.
97
20. When detenniolQg wUcfa positions are excepted £rom
fUi1oi^li» it tfaould be considered that Union ofBdals have a statutoty
obUgabon to repreaent ita constituenta.
21. When fearible and if the local parties acree. furloughs will be
spread out Amoog en^dosrees in aflbcted competitive leviels to minifnite the
impact on taOx «mplog«e and the disniption of the Depaitment activities.
AH emploTcea ahalfbe aooordod fiir aha eqiiitahle tratmefltxohaistent
with this agreement.
22. Witliin two (2) workdays, the Department villlbrwranl this
signed agreement to local iadliUes and instruct them to give a copy to the
local uzuon ttpon recdpt
UtUL(M^
For Management
wji/£§r
98
Attachment C
OMB/DOJ Guidelines
99
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON. O.C 20503
August 22, 1995
U'{X9X.
M-95-18
MEMORANDDM FOR HEADS OF EXECOTIVE DEPARTMENTS AND AGENCIES
FROM: Alice M. RivliivJ^^^
Director k
SUBJECT:
Agency Plans for Operations During Funding Hiatus -
0MB Bulletin 80-14, dated August 28, 1980 (and amended by
the 0MB Director's nietnorandum of November 17, 1981} requires all
agencies to maintain contingency plans to deal with a possible
appropriations hiatiis. The bulletin re^iires agency plans to be
consistent with the January 1€, 1981 opinion of the Attorney
General on this subject.
The Office of Legal Oounsel of the Department of Justice has
issued an opinion dated August 16, 1995 that updates the 1981
opinion. A copy of the August 16th opinion is attached. You
should review your plans in light of this opinion, mcike cuiy
changes necesscury to conform to the opinion, and otherwise ensure
your plsin is up to date.
Please send a copy of your updated plan to your 0MB program
examiner no later tham September 5, 1995. Any questions should
be directed to your program examiner.
Attachment
100
U- S. Department of Justice
Office of L^al Counsel
Office of Ax »!M*h«i«..D.C VBiO
AsMCUoi'Aaofney G«nenl
August 16. 1995
MEMORANDUM FOR AUCE RIVLIN - - . ..r.. .
DIRECTOR, OFFICE OF MANAGEMErTT AND BUDGET
From: Walter Ddlinger f^^ /tC^
Assistant Attorney General ^
Re: Govemmeat Opeiations in the Event of a Lapse in Approptiations
This memorandum responds to your request to the Altoniqr General for advice
r^arding the peonissible scope of govenunent operations during a lapse in appropriations.*
The Constitution provides that "no money shall be drawn from the treasuiy, but in
consequence of appn^iiations made by law." U.S. ConsL ait. I, § 9, cl. 7. The treasury is
further protected through the Anddefidcocy Act, which among other things prohibits all
officers and employees of the federal government from entering into obligations in advance
of appropriations and prohibits employing federal personnel except in emergencies, unless
otherwise authorized by law. See 31 U.S.C. § 1341 et seq.^
In the early 1980s, Attorney General Civiletti issued two opinions with re^>ea to the
implications of the Antideficiency Ad. See "Applicability of the Antideficicncy Act Upon A
Lapse in an Agency's Appropriations," 4A Op. O.L.C. 16 (1980); "Authority for the
Continuance of Government Fiiiictions During a Temporary Lapse in Appropriations," 5 Op.
O.L.C. 1 (1981) (1981 Opinion). The 1981 Opinion has frequenUy been cited in the ensuing
years. Since that opinion was written, the Antideficiency Act has been amended in one
' Wc do not in this memorandum address the different set of issues that arise when the limit on the public
debt has been reached and Congress has failed to raise the debt ceiling.
' For the purposes of this inquiry, there are two relevant provisions of the Antideficiency Act. The first
provides that "[ajn officer or employee of the United States Govemmeot or the District of Columbia government
may not . . . involve either govenunent in a contract or obligation for the payment of money before an
appropriation is made unless authorized by law." 31 U.S.C. § 1341(a)(1)(B). The second provides that '[aJn
officer or employee of the United Suies Government . . . may not accept voluntary services ... or employ
personal services exceeding that authorized by law except for emergencies involving the safely of human life or
the protection of property * 31 U.S.C. § 1342.
101
respect, and we analyze the effect of that amendment below. The amendment amplified on
(he emet]gendes exception for employing federal personnel by providing that *(als used in
this section, the tenn *emeigeocies involving the safety of human life or the proccction of
property* does not include ongoing, r^ular functions of govemmeat the suspension of which
would not imminently threaten the safety of human life or the protection of property.* 31
U.S.C. § 1342.
With respect to the effects of this amendment, we continue to adbeie to the view
esqnessed to Genend Counsel Sobeit Damus of the Office of Management and Budget that
"the 1990 amendment to 31 U.S.C. § 1342 does not detract from the Asxomey General's
earlier analyses^ if anything, the amendment darifted that the Antidefkaenqr AcCs exoeptioa
for emetgeocies is" narrow aiid nitfittte applied only when a threat to life or proper^ is
imminent.*' Letter fipom Waller Dellinger to Robcit G. Damus. October 19, 1993. In cider
to ensore that (he daiification of the 1990 ameadmeat is ixM overiooked, we believe that one
a^KCtof the 1981 Opinion's desaiptioo of emergency goverBmentalfiinctions should be
inodxfied. Otherwise, the 1981 Opinion continues to be a sound analysis of the l^al
aiidtorides respecting goveroment operations when Congress has £aikd to enact r^ular
appropriations bills or a continuing resolution to cover a hiatus between r^ular
appropriations.
Since the issuance of the extensive 1981 Opinion, the proq)ea of a general
appixjpriations lapse has arisen fiequendy. In 1981, 1982, 1983, 1984, 1986, 1987 and
1990, lapses of fimding ranging from several hours to three days actually did occur. While
several of these occurred entirely over weekends, others required the implementation of plans
to bring government operations into compliance with the requiremenls of the Antideficiency
Act. These prior responses to the threat of or actual lapsed appropriations have been so
commonly referred to as cases of "shutting down the government" that this has become a
nearly universal shorthand to describe the effect of a lapse in appropriations. It will assist in
understanding the true extent of the Act's requirements to realize that this is an entirely
inaccurate description. Were the federal government aaually to shut down, air traffic
controllers would not staff FAA air control facilities, with the consequence that the nation's
airports would be closed and commercial air travel and transport would be brought to a
standstill. Were the federal government to shut down, the FBI, DEA, ATP and Customs
Service would stop interdicting and investigating criminal aaivities of great varieties,
includ'mg dnig smuggling, fraud, machine gun and explosives sales, and kidnapping. The
country's borders would not be patrolled by the border patrol, with an extraordinary increase
in illegal immigration as a predictable result. In the absence of government supervision, the
stock markets, commodities and futures exchanges would be unable to operate. Meat and
poultry would go uninspected by federal meat inspectors, and therefore could not be
maiiceted. Were the federal government to shut down, medicare payments for vital
operations and medical services would cease. VA hospitals would abandon patients and close
- 2 -
102
their doors. These are simply a few of the significant impacts of a federal govcmmenl shut
down. Cumulatively, these actions and the others required as part of a true shut down of the
federal government would impose significant health and safety risks on millions of
Americans, some of which would undoubtedly result in the loss of human life, and they
would immediately result in massive dislocations of and losses to the private economy, as
well as disniptions of many a^iects of society and of private activity generally, producing
incalculable amounts of suffering and loss. *
The Antideficteticy Act imposes substantial restrictions on obligatiiig fiinds or
contracting for services in advance of appiopiiations or beyond appropriated levels,
testrictions that will cause significant hariship should any lapse in approprialioos extend
mudi-b^ond Ibose-we-iiave historically expeiienoed. To be sute, even the ^rt lapses that '-
bave occurred have caused serious dislocations b the provisioo of services, generated
wasteful expenditures as agencies bave dosed down ceitaia operaiioas and then restaited
Aem, and disnqxed federal activities. Nevettfaeless. for any dwrt-teim lapse in
appropiiations, at least, the federal govenunent will not be tiuly 'shut down' to the degree
just described, amply because Congress has itself ptoWded .that some activities of
govertunent should continue even «^ien annual appropriations have not yet been enacted to
fund cuirent aaivities.
Tbe most significant piovisoos of the Anddeftctem^ Aa codify three basic
restrictions on the operation of govenunent activides. Fiist, the Act implements the
constitutional requirement that "No Mon^ siail be drawn from the Treasuiy, but in
Consequence of Appn^iiations made by Law." U.S. Const ait. I, § 9, cl. 7. Second,
when no current appropriations measure has been passed to fund contracts or obligations, it
restricts entering into contracts or incurring obligations (except as to situarions authorized by
other law). Third, it restricts employing the services of employees to perform government
fiinaions beyond authorized levels to emergency situations, where the failure to perform
those functions would result in an imminent threat to the safety of human life or the
protection of property.' The 1981 Opinion elaborated on the various exceptions in the
Antideficiency Act that permit some continuing government fiinaions, and we will only
summarize the major categories here;
• Multi-year appropriations and indermite appropriations.
Not all government functions are funded with annual appropriations. Some operate
under multi-year appropriations and others operate under indefinite appropriations provisions
that do not require passage of annual appropriations legislation. Social security is a
prominent example of a program that operates under an indefinite appropriation. In such
•' These restrictions arc enforced by criminal penalties. An officer or employee of the United States who
knowingly and willfully violates the restrictions shall be fmcd not more than $5,000. imprisoned for not more
than 2 years, or both. 31 U.S.C. §1350.
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103
- cases, benefit checks continue to be honored by the treasuiy, because there is no lapse in the
relevant appropriation.
• Express authotizations: contracting authority and borrowing authority.
Congress provides express authority for agencies to enter into contracts or to borrow
funds to acoompUsfa some of their fiinctions. An example is the 'food and forage* authority
given to the Dqnitment of Defense;, wfaidi audioiizes contracting for necessary dothing,
siibsistence, forage, siqiplies, etc. widiout an appiopiiation. In such cases, obligating fiuids
or contracting can continue, because the Antkkfideocy Act does ixx bar such actiWties when
thQT are authorized by law^- As the 1981 Opimon emphaazed, the ample atitboiizatioa or
even direction to petfoim a certain acdoo diat standanOy can be found in^ agencies' enabling
or organic legidation is insufiideat to support a findiog of oqness aotfaoiization or oeoessaiy
impGcalion (the exceptioo addnessed oext in the tesoQ, standing akme. There must be some
additional indication of an evident intention to have the acdvity continue despite an
appropriations lapse.
• Necessary implications: authority to obligate that is necessarily implied bv statute.
The 1981 Opinion concluded that the Antidefidency Act contemplates that a limited
number of govenunent functions funded tfarou^ annual appropriatioas must otherwise
continue deq)ite a lapse in their appropriations because the lawful continuation of other
activities necessarily implies tint these fimctioos will continue as well Examples indude the
dieck writing and distributing functions necessary to disburse the social security benefits that
operate under indefmite apprc^riations. Further examples indude contracting for the
materials essential to the performance of the emergency services that continue under that
separate exception. In addition, in a 1980 opinion, Atomey General Civiletli opined that
agencies are by necessary implication authorized "to incur those minimal obligations
necessary to closing [the] agency." The 1981 opinion reiterated this conclusion and
consistent practice since that time has provided for the orderiy termination of those functions
that may not continue during a period of lapsed appropriations.
•. Obligations necessary to the discharge of the President's constitutional duties and
powers. .■ ■ •
Efforts should be made to interpret a general statute such as the Antideficiency Act to
avoid the significant constitutional questions that would arise were the Act read to critically
impair the exercise of constitutional functions assigned to the executive. In this regard, the
1981 Opinion noted that when dealing with functions instrumental in the discharge of the
President's constitutional powers, the "President's obligational authority . . . will be further
buttressed in connection with any initiative that is consistent with statutes - and thus with the
exercise of legislative power in an area of concurrent authority - that are more narrowly
drawn than the Antideficiency Act andthat would otherwise authorize the President to carry
104
out his constitutionally assigned tasks in the manner he contemplates.* 1981 Opinion, at 6-
7/
• Personal or voluntary services "for emergencies involving the safety of human life or
the protection of property."
The Antidefidenqr Act prohibits oontractixig or obligating in advance of
appropriations generaUy, except for drcumstanoes just summarized above. The Act also
contains a sqMuate exceptioa applicable to personal or voluntary services that deal mth
emergendes. 31 U.S.C. § 1342. This section was amended in 1990. We will analyze the
effects of that ametxlateat in Bait n of tbis mcfnoiaiKjun^
Finally, one issue not explicitly addressed by the 1981 Opinion seems to us to have
been settled by oondstent adminisfrafive practice. That issue concerns wbetber the
emergency status of government fimctions should be deterauned on the assumption that the
private economy wiU continue opeiating during a lapse in appropriations, or whether the
proper assumption is that the piivalB economy will be intentqXed. As an exzmp\c of the
difference this might make, oonader that air traffic controllers perform emergency functions
if aircraft continue to take off and land, but would not do so if aircraft were grounded. The
correct assumption in the context of an anddpated long period of lapsed appropriations,
where it might be posdble to phase in some alternatives to the government actiwiy in
question, and thus over time to suspeoi the govenunent fimcdon without theid)y imminently
threatening human life or piopetfy, is not entirely dear. However, with respect to any short
lapse in appropriations, the practice of past administrations has been to assume the continued
operation of the private economy, and so air traffic controllers, meat inspectors, and other
similarly situated personnel have been considered to be within the emergency exception of
§ 1342.
' The Atlomcys General and this office have declined to catalog what actions might be undertaken this
heading. In 1981, for example. Attorney General Civilctti quoted Attorney General (later Justice) Frank
Murphy. 'These constitutional powers have never been specifically defmed. and in fact caiuiol be, since their
extent and limitations are largely dependent upon conditions and circumstances. . . . The right to take specific
action might not exist under one state of facts, while under another it might be the absolute duty of the
Executive to take such action." 5 Op. O.L.C. at 7 n.9 (quoting 39 Op. Aify Geji 343, 347-48 (1939)). This
power should be called upon cautiously, as the courts have received such executive branch assertions
skeptically. See, e.g.. Younestown Sheet & Tube Co. v. Sawyer. 343 U.S. 579 (1952); George v. Ishimaru.
849 F. Supp. 68 (D.D.C.). vacated as moot. No. 94-5111, 1994 WL 517746 (DC. Cir.. Aug. 25, 1994). But
sec Haig v. Agee. 453 U.S. 280 (1981); In re Neagle. 135 U.S. 1 (1890)
- 5 -
105
n.
The text of 31 U.S.C. §1342, as amended in 1990, now reads:
An officer or employee of the United States Government or of the District of
Columbia govenmient may not accept voluntary services for either govenunent
or employ personal services exceeding that auttwrized by law except for
emeigendes involving the safety of human life or the protection of propetty.
This section does not apply to a ooipoiation getting amounts to make loans
(except paid in capital amounts) without legal liatnli^ of the United States
- GovemmenL. As used in this secdoo, Ihe tenn 'emergencies involving the .
safety of human life or the piotecdoo of propef^' <k)es not include ongoing,
r^ularfimctionsof govenimetit the suspen^oo of wfaidi would not imminently
threaten the safety of human life or the piotectioa of pcopeity.
31 U^.C. § 1342. Because of the § 1342 bar on eti^)lo^i^ posonal services, officers and
employees may employ personal services in excess of other authorizations by law only in
emeigency situations.^ This section does iKM by itself authorize paying employees in
emeigency situations, but it does authorize entering into obligations to pay for such labor.
The cential mtetptetlve task imder § 1342 is and has always been to construe the
scope of the emergencies exccpdoa of that section. When the 1981 Opinion undertook this
task, the predecessor to § 1342 did not contain the final sentettce of the current statute,
whldi was added in 1990. Examining that earlier veraon, the Attorney General concluded
that the general language of the provision and the ^>arse legislative history of it did not
reveal its precise meaning. However, the opinion was able to glean some additional
understanding of the statute from that legislative history.
The Attorney General noted that as originally enacted in 1884, the provision forbade
unauthorized employment "except in cases of sudden emergency involving the loss of human
life or the destruaion of property." 23 Stat 17. He then observed that in 1950, Congress
The 1981 Opinion conduded thar:
(djespitc the use of the term 'volunury service.' the evident cancem underlying this
provision is not government agencies' acceptance of the benefit of services rendered
without compensation. Rather, the original version of § |1342| was enaaed as part of an
urgent deficiency appropriation aa in 1884, Act of May 1, 1994, ch. 37, 23 Stat. 15, 17, in
order to avoid claims for compensation arising froin the unauthorized provision of services
to the govemmeni by non-employees, and claims for additional compensation assened by
government employees performing extra services after hours. This is, under (§ 1342|,
governmeni officers and employees may not involve govemmeni in contract for
emplovmeni. i.e., for compensated labor, except in emergency situations. 30 Op. Att'y
Gen. 129, 131 (1913).
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106
enacted the modern version of the Antideficieocy Act and accepted revised language for
§ 1 342 that originally had been suggested by the Director of the Bureau of the Budget and
the Comptroller General in 1947. In analyzing these different fomiulations, the Aaoraey
General stated that
[wjithout elaboration, these officials proposed that 'cases of sudden
emergmcy^ be amended to 'cases of emeigency,* 'loss of human life' to
'safety of human life,' and 'destiuction of propei^* to *protfiction of propeity.
These changes were not qualified or explained by the iqmit accompanying the
1947 psoommendation or by any aspect of the legislative history of the general
appropriadons act for fiscal year l9Si. which included the modern §[1341 j. -
Act of September 6, 1950. Pub. L. No. 81-759, §1211. 64 StaL 765.
Consequently, we infer from the plain impoit of the language of tbeir
amendments that (he drafteis intended to broaden the audiority for emergency
employment
5 Op. O.L.C. at 9.
The 1981 Opinion also sought guidance from the consistent administrative practice of
the Oflioe of Management and Budget in applying identical "emefgendes" language found in
another provision. That other provision pitatiHiits OMB from appoitioning apptv^iiated
fiinds in a manner that would indicate the need for a deficiency or supplemental
appropriation, except in cases of 'emeigendes involving the safety of human life, [or] the
protection of property' — phraseology identical to the pre-lS>90 version of § 1342.*
Combining these two sources with the statutory text, the Anoniey General aiticulaied two
* 31 U.S.C § 1515 (recodified from § 665(c) a( the time of the Civiletii opinion). Analyzing past
adinini.<<tra(tvc praaice under thu> siatute. Attorney General Civileiti found that:
Directors of the Bureau of the Budget and of the Office of Management and Budget have
granted dozens of deficiency rcapponionments under this subseaion in the last 30 years,
and have apparently imposed no test more stringent than the aniculation of a reasonable
relationship between the funded aaivity and the safety of human life or the protection of
property. Activities for which deficiency apponionments have been granted on this basis
include [FBI] criminal investigations, legal services rendered by the Dcpanmeni of
Agriculture in connection with state meat inspeaion programs and enforcement of the
Wholesome Meat Act of 1%7, 21 U.S.C§§ 601-695, the proteaion and management of
commodity inventories by the Commodity Credit Corporation, and the investigation of
airaaft accidents by the National Transportation Safety Board. These few illusiratlon>
demonstrate the common sense approach that has guided the interpretation of § 665(c).
Most imponant, under § 665(c)(2), each apportionment or reapportionment indicating the
need for a deficiency or supplemental appropriation has been reported coniemporanctiusly
to both Houses of Congress, and, in the face of these reports. Congress has not acted in
. any way to alter the relevant 1950 wording of § 665(c)(1)(B), which is, in this respect,
identical to § 665(b).
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107
niles for identifying functions for which govenuneat officers may enter into obligations to
pay for personal services in excess of I^al authority other than § 1342 itself:
Fir5t,,there must be some reasonable and aiticulable connection between the
function to be perfoimed and the safety of human life or the protection of
property. Second, there must be some reasonable likelihood that the safety of
human life or the protection of prtqierty would be compromised, in some
d^ree, by delay in the peifonnanoe of the function in question.
While we continue to believe that the 1981 articulation is a fair reading of the
AntidefideiK^ Act cveii after the 1990 aiiieodtitetit, 2Se Letter from Walter Dellitiger to
Robert'G. Damusr October 19,'i993; we ve aware of the possibility the second of these two
niles might be read aMte expansivdy than was intended, and thus might be applied to
funcdons that are not emergencies within the meaning of the statute. To foitstall possible
misinteqnetations, (he seoood criteria's use of the phrase 'in some degree' should be
fcplaoed with die phrase, "in some significaiit degree.'
The reasons for this change rest on our understanding of the function of the 1990
amendment, which comes from considering the content of the amendment, its structure and
its sparse l^islative history. That histoiy consists of a solitary reference in the conference
report to the Omnibus Budget Recooctliation Act of 1990, Pub. L. No. 101-S08, 104 Stat.
1388:
The conference rqx>tt also makes conforming changes to title 31 of the United States
Code to make dear that . . . ongoing, tegular operations of the Government caiuiot
be sustained in the absence of appropriations, except in limited circumstances. . These
changes guard against what the conferees believe might be an overly broad
interpretation of an opinion of the Attorney General issued on January 16, 1981 ,
regarding the authority for the continuance of Government functions during the
temporary lapse of appropriations, and affirm that the constitutional power of the
purse resides with Congress.
H.R. Rep. No. 964, 101st Cong., 2d Sess. 1170 (1990). While hardly articulating the
intended scope of the exception^ .the conference report does tend to support what would
otherwise be the most natural reading of the amendment standing alone: because it is phrased
as identifying the functions that should be excluded from the scope of the term "emergency,"
it seems intended to limit the coverage of that term, narrowing the circumstances that might
otherwise be taken to constitute an emergency within the meaning of the statute.
Beyond this, however, we do not believe that the amendment adds any significant new
substantive meaning to the pre-existing portion of § 1342, simply because the most prominent
feature of the addition -- its emphasis on there being a threat that is imminent, or "ready to
take place, near at hand," see Webster's Third New International Dictionary 1 130 (1986) -
is an idea that is already present in the term "emergency" itself, which means "an unforeseen
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108
combination of circumsunces or the resulting state thai calls for immediate aaion" to
respond to the occurrence or situation. Id^ at 741 .' The addition of the concept of
"imminent" to the pre-existing concept of "cmeigency" is thus largely redundant. This
redundancy does, however, serve to emphasize and reinforce the requirement that there be a
threat to human life or property of such a nature that immediate aaion is a necessary
response to the situation. The structure of the amendment offers further support for this
approach. Congress did not alter the operative language of the sutute; instead. Congress
diose to enact an interpretive provision that simply prohibits overly expansive interpretations
of the "emergency' excq}tion.
Under the formulation of the 1981 Opinion, govenunent functions satisfy § 1342 if,
inter alia, the safety .of human life or the protection of property -would -bc-'comptDmisedr in
some d^iee.' It is coned vable that some would interpret this phrase to be satisfied even if
the threat were de minimis, in the sense that the increased risk to life or property were
insignificant, so long as it were posable to say that safety of life or protection of ptopeny
bore a reasonable likelihood of bdng oompromised at alL This wouM be too expansive an
applicadon of the emergency provision. The brief delay of routine maintenance on
government vehicles ought not to constitute an "emergency," for example, and yet it is quite
possible to conclude that the failure to maintain vehicles properly may "compromise, to some
d^ree' the safety of the human life of the occupants or the protection of the vehicles, which
are government property. We believe that the revised articulation clarifies that the
emergencies exception applies only to cases of threat to human life or property where the
threat can be reasonably said to the near at hand and demanding of immediate response.
Sec also Random House Diciionary of ihc English Language UnahriOccd (>M\ (2(1 cd 1987)
('emergency'" means 'a sudden, urgcni, usuailv unexpected occurrence or occaNom requiring immediaic
action'); Webster's (I New Riverside University Dictionary 427 (I9.S.S) ("an uncvpoctcd. serious occurrence
or situation urgently requiring prompt action").
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109
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND 8UOCET
WASHINOTON. aC. 20SO3
November 9, 1995
THE DIRECTOR
H-96-01
MEMORANDUM FOR HEADS OF EXECOTIVE DEPARTMENTS
AND AGENCIES
r
FROM: Alice M. Rivlin
Director
SUBJECT: Planning For Agency Operations
This memorandum is designed to help you plan your agency's
activities for next week, in light of recent developments on
fiscal 1996 appropriations.
The cxirrent Continuing Resolution (CR) expires at midnight
on Monday/ November 13, 1995- At this point, only two
appropriations bills have been enacted for fiscal 1996 . Me do
not know if Congress will pa£s a second acceptable CR by Monday
that will continue funding for activities that lack
appropriations. Because there is a real chance that this may not
occur, you shoxild begin planning now, as a contingency matter, as
follows :
Today, Thursday. November 9. You shoxild review your
shutdown plans and ensure that yovtr eoployees are properly
Informed. As noted above, the CR expires at midnight, Monday.
Therefore, Monday, November 13th will be a normal workday for the
Federal Government. You should advise employees to report for
work on Monday.
Monday, Nov<'mV>er 13: All en5>loyee6 should report for work.
We will advise you of further developments, including whether a
CR will likely be enacted. If not, you should prepare to
implement your shutdown plan on Tuesday.
Tuesday . Novf'Tn'her 14; Regardless of whether a CR has been
enacted, all employees should report to work on Tuesday, We will
advise you on whether your shutdown plan is to be implemented, as
follows .
Shutdown . If no CR has been enacted or will likely be
enacted Tuesday, we will issue instructions initiating
a phase-down of activities for non-excepted employees.
You should complete such phase -dovm activities for non-
excepted personnel, if called for, during the first
three hours of the workday.
no
Normal Qperacions; If a CR will likely be enacted on
Tuesday, we will advise agencies to operate in a normal
manner.
Attached is a siimmary of our general guidance on algency
operations in the absence of appropriations.
Thank you for your cooperation in these difficult
circumstances. We will keep in close touch with you as
developments unfold.
Attachment
Ill
General Guidance on Agency
Operations in tlie Absence of Appropriations
OMB Bulletin 80-14, dated August 28, 1980 (and amended by
the OMB Director's memorandtim of Novetnber 17, 1981), requires 2d.l
agencies to maintain plans to deal with an appropriations hiatus.
If a shutdown ocoirs, we assume each agency will be operating
under its shutdown plan as approved-by OMB in September. As a
reminder, the Attbraey General's opinion dated January 16, 1981,
t^dated by the opinion of the Office of Legal Coxmsel dated
August 16, 1995, remains in effect. In general:
o En5)loyees of affected agencies performing non-excepted
activities (as discussed in the Department of Justice
opinions) may not perform any services other than those
involved in the orderly siispexision of non-excepted
activities; excepted activities that may be continued
are generally those that are authorized by law or that
protect life and property.
o Agencies may not permit voluntary performance of non-
excepted services; and
o Agency heads make the determinations that are necessary
to operate their agencies during an appropriations
hiatus (within the guidance established by the.
Department of Justice opinions and this memorandum, and
pursuant to normal agency processes for the resolution
of issues of law and policy) .
Please address any questions to your CX4B budget examiner (s),
or to OMB General Coxmsel Robert Damns (395-5044) , or Associate
General Counsel for Budget Rosalyn Rettman (395-4778) .
112
00 1^
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINSTON, aC 2OS03
November 13, 1995
THE DIRECTOR
M-96-02
riEMORANDOM FOR HEADS OF EXECOTIVE DEPARIMENTS
AKD AGENCIES
FROM: Alice M. Rivl
Director
SUBJECT: Planning for Agency Operations in the Absence
of Appropriations
This memorandum follows up on my memoremdum of last week,
and is intended to provide further guidance on planning for
shutdown .
The c\irrent Continuing Resolution (CR) expires at midnight
tonight, Monday, November 13, 1995. We have no indication yet
whether Congress will act today and pass an acceptable CR.
Therefore, beginning tomorrow morning, Tuesday, November 14,
1995, the head of each agency must be prepared to inclement his
or her existing plan for closing down operations funded by
accounts that have not received appropriations.
All employees should report to work tomorrow. During the
day tomorrow, we will advise you on whether your shutdown plan is
to be implemented, as follows:
Shutdown . If no CR has been enacted or will likely be
enacted Tuesday, we will issue instructions initiating
a pHase-down of activities for non-excepted employees.
Normal Operations. If a CR will likely be enacted on
Tuesday, we will advise agencies to operate in a normal
msinner . " •
Again, we thcuik you for your cooperation in these difficult
circumstances. We will continue to keep in close touch with you
as developments unfold.
113
Attachment D
Post-Shutdown Report on Costs/Service Impact
114
The Deputy Secretary of Veterans Affairs
Washington
NOV 21 1995
Mr. John A. Koskinen
Deputy Director for Management
Office of Management and Budget
Executive Office of the President
Room 260, Old Executive Office Building
Washington, DC 20503
Dear Mr. Koskinen:
Enclosed are the Department's responses to your requests for
Information concerning costs Incurred by VA resulting from the shutdown and
for a list of services to the public which were curtailed or denied during the
shutdown.
Sincerely yours.
Hershel W. Gober
Enclosure
115
Department of Veterans Affairs
Cost VA incurred dmini^ shutdown
VA incurred some costs as a direct result of the shutdown. Following are some
Items that resulted in these costs. However, the actual costs to VA are not yet
available.
Interest payments and lost discounts on vendor pa3mients
Lost discounts on property taxes
Loss of prepaid tuition for training
Services to the Public which were cnrtafled or denied:
Telephone calls finom veterans to Veterans Benefits ofiBces went unanswered
Mail from veterans was neither oi>ened nor answered
Veterans Benefits oflfices were closed to ""walk-in" veteran-dlents
Vocational rehabilitation counseling appointments were canceled
Pending claims for comp>ensation, pension, education and vocationad
rehabilitation were not processed
Retroactive pa3rments for compensation, pension and education claims were
not processed
Pa5nments of Gl Bill education checks and insurance death claims were delayed
Loan Guaranty certificates of eligibility and certificates of reasonable value
were not issued
Property appraisals were not conducted
Counseling and services were not provided to veterans to help them avoid
foreclosures
Beneficiary travel to VA medical facilities was decreased
116
Services to the Public which were cttTtnneid or denied rp.ontinn«Hl)t
Access was diminished to "800" numbers for inforaiation on CHAMPVA and for
recruitment and placement services
Board of Veterans Appeals case processing and hearings were delayed
Applications for headstones and markers were not processed and orders were
not placed for private, state, and national cemeteries
Markers and headstones received at national cemeteries were not placed on
graves
Processing of requests for Presidential Memorial Certificates ceased
Applications fixjm states for grants to btilld or improve state veteran cemeteries
were not processed
Access was denied to some national cemeteries for some purposes
Weekend scheduling of inteiments for the following week was canceled for all
national cemeteries
Pa)nTients to contractors for services already rendered at national cemeteries
were not made. This was of great impact to small and minority contractors
Calls to the IG's Hotline went unanswered
FOIA requests from the media and public for IG reports went unanswered
IG internal audit opei^atiojis were curtailed - including Congressionally-
mandated CFO work
Nearly all IG criminal investigative work was halted
Acceptance of discrimination complaint and sexual harassment cases was
halted
Collection ceased of monies owed the Department involving Medical Care Cost
Recovery, bankruptcy cases, and other legal programs
Cases pending before the Court of Veterans Appeals were continued
117
Services to the Public which \yere curtailed or denied (continued):
Final agency decisions were not processed on FOIA/ Privacy Act requests from
the public
Review of contracts and other procurement matters was delayed which affected
completion of various Department projects/facilities used by the public
Legal matters relating to veteran patients and claimants may have been
delayed
Administrative hearings afifecting Department employees and managers were
delayed
Routine responses to Members of Congress and Committees were unavailable.
One hearing was canceled. Casework In Senate and House liaison offices was
suspended.
On-time payment of vendor invoices were not made
Vendor access to information on payment status was limited
118
Attachment E
Agency Shutdown Guidance
119
Department of Memorandum
Veterans Affairs
0... AUG 14 1995
F«>m Assistant Secretary for Human Resources and Administration (006)
Sum Shutdown of Department Operations Due to an Absence of Appropriations
To Administration Heads, Assistant Secretaries, and Other Key Officials
1. At this time it is unclear if VA's budget for Fiscal Year 1996 will be
approved by October 1, 1995. In the event that it is not approved, the
Department will be required to either operate under a continuing resolution,
at current or reduced levels of funding, or absent a continuing resolution, to
cease all non-excepted activities beginning October 1, 1995.
2. In the event of an absence of appropriations, we will need to shutdown
non-excepted activities and furlough employees performing these activities.
In the past, excepted activities that may be continued include those that
protect life and property. In addition, employees performing non-excepted
activities may be retained for as long as it takes to complete an orderly
suspension of that activity (usually one-half day). For a more detailed list of
excepted activities, we have attached some historical guidance, most notably
an Office of Management and Budget (OMB) memorandum entitled Agency
Operations in the Absence of Appropriations, dated November 17, 1981.
3. I am asking each of you to review your operations and identify the number
of employees that should be excepted and those that are necessary to
accomplish shutdown activities. Those identified to accomplish the shutdown
would themselves be furloughed as soon as that work is accomplished. In
reaching your decision, you should be guided by the attached guidance from
OMB which includes the following criteria:
Excepted Employees:
Employees necessary for the protection of life and property,
including medical care of inpatient and emergency outpatient
care, protection of federal lands, buildings, equipment, and other
property owned by the United States, law enforcement and
criminal investigations, emergency and disaster assistance, and
the protection of research property.
120
Page 2
Administration Heads, Assistant Secretaries, and Other Key Officials
Shutdown Employees:
Those necessary for the orderly shutdown of non-excepted
activities.
4. By August 25, 1995, please submit your shutdown plans for both Central
Office and field activities to my office. We will be sharing your plans with the
National Partnership Council prior to implementation. In addition, we may
have to submit the Department's overall plan to 0MB as we have done in the
past. At a minimum, your plan should contain:
(1) Excepted activities and number of employees necessary to carry
out those activities;
(2) Description of activities shutdown employees will perform, length
of time needed, and number of employees necessary to carry out activities;
(3) Procedures to notify customers of suspension/reduction of
activities; and
(4) Procediu-es to notify employees of their status relative to excepted
or non-excepted activities.
5. To assist in this effort, I have also attached copies of the shutdown plans
previously developed for your organization. If you have questions regarding
the development of plans or furlough procedures, you or members of your
staff may contact Richard Norman, Director, Employment and Training
Service or Dennis Curley, Chief, Title 5 Staffing Division. Mr. Norman can
be reached on 565-8804 and Mr. Curley on 565-8842.
121
Appendix Al
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND »UDCrr
WASMINOTON, O.C. KM9
October 5, 1990
HEKORANDUM rOR HEXDS OT SXECtTIVE OEPARTOEKMV
AKD ACEHCIES ^ ^'XsWC-^^^ .
FROK: Rieh«rd C. *»**-— ^^'^
SUBJECT: Aganey Op«xmHon* in the M>s«nca o£
Appropriations
The Continuing Kaaolution (CR) axpirea at aidnlght
tonight. October 5, 1990. Wa have no indication yat vhather
Congress vill act today and pass a CR. The Prasldant has
stated that it is his Intention not to sign a CK imtil there
has been satisfactory Congressional progress on the budget.
At this point, there has clearly not been satisractory
Congressional action. Therefor*, beginning toaorrov aomlng
(Saturday) , October 6th, rh« head o£ aach agency Bust be
prepared to implenent bis or her existing plan for dosing
dovn operations funded by accounts that have not received
appropriations .
0KB Bulletin 80>14, dated August 28, 1980 (and amended
by the 0KB Director's neaorandum of Noveaber 17, 1981),
requires all agencies to aaintain plans to deal vith such an
appropriations hiatus. Purtharftore, the Attorney General's
opinion dated January 16, 1981, supporting this bulletin,
reaaine in effect. In general:
o Eaployees of affected agencies perforaing non-
excepted activities (as discussed in the Attorney
General's opinion) aay not per f era any services
ether than those involved in the orderly suspension
of non-excepted activities; excepted activities
that aay be continued are generally those that are
euthoriced by lav or that protect life and
property.
c Agencies aay not perait voluntary perforaanca of
non-excepted services.
lapleaentation of this shutdown process vill be
particularly difficult because any lapse of appropriations
vill occur over a vee)cend (vith a Monday holiday) .
■o Weekend Ewplovees — Agency shutdown plans should
be iapleaented for non-excepted weelcend employees,
122
vho ahould be instructed to report Xor their first
scheduled work turn for the sole purpose ot
cngeging in orderly shutdown activities. Excepted
weekend enployees should be inctructed to report
tor work and to psrCom their excepted activities.
o ^11 Other EffiPleveeB — All regular enployees
perfomlng non-exceptad activities, as well as
excepted enploycea, should be instructed to report
ioT work on Tuesday, October 9th, as scheduled.
Over the weekend and during the day on Tuesday, we will
provide further instructions, depending on the status of
appropriations action, as follows:
o Worrnal Qperatiena; If a CK that suspends sequester
is clearly likely to be enacted on Tuesday (or has
been enacted over the weekend} , agencies will be
instructed to operate in a noznal Banner.
o Shutdown; If no CR is likely to be snaeted on
Tuesday, we will issue instructions Initiating a
phase-down of activities for non-axcapted
e&ployees. Such phase-down activities for non-
excepted personnel. If called for, shotild be
co&pleted during the first three hours of the ■
workday.
o Sequester; If (on or before Tuesday) a CR is
enacted that does not suspend sequester, you should
begin iapleaenting your sequester plan.
Please address any question to your 0KB budget
ex&Biner(B), or to OKB Acting General Counsel Robert Damus
(395-5044), or Associate General Counsel for Budget Koealyn
RettJoan (395-5600).
123
EXECUTIVE OFFICE OF THE PRESIDENT ,„„„ ^. .^
Appendix A>
OFFICE OF MANAGEMENT AND BUDGET
WASHiNOTON. e.c. xuei
Bulletin No. 80-14, Supplement No. 1 August 20, 1982
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SOBJECT: Agency Operations in the Absence o£ Appropriations
1. Purpose. This supplement updates OMB Bulletin No. 60-14,
dated August 28, 1980, and requires the submission of contin-
gency plans for review by OMB. The purpose of the review is
to - assure adequate contingency planning and Government-wide
compliance with the provisions of the Antideficiency Act.
2. Baclcqround. OMB Bulletin ^o. 80-14 instructed agencies to
develop plans for an orderly shutdown in the event o.£ a
funding hiatus. It became necessary to carry out these plans
during the November 1981 hiatus. In reviewing that experience
and the operational plans in effect during the period inmedi-
ately preceding enactment of the March 31, 1982 Continuing
Reeolution, certain difficulties were observed:.
— some agencies have not fully complied with the
requirements of OMB Bulletin 80-14, and do not have
fully operational contingency plans;
, — disparities appear to exist between some agencies as
to the definition of activities necessary to protect
life and property; and
— disparities appear to exist between some agencies as
to the time necessary to complete the orderly shutdown
of nonexcepted activities.
3. Actions required;
a . Amend the date that appears in section 2 to
January 16, 1981.
b. Delete the last sentence of subsection 3.c.
c. Add subsection 3.d. as shown in the attachment.
/:iuuj A. fUU-^
David A. Stoc)anan
Director
Attachment
124
Attachment
Material to be added to
OMB Bulletin No. 60-14,
Section 3
d. Reporting. The plans required in subsection c will
be submitted to OHB by September 15, 19B2.
The following information will be provided with the plans:
(1) Estimated tine to the nearest one-half day to
complete the shutdown in accordance with the plan.
(2) Number o£ employees expected to be on-board
before implementation of the plan.
(3) Total number of enployees to be retained, under
the plan because (a) they are engaged in m.ilitary, law
enforcement, or direct health care activities, or (b) thelT
compensation is financed by other than annual appropriations.
(4) Number of employees, not otherwise exempt, to be
retained to protect life and property.
within the guidance established by the Attorney General's
opinion of January 16, 1981, and this bulletin, agency heads
are to make such determinations as are necessary to operate
their agencies during an appropriations hiatus, and to do so
pursuant to normal agency processes for the resolution of
issues of law and policy. Questions that cannot be deter-
mined by an agency should be addressed to OMB. '. All
unresolved questions relative to the construction of the
Antidef iclency Act will be jointly referred to the Office of
Legal Counsel of the Department of Justice.
If It is estimated that more than one-half day will be needed
to complete the shutdown or that the number of employees to
be retained to protect life and property will exceed five
percent of the number of employees on board at the beginning
of the hiatus less those exempt for reasons specified in item
(3) above, agencies will submit policy statements and legal
opinions supporting those estimates.
125
Appendix A3
EXECUTIVE OFFICE OF THE PRESIDENT
orricE or management and »uocrr
WAKMINCTON. O.C SBKl
■ Uwwtotr 17, 1981
tSM0?AK3M FCM KLUS OP PjCUnVE JSiyJCD^gS MO ASOICZES
ntOrt: tavid A. StocSsaan
'S0B7£Cr: Agenc^ CSpentions In the Abs«net eC KfptQprUtions
Public X^tf 97-51, the Contlnuino Kesolution «naet«9 ty the Oangrcss oo S^enber
30, 19S1 %o 'Provide for- tpprvptijiiioTit for all executive md Judieiil branch
ecco;nts, vill c^.lr«'.on-aidnigt)t ftiday, ttovesfaer 20. lb rtgulcr
.expropriations bills for Fiacal Year 1982 bcve been sdbsitted to the President
'Ccsirq the period of the Cbntinolng Feaolotlon, and the Boose of KejresenUtives.-
and Senate ere presently considering videly divezgent Second Oootlining ^
P^solutions. Tnere is, therefore,, a. possibility that no ip^rppriatlaas will be
enacted es of K3ver,ber 21.
Under the circ-jTjtenees, you should begin orderly planning to deal vith this
possibility.
CK3 Bulletin 80-14, dated August 28, 1980, requires all agencies to s&intain
caiti:>;en::y pi ens to deal with the cventuali^ of en ippropriatism bietias.
Additicrally, the opinion of the Attorney General dated January 16, 1S31, -
«ttecr>%d, Te.T.Ains in effect.
Cx&rples of excepted activities were developed tditn the Executive Bzsd) last
. faced the possibili^ of an apprioriatiom hiatus, and were eent to agencies t>y
forrer Otii Director Jenes HcInQre en Scptcnbcr 30, 1980. ' Tbay are:
Ee^ inning (N7ve(9ber.21, 1981], agencies e^ continue activities otherwise
ajtnorized fcy law, those that protect life and property and txose
nMessary to begin ];hasedosn of other activities. Prinaxy axzsples of
ectivities egineies nay continue are those Wiich say be found 0)der
er?li cable statutes to:
1 . Provide for the national aecuri^. Including the conduct cf foreign
relations essehtiel to the national aecurity or the a&fcty cC life and
property.
2. Provide for benefit payments end the perfocnance cf i-r<n^rmrt
obligations under no-year or itulti-year or other funds remalairQ
(v^leble for those purposes. .
3. CcnSjct essential activities to the extent that they protect life end
prcyerty, incluiirq:
£. Hedic&I caxe of ijpetients and cinergency outpatient csre;
40-190 97 - 5
126
t). Activities essential to eisure oontinueiS public heiJth enS safe^,
including safe uae of fr«rj ard drugs anS safe uae of hertxdeus
eatcrials;
c. Oie osntinuiinc* of «ir traffic awittol anS ether trampartation
safety functions and Uie protection of tnnspsrt property;
6, border and osutil pnottctlon and aurvtlllancc}
e. Protection of Fc<3eral lands, buildings, «aUrways, eTiipwnt and
other property o«r>ad by the Oaittd SUtasj
f . Care of prisonta and btltcr pizsons la the costaiy cf the mitcd
Steterr
g. law enforcement tni crininal invtstigations}
h. &i«rgen£y .and disaster asslstaneei
i. i^tivltlcs essential to the preservation of the essential elements
of the troney an3 barvcing >yst*i of the United States, Ineludlrg
odrrowir^ anj tax collection activities ef the Treasury} i
j. Activities that ensure production of po^^r and naintcnsnoe of the
power distrioution aysteaj and
X. Activities necessary to j»intaln protection of researdi pcpperty.
you shDuld iiainuin the staff and support senrices necessary to continue
these essential functions.
In edition, the follovirq policies %*ill be in effect In the event of a Vovtxixz
21 afprcpriations hiatus: •
1. All employees perfotning non-excepted activities defined by this serorandum
arri ty tne Attorney General's opinion of January 16, 1981, are permitted to
perfona ro's*n^ic«» other tnan those Involved in the orderly suspension of
egeacy operations.
2. Kith regard to ron-excepted sgency activities and agency personnel
perfomur^ then, particular attention should be paid to thoke prwisions c£ the
Antibeficiency Act that do rot permit agency acceptance of voluntary, i.e. .
non-excepteij services. Accordingly, in the event that the appropriations hiatus
continues reasorably be^w^d Hsnday, KTvertber 23, 1961, agency ocads will be
re^jiretJ to Ri&>:e oetermlnations as to whether non-exceptad personnel have
ooc^pleted all p^ase^Twn tas)cs incident to the orderly suspension cf agency
cperetions. At such ti;t», the services of those enployees oan ts longer be
accepted in the a^tsenee of appropriations.
127
3. SUs tseroraTtdun is principally directed towazdi the ability of agencies to
cbliqatc f a'kis in the assence of apprppriations. Xt ahould be eate dear tnat«
during a eppropriatiou hiatus^ fur^s soy not be ■vailable to pcn&it agency
payment of obligations. All personnel performing excepted Mrvices, includix>g
Activities incident to the orderly csspension et agency cpcratians, should be
assured that the United Sutes will not contest its lagal obUgation to aaxs
payncnt for such services, even in the absence of apprppriations. .
4. Agencies are requested to report prcnptly.to CMi staff sap Bomally handle
their budgets any najor dlsrvptiens of activities or services that's^ oar tfdll
iinminently result f ron the absence of awtppriatioos.
5. Kithin the guidance established by tne Attorney General's cplAion of Janoazy
Jjg, 1981« and tnis nororandixv agftn^ beads arc to aani such detetninatiom as
are 'tiecessary to operate' their agencies during an appropriations biatos, snd to
.do so pursuant to normal agency processes for the resolution of issues of la^ .
/and policy. Qjestions tiiat cannot be determined by an agency should be
^iressed to Or&3. All unresolved questiom: relative to the oonstructioo of thfe
Antidsficlency Act will be jointly referred to the Office of Legal Counsel of
the Deparbnent of Justice.
128
FVPr-ifTiw,. Appendix A4
EXECUTIVE OFFICE Or THE PRESIDENT
OFFICE OF MANAGEMENT AND BUOGET
%VAXHINCTON. O.C *3U9
Bulletin No. 8O-14 -August 2B, 1980
TO TBI -ECAOS OF EXBC07ZVE OEPAItSMEHTS ARD CSTABLXSBHQtTS
SUBJECT: Shutdown of Agency Operations Ojpon rallart bj the
Congress to Snact Appropriations
1. Purpose arid -^Ibveraqe. This Bulletin provides policy
guidance ^ and- . ^instructions, for actions to - be taXen by
.X^ecutive Branch' agencies vhcn - failure by the Congress to
cn&et either regulai; appropriations / a continuing resolution,
or needed supple&entals results in interruption o£ fund
av&il&bility. This* -BUlietin does not apply to specific
appropriations action by the Congress to deny program
funding. In the instance of partial funding Interruptions/
e.g., failure of the Congress •. to act on program
supplenentals, special procedures beydnd those outlined in
this Bulletin may be warranted. In. such cases, 0^Q
representatives responsible for the affected agency** budget
estinates should be consulted.
2. BacVground. - The Attorney General issued an opinion on
April 2S, IS'.eo that the language and legislative history of
the Antidefi'ciency Act (31 U5C 665) unatsbiguously prohibits
agency officials from incurring obligations in the absence of
appropriations. The essential -clcacnts of the Attorney
General's advice are tbatt
a. In the absence . of «ev appropriations. Federal
officers may incur no obligations that cannot lavfally be
funded fron prior appropriations unless auch obligations are
otherwise authorized by law.
b. Under authority of the Antideficiency Act, Federal
officers nay incur obligations as . necessary for orderly
termination of an agency** functions, but bo funds say be
disbursed.
c. Under its enforcement responsibilities, the Depart-
ment of Justice will take actions to apply the criminal
provisions of the Antideficiency Act in the future when
violations of the Act ape alleged under such circumstances.
129
3. Actions required. Agenciee laced, with funding
interruptions oust take «teps to forestall interruptions In
operations and assure that they are In a position to linit
their activities to those directly related to orderly
shutdown of the agency.
«. Reallocation cf funds prior to shutdovm. Prior to
initiation of orderly shutdovn aetiviticSf cgency heads will
linit their operations to aininoa essential activities and
vi'll reallocate to the extent pcraittcd by law all available
funds in order to forestall the fund Interruption date as
long as possible. Reallocation of funds will be «ade aubject
to the following requlrcaentsi
(1) Reallocation below the appropriation and fund
account level will be eceoBplished by telephonic revision to
allotments ' and suballotaents (each revisions vill be
documented and ' iiancdiatcly reflected in forxaal vritten
changes :to .the .regul|ir.--allotnent/suballotaent docoaents).
.<;2:) .Agencies that have specific statutory authority
«o reallocate and transfer funds between appropriation and/or
fund a'tbounts will effect the transfers in accordance with
current standard fi-scal. procedures. Such transfers generally
vill be effected on Standard Form (S?) llSlf "Nonexpenditure
Transfer of Funds' (see 0KB Circular No. A-llf section 21.2,
for a description of when expenditure transfers night be
required). This Bulletin does not convey new authority to
transfer funds.
(3) . For this purpose adjustnent to snounts contained
in 0KB apportionments 'may be nadc without submission of a
reapportionment request.
b. Orderly shutdovn activities. When all available
■funds, including reailotted/reallocated funds, are exhausted,
orderly shutdown setivitles Must begin. Each agency bead
must determine the specific actions that will be taken;
however, all actions nust contribute to orderly shutdown of
the agency and give priaary consideration to protecting life
and safeguarding Government property and records. Such
actions should be acconpllshed. in a way that vill facilitate
reactivation when funds are sude available. Agency beads
will notify 0KB, OPK, Treasury, and CSA iBnediatcly when
shutdown activities are being initiated. . These central
agencies vill be responsible for notifying their own regional
offices, except as noted in paragraph (3).
130
, , , J}J Appropriations and funds. Ag«ncy heads will
Jlir.it obligations incurred to those needed to nalntaln the
ir.lnimura level of «sientiel activities necessary to protect
life and property; to process the necessary personnel
actions; to process the personnel payroll for the periods
prior to fund Interruptioni and to provide for orderly
transfer of custody of property and records to the General
Services Administration (GSA) and the Office of Personnel
Management (0P«) for disposition.
(2J. Personnel and personnel . records « Mcccssary
personnel, actions will Be taken to release aoploytes ' In
accordance '■ with applicable law and Office of Personnel
Management's regulations. Preparation of aaployet notices of
furlough and processing of personnel and pay records in
connection with furlough 'actions 'are essential shutdown
•actiyiti-es. Agencies shbald plan for .these functions to be
performed J>y' en^tloyces who arc retained for orderly
■'term'lTkatlon of agency activities, as *long as those esployees
ar£^available. As soon as agencies detcraine the date after
which they will no longer be able to Kalntain custody of
personnel records', .'they should sotify the Office of Personnel
Management to arrange -for orderly transfer of custody of the
personnel records to 0PM and GSA, jointly, for carctaking and
protection of the records. If -necessary to protect the.
Interests of individual employees during the period when all
er.ployees of the agencies are on furlough, OPH will provide
access to the appropriate personnel records "^tir retrieve
information and/or process personnel actions, e.g.,
separation-transfer of an employee who secures eiq>loyaent in
another agency. Guidance for planning such actions and
relevant questions and answers as to employees* benefits will
be provided separately by'OPM.
(3) Property and nenpersonnel records. Inventories
of property end records will be made to assure protection of
the Government's interests and the dains of affected private
entitles and individuals (including vendors and beneficiaries
of Federal programs). Upon determination that agency funds
are no longer available, agency officials should contact the
appropriate Regional Administrators, General Services
Administration, for assistance in determining the disposition
of agency records, real and personal property, aChd
outstanding requisitions, contracts, grants and related
items. Detailed guidance on such natters are contained int
— 41 crK 101-11.4; Clsposltlons of records.
— 41 CFR 101-43 and 101-47; Disposition of personal
property and real property.
131
— FP^1R 101-36.5, 101-37.203(0, and 101-37.307-1;
Dispositions ©f aotonatic data processing,
communications, and telephone equipment.
— CSA motor pool accounting and record system
operations guide; Disposition of inotor vehicles.
7he transfer to the General Services Administration of
property and records shall not be atade until 30 days have
elapsed from the start of shutdown activities and then only
after a determination is Bade that the funding hiatus will
continue indefinitely. '
c. Plarinihq-' Agency heads should develop plans ^or an
orderly shutdown that reflect the policy and guidance
provided in this Bulletin. Such plans necessarily . will be
tailored to each agency's , needs -in recognition of the unique
nature>vof>its -funding- sources, aissionsr . and authorities.
Vhile every agency 'should 'have a plan, the scope and detail
of the plan '-should .be cpnmensurate with the likelihood that
s'hutdown^. will be necessary and vith the complexity of
shutting down the agency.
4. Effective dates." The • instructions in this Bulletin are
effective immediately and remain in effect until rescinded.
5. Inquiries. Budgetary questions should 'be directed to the
0MB representatives responsible for review of each agency's
budget estimates.
Fiscal proce.dures questions should be directed to the
Division of Government Accounts and Reports, Bureau of
Government Financial Operations, Department of the Treasury,
Treasury Annex fl, Washington, D.C. 20226 (Telephone:
(202) 566-5844).
Agency officials nay obtain additional information and
technical assistance on personnel natters by contacting their
agency officer at the Office of Personnel Hanagcncnt.
Property and nonpersonnel records disposition questions
should be directed to Office of Plans, Prograns, and
Financial Management, General Services Administration,
Washington, D.C. (Telephone: (202) 566-1807).
(202} St)t-1BH7). A
0_ C7. jif^Ur.^.
JA;(ies T. Mclntyre, Jr.
Director
132
Memorandum
DATE: September 19, 1995
TO: VA Field Human Resource Management Officers
FROM: Director. Employment and Training Service (054)
RE: Lapse of Appropriation Furlough Guidance
1) Lq)se of Appropriation fiirioughs present unique circumstances regarding suspension of
standard adverse action notice periods to employees, yet do not lessen management's
desire to keep employees informed regarding the possibility of fiuiough, as well as pay,
benefit and other issues that may a£fect them. This memo transmits to you information to
help you and management prepare for and implement such furloughs should they be
necessary.
2) The diskette that contains tbis Microsoft memo (file name: Lapsemem.doc) also
contains two other files, Q&As and a master fiirlough notice with attachments and
instructions.
3) Lapsed appropriation fiirlough Q&As are found in file lapseq&a.doc. This file can be
used as is for HRM staff, management and employees, or can be tmlored to fit the
intended audience.
4) The fiirlough notice file is lapsefijr.doc. Included in this file are the following:
1) master notice of fiiriough,
2) attachments A-D, appeal rights.
3) instructions for handling notices, and
4) instructions and guidance for distributing notices to employees.
5) Although it is entirely possible that an interim budget solution may be adopted by
October 1, this information is provided for your use in planning for the possible shutdown,
either October 1 or at the end of any continuing resolution that may be temporarily
adopted by the legislative and executive branches.
Richard L. Norman
To:
Subject; Notification of Furlough not to exceed 30 Calendar Days
1. This is to notify you that a decision has been made to furlough you without pay
effective October 1, 1995 for a period not to exceed 30 calendar days for the following
reason:
Since neither an appropriation for Fiscal Year 1996 nor a continuing resolution
extending the Fiscal Year 1995 appropriation has been enacted, no further
financial obligations may be incurred by the Dqwrtment, except for those
related to the orderly suspension of operations or performance of excepted
activities, such as work necessary for national security, preservation of life,
or protection of government property . Because your services are not needed
for the orderiy suspension of operations and you arc not engaged in one of the
excqjted functions, it is necessary to furlough you for the period specified above.
2. This action is being taken because of a sudden emergency requiring curtailment of
the DqMirtment's activities; therefore no advance notification was possible. The
customary 30 day advance notice period and opportunity to answer are suspended
under the provisions of 5 CFR 752. 404 (d) (2).
3. If employees are being retained in your competitive level, they are required for
orderly suspension of £)q)artment operations or they are performing an excq>ted
activity.
4. During the furlough period, you will be in a non-pay, non-duty status. Also during
the furlough, you will not be permitted to serve as a unpaid volunteer and must remain
away from your workplace until VA has authority to pay your salary.
5. It is your responsibility to listen to public broadcasts. When you hear that a
continuing resolution or a FY 96 appropriation for VA has been approved, you will be
expected to return to work at the beginning of your next regularly scheduled tour of duty
6. The furlough will have no effect on your entitlement to life and health
insurance. Neither will it change your service computation date.
7. Any appeal rights to which you may be entitled are provided in the attachment to
this notice. If you have any questions regarding your appeal rights or any other
matters related to this letter, you should contact the Human Resources Management
Service/Division.
Deciding Official Date
I acknowledge receipt of this decision letter.
Employee's signature Date
134
ATTACHMENT TO NOTICE OF DECISION TO FURLOUGH(Appeal Rights-
Attachment A)
You are entitled to appeal to the Merit systems Protection Board. Appeals to the
Merit Systems Protection Board (MSPB) must be in writing and must be filed with the
Board no later than 30 calendar days after the effective date of this action (i.e. the first day of
furlough). Any Bppeal to the Board must be filed either by mail or in person. A copy of the
appeal form is enclosed. You may review the MSPB's regulations in . You
may be represented by an attorney or other rq>resentative of your choice. Following is the
address of the MSPB Regional Office having jurisdiction as indicated:
135
ATTACHMENT TO NOTICE OF DECISION TO FURLOUGH (Appeal Rights-
Attachment B)
You have the right to appeal this action to the appropriate decision official, in
accordance with VA grievance procedures, at any time after you receive this decision but not
later than IS calendar days after the effective date of this action Ci.e. the first day of furlough).
The appeal must be in writing and set forth the specific reasons, facts, and circumstances
which make you believe that the action taken was unwarranted.
In an appeal, you have the right to a hearing before an examiner under the provisions
of KfP-S, Part, Chapter 771. To obtain a hearing, you must request it in writing in your
appeal. If you do not indicate in writing that you want a hearing, your case will be decided on
the basis of the record. At the hearing, if one is held, you may be rq)resented by a person of
your choice and you may present evidence and wimesses who are willing to testify. The
Human Resources Management Office, upon your request, will advise you further regarding
the procedures for filing and processing grievances.
136
ATTACHMENT TO NOTICE OF DECISION TO FURLOUGH (APPEAL RIGHTS-
ATTACHMENT Q
You are entitled to ^ppeai this action to the Merit Systems Protection Board (MSPB),
or under the n^otiated grievance procedure, but not both. You shall be deemed to have
exercised your option to appeal this action to the MSPB, or under the negotiated grievance
procedure at su<^ time as you timely initiate action to appeal to the Board or timely file a
grievance in writing under the negotiated grievance procedure. If you elect to file a grievance
under the n^otiated grievance procedure, you will be entitled to union rq)resentation as
provided for in the n^otiated agreement
If you appeal to the MSPB, your appeal must be in writing and must be filed with the
Board no later than 30 calendar days after the effective date of this action Ci-e. the first day of
furiough). Any appeal to the Board must be filed either by mail or in person. A copy of the
appeal form is enclosed. You may review the MSPB's regulations in . You may be
rq)resented by an attorney or other rq)resentative of your choice. Following is the address of
the MSPB Regional Office having jurisdiction as indicated:
137
ATTACHMENT TO NOTICE OF DECISION TO FURLOUGH (Appeals Rights-
Attachment D)
As a temporary employee oi' one who is serving a trial or probationary period, you
have no appeal rights on the f\irlough.
138
INSTRUCTIONS FOR DISTRIBUTING FURLOUGH
SHUTDOWN NOTICES TO EMPLOYEES
1. Shutdowns due to lapse of appropriations are considered to be "emergency" equivalent
situations because they cannot be anticipated with certainty. Authorization from OMB to
implement such furloughs usually occurs only after all efforts to avoid shutdown have taken
place.
2. Since shutdown is a last resort, ihe reason for furlough only exists at the last minute, hence
the suspension of luU adverse aciion procedures, especially tlie 30-day no'Jce, and the
subsequent need to distribute notices quickly while employees are still on the job./
3. Furlough notices are not to be distributed to affected employees until the station receives
VACO authorization. This authorization will most likely come with short advance notice
firom OMB, perhaps less than a day before furloughs are to b^in.
4. Complete distribution of notices to all employees, present and absent on the last workday,
should be incorporated into plans for orderly shutdown of non excq)ted activities.
5. Each station should assess the lead time necessary to mass produce, address, and distribute
q)propriate notices to all affected employees on station on any given day, and plan
accordingly.
6. Appropriate plans also are needed to ensure quick receipt of notices by those employees
not at work when the furlough begins. A means of securing home addresses prior to the
furlough is needed.
7. A means of accounting for all employees fiirloughed and notified will be necessary at the
local level. All organizational units distributing notices should have persons accountable for
quickly providing information (also see INSTRUCTIONS FOR HANDLING FURLOUGH
DECISION NOTICES) of this type to the HRM Office or other designated office as
fiirloughed employees b^in departing the work site on their last work day.
8. Consistent with the type of activities/occupations and numbers of employees already
identified by organizations as excepted from shutdown and reported to OMB, confirmation of
information of this type is often requested by OMB and/or other oversight agencies, perhaps
within several hours of the begiiming of the shutdown.
139
INSTRUCTIONS FOR HANDLING FURLOUGH DECISION NOTICES
Lapse of Appropriations
1. The employee's name should be typed on the notice.
2. The Human Resources Management OfQce should complete the address for the Merit
Systems Protection Board Office havingjuiisdiction in their area, in the appropriate spaces in
the Attachment.
3. A copy of the MSPB iq)peal form should be attached to the notice and Personnel Offices
should fill in the room number where the MSPB regulations can be reviewed.
4. The employee should be given two copies of the decision letter to sign. The employee
will retain the original and the copy should be retained by the deciding official. If an
employee refuses to sign, the supervisor should document the employee's refusal on the copy.
5. NOTE: Public Law 101-376, dated August 1990, has expanded Merit Sy/stems Protection
Board Appeal rights coverage to the following two categories of excq)ted service employee:
Individual in the excq)ted service, other than preference eligibles, who have completed 2
years of current continuous service in the same or similar positions under other than a
temporary appointment limited to 2 years or less,
Individuals in the excq)ted service, other than preference eligibles, who are not serving a
probationary or trial period under an initial appointment pending conversion to the
competitive service.
This new guidance has been incorporated in the appeal right attachment of the furlough
decision notice.
6. A standard Form 8 (SF-8), Notice to Federal Employees About Unemployment Insurance,
must also be given to each employee who is to be furloughed.
140
7. Personnel Service/Divisions or supervisors should attach to the decision letter, the
appropriate appeal rights attachment based on the employee's status as follows:
Attachment A Employees who have completed a probationary or trial
period, or 1 year of continuous service in the
competitive service under other than a temporary
appointment;
Preference eligibles in the excepted service who have
completed 1 year of current continuous service in the
same or similar positions;
Individuals in the excepted service (other than a
preference eligible) who are not serving a probationary
or trial period under an initial appointment pending
conversion to the competitive service;
Individuals in the excepted service (other than a
preference eligible) who have completed 2 years of
current continuous service in the same or similar
positions under other than a temporary appointment,
limited to 2 years or less.
Senior Executive Service career employees.
Attachment B Employees in the excepted service (other than a
preference eligible) who have completed more than 1
year (but less than 2 years) of current continuous
service in the same or similar positions.
Attachment C Employees in the competitive service who have
completed a probationary or trial period, or one year
of continuous service under other than a temporary
appointment, and who are in a bargaining unit covered
by a negotiated grievance procedure.
Attachment D Employees on temporary appointments and those
serving probationary of trial periods.
141
FOHLOOOH ODIE TO ABSKNCS OF APPSOFRIATIOtlS
' (Furlough Under Adverse Actions Procedures (General) 1
This is a discussion of "shutdown" or "emergency" furloughs. In a "shutdown" furlough,
the agency no longer has the necessary funds to operate and must shut down those
activities which are not excepted by 0MB standards. In many cases, the agency will have
very little lead time to plan for the furlough, making it an "emergency" furlough. A good
example of a "shutdown" or "emergency" furlough is if there are no fiscal year 1996 funds
appropriated for an agency by October 1, 199S.
1. Q. What is a furlough?
A. A furlough is the placing of an employee in a temporary nonduty, nonpay
status because of lack of work or funds, or other nondisclplinary reasons.
For most employees. A furlough of 30 calendar days or less is covered under
5 CFR part 752, adverse action procedures.
2. Q. What can agencies do to prepare for the likelihood that there may be no
appropriations passed by the beginning of the new fiscal year?
A. 0PM recommends agencies take the following steps:
o Communicate with employees and their representatives regarding
agency plans if it becomes necessary to effect an orderly suspension of
agency operations .
o Prepare draft "emergency" furlough decision notices and plans for
distribution to employees to the extent possible within the limited time
available.
o Determine which positions are excepted under the guidelines estaiblished
by the Office of Management and Budget (OMB) . See Appendix A for
copies of OMB bulletins and memoranda.
3. Q. For furloughs necessitated by lapsed appropriations, is an agency required to
provide 30 calendar days advance written notice and an opportunity to
respond prior to Issuing a decision to furlough?
A. No. OPM's regulations provide for emergency adverse action furlough
without the necessity for advance written notice proposing the action.
Section 752.404 (d)(2) of 5 CFR provides:
The advance written notice and opportunity to answer are not
necessary for furlough without pay due to unforeseeable
circumstances, such as sudden breakdowns in equipment, acts of
God, or sudden emergencies requiring curtailment of activities.
OPM's position that this regulation applied to lapsed appropriations was
upheld by the Federal Circuit in Horner v. Andrzjewski et. al., 811 F.2d 571
(Fed. Cir. 1987). Similarly, under 5 CFR 359.806 (a), the full notice period
for career SES appointees may be shortened or waived in the event of
unforeseeable circumstances, such as sudden emergencies requiring
immediate curtailment of activities.
4. Q. In the event of lapsed appropriations, can an employee be furloughed
without first receiving a written notice of decision to furlough?
A. Yes. While an employee must ultimately receive a written notice of decision
142
^ to furlough. It is not required that such written notice be given prior to
effecting the furlough. Issuance of prior written notice is preferable, but
when prior written notice is not feasible, then any reasonable notice
(telephonic or oral) is permissible.
5. Q. What information should be Included in the notice of decision when no
advance notice is Issued?
A. The notice must specify the reason for the furlough and state that the usual
30 calendar days advance notice was not possible due to the emergency
requiring curtailment of agency operations. If some employees in a
competitive level will not be furloughed because they are performing one of
the excepted activities defined by 0MB guidelines, we recommend a
statement such as the following:
If employees are being retained in your competitive level, they are
required for orderly suspension of agency operations, or they are
performing one of the excepted activities defined by the Office of
Management and Budget.
The notice must Include a statement of applicable appeal and grievance rights.
Agencies are reminded that adverse action coverage for excepted service eiq>loyees
was substantially expanded by the Civil Service Due Process Amendments of 1990,
(P.L. 101-376). If a copy of the MSPB- appeal form is not attached to the decision
notice, the notice should include information on how to obtain a copy of the form.
6. Q. During a furlough due to an absence of appropriations, may management alternate
the employees performing excepted activities?
A. Nothing in law or regulation prohibits discontinuous furloughs, and they
have been upheld by MSPB on appeal . Moreover, discontinuous furloughs
can be advantageous to both employees and the agency by distributing the
furlough days over time, thereby minimizing the financial Impact on
employees as well as lessening disruption of agency services to the public.
In 0PM, 22 FLRA No. 29, the Federal Labor Relations Authority held that a
proposal giving the furloughed enqjloyee the right to determine whether
his/her furlough was to be continuous or discontinuous is a negotiable 7106
(b)(1) "appropriate arrangement." That decision was affirmed by the D.C.
Circuit in an unpublished opinion: 0PM v. FLRA, 829 F.2d 191 (1987).
7. Q. In addition to statutory and regulatory procedural requirements, what
additional forms of cpnimunlcatlon should an agency consider in effecting a
furlough?
A. Considering the uncertain and changing circumstances surrounding
furlough, agencies should majce efforts toward assuring that employees are
provided with up-to-date and accurate information as warranted. This may
be done through effective union-management communication, employee
briefings, periodic bulletins, newsletters or other means available to
agencies.
8. Q. How should the decision letter be framed if the agency has not set a specific
number of furlough days in the proposal?
A. While it is desirable when possible to Inform the affected employee of a
specific number of days in the decision letter, the agency needs only to set
out the maximum time that may be involved, so employees have as much
information as possible, if they choose to appeal.
143
Dnployee Coverage and Procedural Requirements
9. Q. What procedures are applicable for probationers, employees under temporary
limited appointments in the competitive service, employees who are
nonpreference eligible employees in the excepted service with less than 2
years of continuous service, and others not covered by 5 U.S.C. chapter 757
A. There are no mandated procedures; however, agencies should ensure that all
procedures required by negotiated agreements or internal personnel policies
are followed.
10. Q. What about SES appointees?
A. Furloughs of SES career appointees (other than reemployed annuitants) are
covered under S U.S.C. 3S9Sa and subpart H of S CFR part 359. The
regulations provide only for a single 30-calendar day advance written notice,
v*ich must tell the appointee: the reason for the furlough; the expected
duration of the furlough and the effective dates; the basis for selecting the
appointee when some but not all SES appointees in a given organizational
unit are being furloughed; the location where the appointee may inspect the
regulations and records pertinent to the action; the reason, if the notice
period is less than 30 calendar days; for a probationer, the effect (if any) on
the duration of the probationary period; and the appointee's appeal rights to
the MSPB, including the time limit for the appeal and the MSPB office to
which it should be sent. A career appointee may appeal a furlough of any
length. Competitive procedures are required to select career appointees for
any furlough of more than 30 calendar days (or 22 worJcdays) . An agency
may furlough an SES noncareer or limited appointee, or a reemployed
annuitant holding a career appointment, under agency designated
procedures.
11. Q. Are individuals appointed by the President subject to furlough?
A. Individuals appointed by the President, with or without Senate confirmation,
who otherwise are not subject to 5 U.S.C. 6301 and attendant regulations
governing leave in the Federal service, are not subject to furlough. The
salary of such a Presidential appointee is an obligation incurred by the year,
without consideration of hours of duty required. Thus, the Presidential
appointee cannot be placed in a nonduty, nonpay status. If a Presidential
appointee, however, chooses to be in a nonpay status, he may return part of
his salary to his employing agency, provided that the agency has authority
to accept gifts, or to the Treasury. Regardless of the Presidential appointee's
choice, his entire salary is recorded for tax purposes. The following
exception must be noted: former career SES appointees who too)c
appointments at level V of the Executive Schedule or higher and elected to
retain SES leave benefits under 5 U.S.C. 3392 (c), are subject to furlough at
the discretion of the agency.
12. Q. What about persons worlcing for Federal agencies under mobility agreements
pursuant to the Intergovernmental Personnel Act (IPA) 7
A. The specific authority for furloughing persons who are worlcing under
mobility agreements pursuant to the IPA, either inside the Federal
government or with other organizations, will depend upon the nature of
individual agreements, the status of the appointments, and/or the funding
arrangements for the assignments. As a general rule, the following
principles are applicable in determining whether to furlough personnel on
IPA mobility assignments:
o Personnel from non-Federal organizations on appointments to the
144
Federal government are subject to furlough in the same manner as other
employees .
o Personnel on detail to Federal agencies from non-Federal organizations
may continue working, provided that the non-Federal organizations pay
the total costs of the detail.
o Personnel on detail to Federal agencies from non-Federal organizations
which share part of the costs of detail may continue to work if the
Federal portion of the cost was obligated from prior appropriations at
the time of the IPA mobility agreements. In the event that a furlough
takes place in the second year of the agreement at which time no funds
are appropriated, the assignment should be terminated.
o Personnel on detail to Federal agencies from non-Federal organizations
which do not pay or share the costs of the detail are subject to furlough
in the same manner as other employees.
13. Q. Would enyloyees who are detailed or assigned outside the agency during
part, or the entire period, of furlough be sxibject to furlough?
A. Qnployees on a reimbursable detail from the agency would not be subject to
furlough due to lack of funds if full reimbursement continued. If
reimbursement were reduced or eliminated, the employee would be subject
to furlough. Agencies may prorate the required furlough time fot^ employees
being paid by the outside organization during only part of the furlough
period. Federal employees assigned to non-Federal organizations who are on
leave without pay from their Federal positions may continue working.
Qnployment during Furlough
14. Q. May employees take other jobs while on furlough?
A. Even while on furlough, an individual is an employee of the Government. Therefore,
the Executive Branch-wid standards of ethical conduct (the standards), at 5 CFR Part
2635, which Include rules on outside employment, continue to apply to employees on
furloughs. Additionally, there are statutes which prohibit certain outside
activities. Agencies also have varying supplemental rules regarding the requirement
for prior approval of outside eiq>loyment, and some prohibit certain types of outside
employment. Therefore, before engaging in outside employment, employees should
review these regulations and then consult their own agencies ethics official to
learn if there are any agency-specific supplemental rules governing the en^loyee.
Except for conflict of Interest restrictions (which preclude outside
employment in a non-government facility that contracts with a Federal
agency, and other incon^atible activities as well as those which give the
appearance thereof) or Hatch Act restrictions (which deal with political
activities of Federal employees), employees may accept employment outside
the Federal service while on furlough. Employees must obtain agency
approval of any such outside employment. Furloughed employees may,
absent any agency restrictions, accept temporary appointments with other
Federal agencies during furlough.
15. Q. What happens to employees' benefits (e.g., retirement, health benefits, life
insurance, leave) if they receive temporary appointments in another agency
while furloughed?
A. The leave should be transferred as if the employees had been transferred
(see Comp. Gen. opinion B-167975, September 1, 1970). Retirement, health
benefits, life insurance, and leave should be handled as if the employees had
145
been Cransfecred.
16. Q. May an employee volunteer to do his or her job on a nonpay basis during a
furlough period?
A. No. Unless otherwise authorized by law, an agency may not accept the
voluntary services of an individual. (31 U.S.C. 1342)
Service Credit for Various Puirposes
17. Q. Is furlough or leave without pay (LHOP) a break in service?
A. Ko, either merely places employees in a nonpay status.
16. Q. To triiat extent does nonpay status affect civil service benefits and
programs?
A. Nonpay status (which includes furlough, LWOP, absence without leave, and
suspension) is credited as follows:
o For career tenure, the first 30 calendar days of each nonpay period is
creditable service.
o For completion of probation, an aggregate of 22 wor)cdays in a
nonpay status is creditable service.
o For X-118 qualification standards, there is no requirement to extend
qualifying periods by the amount of nonpay status. However, agencies
may require such extensions in order to meet training requirements or
ability to perform.
o For tlme-in-grade requirements, nonpay status is creditable service.
o For retirement purposes, an aggregate nonpay status of 6 months in
any calendar year is creditable service. Coverage continues at no cost to
the en^loyees while in a nonpay status. When employees are in a
nonpay status for only a portion of a pay period, their contributions are
adjusted in proportion to their basic pay (5 U.S.C. 8332 and 8411) .
The exception would be an employee who had substantial time in a
nonpay status earlier in the year if the furlough causes him or her to
have more than six months time in a nonpay status during the calendar
year.
o For health benefits, enrollment continues for no more than 365 days in
a nonpay status . The nonpay status may be continuous or brolcen by
periods of less than four consecutive months in a pay status (5 CFR
890.303 (el). The government contribution continues while employees
are in a nonpay status. The employee can choose between paying the
agency directly on a current basis or having the premiums accumulate
and be withheld from his or her pay upon returning to duty.
o For life insurance, coverage continues for 12 consecutive months in a
nonpay status without cost to the employees (5 CFR 870.401 (c) ) or to
the agency (S CFR 870.401 (d) ) . The nonpay status may be continuous
or it may be bro)cen by a return to duty for periods of less than four
consecutive months .
o For wi thin-grade increases, an aggregate of 2 wor)(weeks nonpay
status in a waiting period is creditable service for advancement to steps
2, 3, and 4 of the General Schedule; four workweeks for advancement to
146
steps S, 6, and 7; and six workweeks for advancement to steps 8, 9, and
10 (S CFR 531.406 (b) ) . For prevailing rate employees (WG, HL, and
HS schedules), an aggregate of one workweek nonpay status Is
creditable service for advancement to step 2, three weeks for
advancement to step 3, and four weeks for advancement to steps 4 and 5
(5 CFR 532.417 (b) ) .
o For annual and sick leave, when an employee accumulates 80 hours of
nonpay status, his or her annual and sick leave credits are reduced by
an amount equal to the eunount of leave the employee earns during that
pay period (5 CFR 630.208) . For purposes of computing annual leave
accrual rates, creditable service is limited to an aggregate of 6 months
nonpay status in a calendar year (S U.S.C. 6303 (a) and 8332 (f)).
o For reduction in force, an aggregate of 6 months nonpay status in a
year is creditable service.
o For severance pay, nonpay status time is fully creditable for the 12-month
continuous employment period required by 5 U.S.C. 5595 (b) (1)
and 5 CFR 550.705. However, for purposes of determining service
creditable towards the computation of an employee ' s severance pay fund
under 5 U.S.C. 5595 (c) (1) and 5 CFR 550.707-708, no more than 6
months of nonpay status time per calendar year is creditable service.
(This is the same rule used in crediting nonpay status time as "service"
in determining annual leave accrual rates . )
o For the Thrift Savings Flan, agencies should refer to the Thrift
Savings Plan Bulletin for Agency TSF Representatives, No. 95-15, dated
May 12, 1995. For additional Information, the agency representative
should contact the Federal Retirement Thrift Investment Board at (202)
942-1460.
o For militarry duty or workers' compensation, nonpay status for
employees who are performing military duty or being paid workers'
compensation counts as a continuation of Federal employment for all
purposes upon the employee's return to duty.
Retirement
19. Q. When a furlough occurs during the three years of service prior to retirement,
what effect will time in a furlough status have on an employee's high-3
average?
A. Generally there will be no effect on the high-3 average unless the furlough
causes the employee to be in a nonpay status for more than 6 months during
the calendar year.
20. Q. Are the retirement rules concerning the effect of a furlough the same for
employees under the Civil Service Retirement System and the Federal
Employees Retirement System?
Q. What happens if employees cancel FEHB coverage while in a nonpay status
in order to avoid the expense?
Employees are cautioned not to cancel FEHB coverage to avoid payment of
premiums while in a nonpay or reduced-pay status. Normally, an employee
must wait for an FEHB open season to re-enroll. Further, cancellation of
FEHB coverage may affect an employee's right to carry such coverage into
147
retirement or while in receipt of workers' conpensatlon.
Holidays
22. Q. If employees are furloughed on the last workday before a holiday or the first
workday after a holiday (but not on both days), will they be paid for the
holiday?
A. Yes. The general rule is that an employee Is entitled to pay for a holiday so
long as he or she is in a pay status on either the workday preceding a
holiday or the workday following a holiday. The employee is paid for the
holiday based on the presumption that, but for the holiday, the employee
would have worked. (45 Comp. Gen. 291 (1965)) (Note: A holiday should
not be the first or last day of the period covered by a furlough.)
23. Q. If employees are furloughed on the last workday before a holiday and the
first workday after a holiday, will they be paid for the holiday?
A. No. If a furlough includes both the last workday before the holiday and the
first workday after the holiday, the employee is not entitled to pay for the
holiday because there is no longer a presumption that, but for the holiday,
the employee would have worked on that day. (See Comptroller General
opinion B-224619, August 17, 1987.)
Requests for Leave during Furlough
24. Q. If employees request annual, sick, court, military leave, or leave for bone
marrow or organ donation after receiving a notice proposing specific days of
furlough, can the requests be denied for those days that coincide with the
dates of furlough? If an agency has approved requests for these categories
of leave before Issuance of the proposed furlough notice, can the approval be
rescinded and the employees furloughed on the days that coincide with the dates
of furlough?
A. The answer to both questions is yes. If employees request leave for a day
designated as a furlough day, the agency Is not required to grant leave.
Further, if employees have been granted leave for a day subsequently designated
as a furlough day, that leave is automatically canceled because the necessity to
furlough supersedes leave rights. To avoid confusion, it is advisable to state
in the furlough notice that any annual, sick, court, military leave, or leave for
bone marrow or organ donation approved for use on the furlough days is canceled
if this is the intent of agency management. Furlough days are nonworkdays.
Annual, sick, court leave, and leave for bone marrow or organ donation cannot be
granted on a nonworkday. However, military leave must be charged on a nonworkday
when the nonworkday occurs wholly within the period of military leave for
military duty. Employees who serve as witnesses or jurors on furlough days
will retain all monies received from the court.
25. Q. May employees performing excepted activities during the period of furlough be
granted sick or annual leave?
A. 0PM says this is technically possible. All positions in VA that were determined
to be excepted were so identified because performance of those duties was vital
to continued provision or direct support of health care services and protection
of life and property. VA has no Department-wide policy covering this situation,
but granting emergency sick leave to an individual performing an excepted
activity could be done at the discretion of local management. However, granting
annual leave to an employee in a position identified as necessary to carrying
out the Department's mission should be avoided since the position was excepted on
the basis of its crltlcality to performance of mission.
II
148
' Management should bear In mind that under antl-defldency spending regulations,
funds may be expended only for approved excepted activities. Payments for annual
leave do not seem to fit this criteria.
26. Q. If an employee Is on leave under the Family and Medical Leave Act of 1993 '
(ETOA) during furlough days, do the furlough days count towards the 12-week
entitlement to FMIA leave?
A. No. Bsployee cannot take leave (either paid or unpaid) under the FMLA on days
that coincide with the dates of furlough. Therefore, the furlough days
cannot be counted towards the 12-week entitlement to EMLA leave.
Leave Without Pay (LWOP)
27. Q. If employees are on approved LWOP, can the LWOP be terminated and the
employees furloughed?
A. Yes. The LWOP can be terminated, but if there Is no expectation that the
employees may return to duty on the proposed furlough days. It Is
unnecessary to cancel the LNOP, since there is no work or funds Involved.
However, If the employees may potentially return to duty during the
approved LWOP, the agency may propose to furlough on the days of approved
LWOP and cancel the LWOP.
Continuation of Pay (COP)
26. Q. If employees are receiving COP due to job-related injuries, can the COP be
terminated or Interrupted by furlough?
A. No. According to the Department of Labor, esployees are maintained on
COP status during periods of furlough.
Injury While on Furlough or LWOP
29. Q. If employees are Injured while on furlough or LWOP, are they eligible for
workers' compensation?
A. No. Workers' compensation is paid to employees only if they are injured
while performing their duties. Employees on furlough or LWOP are not in a
duty status for this purpose.
Unemployment Compensation
30. Q. Are employees entitled to unemployment compensation while on furlough?
A. It is possible that employees may be eligible for unen^loyment
condensation, especially if they are on consecutive furlough days. State
unemployment compensation requirements differ. Agencies or employees
should submit their questions to the appropriate State office.
Documentation of Furlough
31. Q. How is time on furlough and leave without pay documented?
A. An SF-50, "Notification of Personnel Action," must be prepared for each
individual subject to furlough (or a list form of notification for a group of
employees who are to be furloughed on the same day or days each pay
period) . A return-to-duty SF-50 is necessary only for return from a
consecutive furlough, not for a return from a discontinuous furlough. (See
149
Chapters IS and 16 of The Guide to Processing Personnel Actions.)
If the specific furlough dates are knovm vrhen a 471/Furlough action is
prepared, these dates must be shovm in the remarks section of the
471/rurlough action document (SF-50, or list form) . If specific dates are not
Icnown, then agencies must prepare an 002/Correction action (SF-SO) to the
471/Furlough action (or a list form of notification fot a group of employees
similarly situated) with remarlcs documenting the total number of days or
hours of the furlough when those dates become Icnown.
When the total number of days for a 472/Furlough NTE is increased, a
772/Ext of Furlough NTE (date) must be prepared. For new calendar
periods of furlough, a new furlough action must be prepared. For all other
changes in the dates on which a furlough will occur, an 002/Correction
action must be prepared.
Agencies are reminded that for members and former members of the
uniformed services who are subject to the "pay cap' reporting procedures, a
copy of the furlough notice, and of the return to duty notice when one is
Issued, must be sent to the appropriate tiniformed service finance center
(addresses of the centers are in Chapter 6 of The Guide to Processing
Personnel Actions), since days in nonpay status will affect the person's
retirement pay. When an SF-50 or a list form of the notice is issued to
document a furlough, the copy of the notice which is sent to the pay center
must have the employee's SSN and DOB and dates of furlough added to it to
ensure proper adjustment of his/her retirement pay.
Note: When using the list form of notification in any of the instances cited above,
agencies must be aware of their obligation, under the Privacy Act, to ensure that
only identifying information pertaining to the individual employee is placed in
the Official Personnel Folder (OPF) or is shown on the copy given to the
employee. Therefore, in using the list form, all Information pertinent to other
employees must be deleted before a copy of the list form may be placed in the
OPF or distributed to the affected employees.
Labor Management Relations Implications
The following section provides general information about agency bargaining
obligations during a time of reduced budgets . Officials responsible for preparing
for furloughs, reductions in force, hiring and promotion freezes, or the li)ce,
should woric closely with the agency's labor relations staff.
Agencies should worl( with their partnership councils in planning and
implementing changes required by reduced budgets. Many of the actions
agencies may find necessary are protected by the management rights section of
the Federal Labor Relations Statute. However, this should not prevent agencies
and unions from worlcing together to meet the challenge of budget cuts with the
least possible disruption. Employees and their representatives have an
important stalce in this area and their suggestions can be valuable.
32. Q. What is an agency's obligation to bargain when it becomes necessary to
furlough employees?
A. The decision to furlough employees is a management right protected from
collective bargaining by 5 U.S.C. 7106 (a)(2)(A). However, the agency must
bargain over the impact and implementation of its decision and over
appropriate arrangements for employees affected by the furlough, unless the
matter of furloughs is already "covered by" the agreement. See, in this
connection, 47 FLRA Nos. 96, 99 and 114, and other cases in which the
Authority has applied its "covered by" doctrine to determine whether the
150
agreement pcovlslons relieve the agency of any duty to bargain on Impact
and implementation on this matter. If In doubt, prudence dictates that the
agency give adequate notice and bargain on Impact and implementation
rather than rtin the risk of being ordered to pay backpay to furloughed
employees as a remedy for coinnltting a refusal-to-bargain unfair labor
practice.
33. Q. In the event of a lapse of appropriations necessitating a "shutdown"
furlough, what is an agency's obligation to bargain?
A. Agencies still have a duty to notify the union and bargain
upon request on whatever negotiable Impact and implementation proposals
the union may submit. Because the agency must act by a date certain,
whatever bargaining that takes place must be accomplished -in the- l.ittle time
available before action is necessary. If agreement isn't reached in the time
allowed, the agency should tell the union what actions it will take. Although
the union may try to invoke the services of the Impasses Fanel, it is unlikely
that, in the drctimstances posed by this question, the Fanel will have time
to get involved. But whether or not FSIP gets involved, the agency can
justify Its actions — as FLRA put it in Treasury, 18 FLRA No. 61 — where
"consistent with the necessary functioning of the agency."
Some of the urgency could be reduced if the agency, as it approaches the
lapse of its appropriation, were to notify the union of the actions it plans to
take were certain scenarios to take place and ask the union for its views and
suggestions. That is, nothing prevents the parties from bargaining in
advance of a looming crisis so as to eliminate any need for bargaining when
the crisis actually occurs. FLRA has frequently held that there is no need to
engage in Itl bargaining on matters already "covered by" the agreement.
See the cases mentioned in answer 48.
34. Q. What steps should an agency take to meet its obligation to bargain?
A. Under the labor-management statute, the agency must give the union
"adequate" notice of its intent to furlough employees who are represented by
the union. "Adequate" is not defined and the Federal Labor Relations
Authority determines what is adequate notice based on the nature of the
action taken by the agency and amount of time it judges adequate to
bargain. These statutory notice requirements may have been augmented or
modified by any negotiated agreements.
35. Q. What are the implications if an agency furloughs employees before it gives
the union timely notice and meets its bargaining obligations?
A. It is an unfair labor practice to refuse to negotiate in good faith. If the
Federal Labor Relations Authority finds that the agency engaged in an
unfair labor practice it may order the agency to renegotiate an agreement
with retroactive effect and may require reinstatement of affected employees
with backpay.
36. Q. What is the effect of outside directives on the obligation to bargain or to
continue to abide by existing agreement provisions?
A. This depends on the nature of the outside directive. Any agreement must
conform to existing law and any laws enacted during the life of the
agreement. The FLRA has held that, in certain situations. Presidential Executive
Orders are to be considered "applicable law.' (Bureau of the Public Debt, 42 FLRA
Ho. 92 (1991)). Thus any provisions imposed by an Executive Order issued by the
President would preempt any agreement provisions or bargaining proposals. In
addition, any 0MB directive determined by the FLRA to be an "applicable law," and
151
not reversed by a court of appeals, would preempt existing contract provisions that
are contrary to the directive.
With respect to other kinds of directives, it is an unfair labor practice for an
agency "to enforce any rule or regulation . . . which is in conflict with any
collective bargaining agreement if the agreement was in effect before the
date the rule or regulation was prescribed. " This means that any 0MB
directive would not preempt existing agreement provisions. However,
because agreements must conform to Governmentwide regulations, adlrective from
0MB, or any agency, that is binding on other agencies would limit bargaining over
new agreement provisions.
Agency-wide regulations or directives do not supersede existing agreement
provisions and cannot be enforced until the agreement ^expires . Also, they do
not limit negotiations unless the agency can support a "compelling need" for
the regulations. The Authority rarely finds a compelling need for an agency-wide
regulation.
152
SUPPLEMENTAL OUEgnONS DEVELOPED BY VACO/COHRMS; 9/W9S
(Revised 9/2fi/9S)
Q. ^Vhac are the features of Unemployment Compensation for Federal Employees (UCFE):
ideral employees are covered for Unemployment Insurance (UI) under the UCFE.
x,xi The UCFE program is administered by the individual states, and the UCFE benefits are generally determined and
paid under the UI law of the Sute in which the Federal employee worked.
(2) UCFE program claims would be filed with the State agency that administers the UI program in that State.
C3) State laws provide for the payment of partial weekly amounts when individuals are employed less than full time
during a week.
(4) State laws vary but in most cases, an individual in furlough status for 1 or 2 days during a week would not be eligible
for a partial payment for that week.
(5) Individuals at grade levels of 9 step S and higher would need to be on furlough status for at lea.q 4 days per week to
receive a partial payment for the week.
(6) Most State laws provide that the first week of eligibility is a non-paid "waiting week" (e.g., DC and VA. MD has' no
waiting week) and payments would not actually start until the second week of eligibility in States with a "waiting week."
Q. When may VACO employees apply for unemployment assistance?
A. Employees may apply immediately in the District of Columbia and in Virginia; however, no benefits will be
allowed until the employee has been off the job for one week (5 work days). In Maryland, applications may he
submitted immediately, with no waiting period.
Q. Where should employees file for unemployment assistance?
A. Payment is made by the state where the work site is located, and normally employees should file in that state. If,
foi ivenience sake, filing is done in another area, the location of the work site should be noted. Rates of
ployment assistance also vary from state to state; in general, DC pays one of the higher rates of unemployment
.a nee.
Q. If unemployment benefits are paid and, at a later date. Congress determines to pay Federal employees, is there an
obligation to pay back funds to the Unemployment Office?
A. Yes, a call to the District of Columbia revealed that in cases where there has been payment and later salary
reimbursement for the same period, an employee would be in an overpayment situation. In this situation, it is recommended
that employees arrange to direct repayment to the Unemployment Office.
Q. How will time and attendance information be recorded for employees in excepted activities during the furlough?
A. During the furlough, time and attendance information will not be entered in the timekeeping sy.<;tem.<;. i.e.. OLDE or
ETA. Each organization may designate an excepted employee to keep track of time and attendance information for employees
in the excepted activitity or may instruct excepted employees to keep track of their own time and attendance information.
Once activities that were suspended due to lack of appropriation funding resume, designated timekeepers will enter time and
attendance information for employees who were excepted during the furlough.
Q. When will excepted employees receive pay for work during the furlough period?
A. Payroll processing will not occur until an appropriation or other authorization to operate is approved. Once operation
resumes, pay for excepted employees will be processed as soon as possible.
. ill fiirloughed employees receive retroactive pay for the furloughed period?
A. Although employees were compensated in the past for furloughed periods, there are no indication.': thcie provisions will
apply in this particular case. Congressional mandate-; and other legislative requirements will determine if furloughed
employees will be compensated.
153
>_. Wh«t happens to my TSP account? Can I ttill contribute? Will the VA pay into my account?
an I boROw fiom my account?
.. fiy law, employee contributions to TSP must be made through payroll deductions and must be determined by using the
'*. pay the employee earned for the pay period. Therefore, if you are in a nonpay status for one or more pay periods (that
u receive no basic pay for the pay period), you cannot contribute to your TSP account. Also, if you are a FERS
uployee and you are in a nonpay status for one or more pay periods, you will not receive VA contributions (1 %) or VA
latching contributions. (TSP Bulletin 95-15, 5/12/95)
(1) You may make intertund transfers while on furlough.
(2) You caiuiot receive a TSP loan if you are in a non-pay status.
(3) If you are in a nonpay status and have a TSP loan and your pay for any pay period is insufTtcient to cover your loan
repayment, contact the Payroll Division, 565-8403.
(4) TSP accounts can be withdrawn only if you separate from Federal service. Consequently, you cannot
withdraw your account while you are in nonpay status.
>. Can the employee share of the TSP contribution be adjusted should an employee be in a non-pay status for at
ntire pay period?
.. An employee cannot make up missed TSP contributions when he/she returns to pay status. An employee may
iiange the amount withheld only during Open Season. The next TSP Open Season is scheduled for November IS,
995 through January 31, 1996, with changes to take effect in January, 1996.
I. What happens to my health insurance while I'm on fiiriough?
I. "ou are in a nonpay status, your health insurance continues for up to 12 months. You are still re.<;ponsible for payment
f your portion of the health benefits premium. If you are in a nonpay status for one pay period. Payroll will adjust die
ealth benefits premium upon your return to a pay status.
'/W the computer system be available to excepted employees who are in the office?
». Yes. The nationwide computer system will be in operation. The Austin Help Desk will be open to as.<;i.";t with
roblems; the number is 512-326-6780. In VACO the network will be in operation and IRM staff will be available
trough the Austin Help Desk to assist with any problems.
154
\
THRIFT SAVINGS PLAN
FACT SHEET
Effect of Nonpay Status on
Thrift Savings Plan Participation
This Faa Sheet is for employees who are placed in nonpay sums (for example, furlough or
leave without pay) for one or more pay periods. It explaiiu the effea of the nonpay status
on an employee's Thrift Savings Plan (TSP) participation.
This Faa Sheet does not apply to employees who are in nonpay status performing an
assignment with a state or lo<^ government agency under the provisions of the Intergov-
ernmental Personnel Act (IPA) or to employees who are in nonpay status serving as hill-
time officers or employees of a union. IJF you are in nonpay status for one of these reasons,
see your servicing personnel office for information about your TSP participation.
Can J contribute to nr^ TSP account if I
am in nonpay status?
\y law, employee contributions to TSP accounts
.nust be made through payroll deductions and
must be detemiined by using the basic pay the
employee earned for the pay period. Conse-
quently, if you are in nonp>ay sutus for one or
more pay periods (that is, you receive no basic
pay for the pay period), you cannot contribute
to your TSP account.'
What if I am receiving workers'
compensation?
Workers' compensation benefits received from the
Department of labor's Office of Workers' Com-
pensation Programs (OWCP) are not basic pay as
defined by law. Consequently, you cannot con-
tribute to your TSP account nor can you make
loan payments while you are in nonpay status
and receiving OWCP benefits.
Witt I receive agency contributions if I
am in nonpay status?
Agency Automatic (1%) Contributions made to
the TSP accounts of employees covered by FERS'
must be determined by using the basic pay
earned by the empksyees during the pay period.
AgeiKy Matching Contributions are made to the
TSP accounts of FERS employees only if the em-
ployees make their own contributions for the pay
period. Consequendy, if you are in nonpay status
for one or more pay jjcriods, you will not receive
agency contributions for those pay periods.'
Can I make an open season election if
I am in nonpay status?
Yes. If you complete the TSP Eleaion Form
(TSP-1) and submit it to your personnel office
during the TSP of)en season, your eleaion will be
processed even though no contributions can be
made to your account while you are in nonpay
status. As soon as you return to pay status, your
TSP contributions and, if FERS, your agency con-
tributions will begin based on your most recent
TSP eleaion.
(Conilnued on page 2)
If you are in nonpay sucus lo perform military service, you
.nay be enliUed to make and receive reiroaclive TSP conuibu-
bons when you return lo pay sums. See your persoruiel office
for tTK>re information when you relurn
' FHKS refers to the Federal Employees' Reuremeni System, the
Foreign Service Pension System, and other equivalent Govem-
metM reliremeru plans.
Fetteral Retiremenl Thrift Investment Board
OC9S-<(S/9SI
155
Can I make interfutul transfers tfl am
in nonpay status?
Yes. An inierfund transfer is the movement of
some or all of your existing account balance
among the three TSP investment funds. Conse-
quently, you may make inteifiind transfers just
like employees in pay sutus.
Can I receive a TSP loan tvbile I am in
nonpay status?
Under the TSP loan program, loan payments can
be made only through paynsU deductions. Conse-
quently, if you are in nonpay status (even though
you may be receiving workers' compensation
benefits), you can not receive a"rSP'IS)in until
you return to pay status.
What iff have a TSP loan attd I am
placed in nonpay status?^
Because loan payments can only be made
through payroll deductions, you cannot make
payments while you are in nonpay status. If your
absence from duty has been approved, yon must
take one of the foUowing actions: (1) send a
copy of your SF-50, Notification of Personnel
Action, documenting your nonpay status and its
jegirming and ending date to the TSP recordkeep-
er or (2) ask an agency official (your supervisor
or your personnel or payroll office representative)
to send written notification to the TSP record-
keeper on Form TSP^l, Notification to TSP of
Nonpay Status, or agency letterhead to document
your nonpay status and its beginning and ending
dates. If your nonpay status is extended, you
must provide the TSP recordkeeper with docu-
mentation of the extension.
* Application of the njles in paragraphs two and three of this
answer may be different if you are in nonpay status to perform
mUitary service Contaa the TSP recordkeeper at (504) 25^-6000
for a
If you miss correa toan payments for less than
90 days, your loan payment schedule will be ex-
tended. However, your education, medical, or fi-
nancial hardship toan must be repaid in full by
the fifth anniversary of the loan issuance date;
your residential loan must be repaid in full by the
eighteenth anniversary of the loan issuance date.
If you carmot repay your loan within the required
time frame, you will be notified by the TSP
recordkeeper.
If your payments resume more than 90 days from
the last correa payment, but less than one year
from the start of nonpay status, you mtist ream-
onize your loan. If you do not reamonize your
loan, you will have to prepay the loan in M\ or a '
taxable distribution of the unpaid balance and
any accrued interest will be declared.
If you do not return to pay status and resume
your loan payments within one year, you will
have to prepay your loan in full by the one-year
anniversary of your nonpay status, or a taxable
distribution of the unpaid balance and any
accrued interest will be declared.
For more information about TSP loans and your
responsibilities, see the booklet. Thrift Savings
Plan Loan Program, available from your person-
nel office. Questions regarding your loan pay-
ments should be direaed to your servicing
personnel or payroll office. Questions regarding
notifications, reamortizations, or taxable distribu-
tions should be direaed to the TSP recordkeeper
at (504) 255-6000.
Can I withdraw my TSP account while
I am in nonpay status?
By law, TSP accounts can be withdrawn only
after participants separate from Federal service.
Consequently, you cannot withdraw your account
while you are in nonpay status.
156
\
Thrift Savings Plan
TSP-20-H
Hardship Loan
Application
December 1988
157
THRIFT SAVINGS PLAN
HARDSHIP LOAN APPLICATION TSP-20-H
Beginning in December 1988, ycxj may apply (or a financial hardship loan in an amount greater than $1,000. To
do so, you must use this Hardship Loan AppOcation (Form TSP-20-H). Appfications for self-certified hardship loans
of $1 ,000 (for which you may use the Loan AppTication, Form TSP-20) will be accepted only through March 31 ,
1989. TOs Hardship Loan Application, Form TSP-20-H, must be used for all financial hardship loan appfications
received after March 31 , 1989.
Information on your current financial situation (income, expenses, and financial assets) Is required to document your
finandal hardship loan application. You may qualify for a financial hardship loan if your regular monthly expenses
exceed your net monthly income (that is, your income after taxes and retirement deductions), and if you do not
have sufficient finandal assets to draw upon. You may also qualify (or a hardship loan if you fwve certain extraor-
dinary expenses Itwt you cannot cover with one month's net -income, and if you do not have sufficient financial
assets to cover the expense.
In addition to meeting the requirements for financial hardship, you must have at least $1 ,000 of your own contribu-
tiofis and associated earnings in your Thrift Savings Plan accoofit in order to otitain a toaii, and the amount of tfie
loan Is subject to limits in Federal tax law. Finally, you must meet a pay test— the amount left in your paycheck
after a loan payment is deducted must equal at least 10% of your basic pay. (See the booklet. Thrift Savings Plan
Loan Prognam.T
• This application form consists of six sections;
I. Information About You
II. Information About Your Spouse
III. Rnandal Statement
IV. Loan Request
V. Documentation Required
VI. Certification
The instnictions for all sections t)egin on the back of this page. It is very important that you read all tfw Instructions
carefijily t»efore you begin to complete this form. Please type or print your responses. Note ttiat you must sign and
date, under penalty of peijury, Section VI, Certificafion, which certifies that the information you provide is true and
complete to the best ol your knowledge.
At the end of this application, there is an optional wor1<sheet (Wori<sheet to Calculate Your Loan Amount), which
uses Kerns from Section III, Financial Statement (These items are highlighted with a ■^.) Your erigit)irity will be
calculated for you, but if you want to know before you send in your application whether you qualify for a toan in the
amount that you request (subject to the amount of your own contributions and associated eaimings and the Hmits
in Federal tax law), you can use the Worksheet to perfortn the necessary calculations. Do not submit the Worksheet
with your application.
The Thrift Savings Plan Service Office will perfonn the cakxjiations to detemiine the toan amount for wtiich you
quafify. When your application is processed, you will be sent a copy of a completed Wori<sheet eind a Loan Agree-
ment/Promissory Note in the amount you requested (or the amount you are eligible for, if it is less and you choose
to accept a lesser amount).
Please send your completed application and the required documentation to:
National Rnance Center
Thrift Savings Plan Service Office
P.O. Box 61500
New Orieans, LA 70161-1500
40-190 97 - 6
158
INSTRUCTIONS
l» 1—7: Please note that the address you provide
BIPORMATIOH on this forni will be used only to return your Loan
ABOUTYOU Agreement to you. The loan check and all other
corresponderKe regarding the loan will t>e sent to
the address on record for your Thrift Savings Plan
account. If ttie address on your last semiannual
Participant Statement is incorrect, and you tiave
not asked your agerx^y to change it, please notify
your agerx^ personnel or payroll office imme-
diately to ensure that ttie correct address is pro-
vided to the Thrift Savings Plan.
8: Daytime Phone (area code and phone
numtjet). If you have an FTS number, write "FTS"
In the area code field and the RS phone number
in the number fieW (e.g.. (FTS) 555-1234).
S: Do you have a dual appointment? If you
work at two Federal Government jobs, this informa-
tion may affect tfie processing of your kian.
1 0: Pay Schedule. Your pay sctiedule is used to
compute ttie ariKXJnt of your loan payments. If you
have a dual appointment, you should ctieck ttie
pay schedule for the payroll office ttiat you want
to tiandle your loan payments.
Ill 11: Are you married (even tf separated from
INFORMATION your spouse)? ff you are married, even if sepa-
ABOUTYOUR rated from your spouse, you must check the "Yes"
SPOUSE box and complete ttie rest of tfiis section.
17: NotHication or consent of spouse not
possible. There is a requirement tfiat your spouse
be notified of your loan application if you are
covered by ttie C^ivil Service Retirement System
(CSRS), or equivalent retirement plan, or give
consent to your kjan if you are covered try the
Federal Enptoyees' Retirement System (FERS), or
equivalent retirement plan. If your spouse's wtiere-
atxxitsare unknown to you, or if you are covered
by FERS and exceptional circumstances make it
inappropriate to secure your spouse's consent,
we will send you Form TSP-1 6, Request for Waiver.
Ill» Complete each iterrv rounding to ttie nearest
FINANCIAL dollar. II your income, deductions, expenses, or
STATEMENT assets for a particular item are 0, enter 0.
This form requests information on you. your
spouse, and dependents. Dependents are de-
fined as individuals wliom you can dalm as de-
pendents lor Federal income tax purposes at ttie
time you apply for ttie loan.
If you are manried and not separated, report
income, expenses, and assets for tioth you and
your spouse. If information cannot be assigned to
you or your spouse individually, enter the total
only. II you and your spouse are separated, report
only your own income, expenses, and assets.
You must provide monttily income and expense
figures to apply for a hardship loan:
■ If you are paid monthly (12 times a year), you
can take your salary or wages, tax withholding,
FICA (Social Security)/h/ledicare deduction,
and bther retirement deductions directly from
your current earnings and leave statement
■ II you are paid semimonthly (24 times a year),
add the amounts from your last two earnings
and leave statements.
■ II you are paid biweekly (26 times a year),
multiply the biweekly amounts on your current
earnings and leave statement by 26 and divide
by 12
■ If you are paid weekly (52 times a year), multiply
the weekly arrxxjnt from your txjrrent earnings
and leave statement by 52 and divide by 12
■ II your monthly amounts fluctuate due. lor
example, to variations in numtser ol hours
worked and/or fiourly rates ol pay, total your
actual monthly amounts for income and deduc
lions lor the last three months and divide by 3
■ fx)r ottier income, deductions. arxJ expenses
that are not received or paid monttily. be sure
to calculate ttie monthly amount, e.g.. divide a
quarterly payment tiy 3.
1 8: FAMILY SIZE Family size includes you. you'
spouse, and your dependents. If you are sepa-
rated or divorced, it includes you and your depen-
dents only if your dependents are living with you.
II your deperidents are living elsewfiere and you
conlritxjte to tfieir support do not include ttiem in
family size txrt include in Item 37 the amount of
suppiDrt you pay II children you cannot claim as
dependents are living with you and you receive
support lor them. Include them in family size and
enter the amount of support you receive In Item 21 .
MONTHLY INCOME
19: Monthly Gross Salary or Wages. Enter
current monthly salary or wages (or enter average
lor the last three months and ctieck the tiox). Enter
income from all jobs if more ttian one job is field.
20: Monthly Dividends and/or Interest Total
your annual dividends and interest from the assets
listed In Items 42-52 and divide by 12
21: Monthly Alimony, Maintenance, and/or
Child Support Enter the amount ol alimony,
maintenance, and/or child support received each
month If payments are Irregular, enter the average
ol the last three months.
22: Other Monthly Income. Descritie and enter
other monthly cash Income. Include royalties and
net income Irom real estate Investments and a
lamlly business (I e . monthly cash Income minus
monthly cash outlays) II net income is negative,
enter a minus sign and remember to subtract it
when you total your income in Item 23.
23: Total Monthly Income. Add all the entries in
159
THRIFT SAVINGS PLAN
HARDSHIP LOAN APPLICATION TSP-20-H
I.
inpormahon
about you
1. Name.
2. Date of Birth /" / 3. Social Security Numt>er —___—_
Mo* Day Year
4. Street Address
5. C3ty 6. State 7. Zip Code.
8. Daytime Phone (area code and number) ( ) — _: -
9. Do you have a dual appointment? D Yes O No
10. PaySchedule (check box thai indicales when you are paid):
D Weekly D Semimoothty (Vice <n each cafendarmon/h,
D BiweetdyCeve/y'vw weeks. 24 times a year)
26 times a year) D Mortiii(orKeir\ each calendar rmnth)
D Other (specify)
lla 11. Are you mamedfeventfseparafed from your spousej? D Yes ' D No
^FORMATION n yes, please give the r)ame and address of your spouse:
ABOUTYOUR
SPOUSE 12. Name
Lki Fnl
13. Street Address
14. CSty 15. State 16. Zip Code.
III.
FINANCIAL
STATEMENT
17. D Check here if you do not know where your spouse is <CSRS or fiEflS; or if exceptional
circumstances make it impossible to otitain your spouse's consent for your toan (FERS only).
18. FAMILY SIZE as defined in the instructions.
CMrehjtir bekye you beff^
tfiis teaion. Be surv ro
MONTHLY INCOME
19. Monthly Gross Salary or Wages
''™*^"""i^SC^ Q Check here if you are using a three-month average
20. Monthly Dividends and/or Interest
21. Monthly Allrtxxiy, Maintenance, and/or ChikJ Support
22. Other Monthly Income
23. Total Monthly Income
YOUR
SPOUSE
TOTAL
.00
.00
_
.00
.00
_
.00
_
.00
.00
160
INSTRUCTIONS Continued
MONTHLY MCOME TAX AND
RETmEMBrr DBHJCnONS
24-26: Monthly Federal, State, and Ijocal
Income Tax WHtUioldlng. Enter the amount o(
moottily tax wittiholding fcx each.
27: Monthly Payments of Estimated Taxes on
Income. If you make estimated tax payments on
your income, calculate the amount you are paying
monttily.
28: Monthly RCA (Social Security)/Medicare
Deduction. If you or your spouse fiave more ttian
one job. be sure to include ttie RCA (Social
SecurityVMedicare deduction for ttiat other job
also.
29: Other Monthly Retirement Deductions.
These dedudioos do not include contritx/tions to
an Individual Retirement Account (IFtA).
■ If ttie retirement plan Is FERS or a FE(^ equiva-
lent plan, enter the amount of salary or wages
that is withheld for the FEPS Basic Benefit
annuity.
■ It the retirement plan is CSFtS or a CSRS equiva-
lent plan, enter the amount of salary or wages
that is withheld for the CSRS annuity.
■ Enter the amount of your own contritxjtion to the
thrift Savings Plan (TSP) and. if applicable,
your spouse's own contribution to the TSP.
■ If you or your spouse tiave more than one job.
enter the amount ttie ottier employer withholds
each month for the retirement plan of the other
job.
30: Total Monthly Income Tax and Retirement
Deductions. Add all the entries in ttie Total column
lor Items 24 through 29.
31: TOTAL MONTHLY INCOME NET OF TAX
AND RETIREMENT DEDUCTIONS. Subtract the
Total Monthly Income Tax and Retirement Deduc-
tions in Item 30 from the Total Monthly Income in
Item 23.
MONTHLY SCHEDULED
HOUSEHOLD EXPENSES
32: Monthly Household Rental or Mortgage
Payment Enter your monthly rental payment or. if
applicable, your monthly mortgage payment on
your primary residence II real estate taxes and
txxneowner's insurance are included in your
payment, include them tiere and enter 0 in Items
33 and 34. If additional mortgages are outstanding
on your primary residence, include the monthly
payment on them as well. II you have a TSP loan
for purchase of a primary residence, include the
nxjnthly payment lor ttial loan also.
33: Monthly Household Real Estate Tax. If you
pay your real estate tax separately from your
mortgage payment, enter an anxxjnt representing
one rrvxith's real estate tax lor your primary resi-
dence
34: Monthly Household Homeowner's Insur-
ance. II you pay your homeowner's insurance
enter an amount representing one rrxxith's home-
owner's insurance payment (or your primaty
residence.
35: Monthly Household Utilities. Bgure your
total payments for utilities (for example, gas,
electric, telephone, and water bills) over tt>e last
12 mcnttis and divide by 12. Do not duplicate any
items that are included in your monttily rental.
36: Monthly Household Dependent Care.
Enter ttie amount you pay each month (or care for
your spouse, a dependent child, or a dependent
adult who cannot iDe left alone while other adults
are at worit
37: Monthly Expense for Alimony, Mainte-
nance, and/or ChOd Support. Enter the amount
paid each month in alimony, maintenance, and/or
child support.
38: Monthly Loan Payments. Describe and
enter monthly payments (or installment loans
with set monthly payments ((or example, auto-
mobile and unsecured personal loans). Do not
include payments (or credit card purchases. Do
not include payments (or TSP loans (or educa-
tion, medical, or hardship purposes.
39: Total Montiiiy Scheduled Household
Expenses. Add all the entries in Items 32
through 38.
40: EXTRAORDINARY EXPENSE Enter the
total amount of tfie expense in Item 40. An
extraordinary expense is defined as one of the
following:
■ The cost of household improvements or
household help required due to illness of or
accident to you, your spouse, or your depen-
dents that:
— is not yet paid for.
— was incurred no more than 12 months
ago or will be incurred over no more than
the next 12 months.
— is not eligible lor deduction as a medical "
expense for Federal income tax purposes
(expenses deductible as medical
expenses qualify tor a TSP medical loan
and should not be entered here), and
— is not covered by insurance.
"Household Improvements" are changes to
your living quarters or the installation of spe-
cial equipment which is necessary to accom-
modate the circumstances of the incapaci-
tated person. "Household help" is the service
ol a person wfio is hired to do housework that
the incapacitated person cannot perform
■ Uninsured personal casualty loss within the
last 12 months that would be eligible for
deduction lor Federal income lax purposes.
This is sudden property loss resulting Irom
damage or destmction by (ire. storm, or other
casualty, or due to theft of property
■ Unpaid legal costs associated with a separa-
tion or divorce that were incurred no more
than 12 months ago or will be incurred over
161
Dale o( Birth:
Social Security Number
MONTHLY INCOME TAX
AND RETIREMENT DEDUCTIONS
24. Monthly Federal Income Tax Withholding
25. Monthly State Income Tax Withholding
26. Monthly Local Income Tax Withholding
27. Monthly Payments of Estimated Taxes on Income
■ Federal
■ State
■ Local
28. Monthly FICA (Social Security)/Medicare Deduction
29. Other Monthly Retirement Deductions
■ FERS or FERS Equivalent Basic Benefit Anrwity.
■ CSRS or CSRS Equivalent Annuity
■ TSP Contributions
■ Ottier
30. Total Monthly Income Tax and Retirement Deductions
31. TOTAL MONTHLY INCOME NET OF TAX AND
RETIREMBIT DEDUCTIONS (Item 23 minus hem 30)
YOU
YOUR
SPOUSE
TOTAL
.00
_
.00
_
.00
.00
_
.00
^
.00
_
.00
.00
_
.00
^
.00
_
.00
.00
.00
MONTHLY SCHEDULED HOUSEHOLD EXPENSES
3Z Monthly Household Rental or Mortgage Payment
33. MonthlyHousehokJFtealEstateTaxYJfpa/dseparafeiyfromrenra/ormortgagej
34. Monthly Household Homeowner's Insurance fifpaid separately from rental or mortgage)
35. Monthly Household Utilities (it paid separately from rental)
36. Monthly Household DeperxJent Care
37. Monthly Expense for ATimony, Maintenance, arxj/or Child Support
38. Monthly Loan Payments
39. Total Monthly Scheduled Household Expenses
40. EXTRAORDINARY EXPENSE as defined in the instructions.
Check the expense(s) you have:
D Household help/improvements
D Uninsured casualty loss
D Legal expenses for separation/divorce
162
INSTRUCTIONS Continued
FINANCIAL ASSETS
Rnanctal assets are cash or other assets that
are readily converted to cash. If you do not know
the precise anvxint of an asset, estinnate the
amount t>ased on the balance at the end of the
last period (or which you tiave a statement and
any changes since Uien. Do not include your
Individual Retirement Account (IRA) if you have
one. Do not list any non-liquid asset (for exam-
ple, jewelry, your car, or your residence) or any
asset tfiat is used as collateral for a debt.
41—45: Enter the face value of the specified
assets.
46—50: Enter the current mar1<et or redemp-
tion value of the specified assets.
51i LHe Insurance. Enter the cash value of
universal or wtiole life insurance pwlicies.
52: Other Financial Assets. List and enter the
value of other finarxyal assets you may have.
53: Total Rnandal Assets. Add the entries in
Items 41 through 52.
I V« 54: Amount of Loan You Are Requesting.
LOAN You may fXJt borrow more ttian the amount of
REQUEST your contritxitions to the TSP and the earnings .
on your contriljutions. You may not twrrow less
than $1 .000. To figure the maximum amount you
can txxrow (subject to the amount of your own
contritHJtions and associated earnings in your
TSP account, ttie limits in Federal tax law. and
the (jay test), you may use the attached Work-
sfieet. (Do not sutxnit the Worteheet with your
application.) The maximum amount you qualify
for will \x calculated for you based on the infor-
mation you provide, whether you complete the
Wort«heet or rx)t.
55: Requested Amount Too Large. If the
anxKint you request is more than the amount for
wtiich you qualify, indicate whether you want to
apply for the maximum amount that is available
to you. You will be notified whetfier you are
eligible (or the kan amount you request.
56: Amount of Time to Repay. l=or a loan for
financial hardship, you have tjetween one and
four years to repay
We l^ake sure you have attached a copy of your
OCUMENTATION cunent earnings and leave statement. Your state-
REQUIREO ment will be used to verify that the anxxjnt left in
your paycheck after a loan payment is deducted
will equal at least 10% of your tiasic pay
V l« Read the certification, sign your name, and enter
CERTIHCATiON the date you signed the form.
163
Don't forget to:
■ Enclose a copy of your current
earnings and leave statement
■ Sign and date your application
(Section VI)
■
Keep a copy of your application
for your records
164
Oat0O(6i(1h:
Social Security Nucrtber.
RNANCUU. ASSETS
41. CashonHand
42. Checking Aaxxjnts
43. Savings Accounts
44. Money Mari<el Funds
45. Ceitificates of Deposit
46. Stocks
47. Cotporate Notes and Bonds
48. U.S. Savings Bonds
49. Other U.S. Government, Federal Agency, State, or
Municipal Securities
50. Mutual Funds
51. Life Insurance
52. Other Finanaal Assets
S3. Total Financial Assets
YOUR
SPOUSE
TOTAL
.00
„
.00
_
.00
_
.00
_
.00
_
.00
_
.00
_
.00
.00
_
.00
_
.00
=
.00
_
.00
_
.00
.00
IV» 54. Amount of loan you are requesting
^jAN 55. If the amount you are requesting is more than the
maximum you can obtain, do you wish to tx>rrow the
maximum availatile to you?
5 Mam^^MliSi^ 56. Amountof time to repay
kMnyoucanobain
REQUEST
D Yes D No
year(s) and _
_nxxith(s)
DOCUMENTATION
REQUIRED
Attach a copy of a current earnings and leave statement.
W l» I certify, under penalty of perjury, that Itie information in this Hardship Loan Application is true and
CERTIFICATION complete to tfie t)est of my knowledge. Warning: Any intentional false statement in this application or
willful misrepresentatton concerning it is a violation ol the law and is punishable by a fine of as much as
$10,000 or imprisonment for as long as five years, or both.
Signature.
Date.
PRIVACY ACT
NOTICE
We ve auOvxaed to request Ihts anlotmai«n unoet Trite 5 U S CocJe Chapiet 84 fedeiai Employees' Retiremeni System. Sut>chapte( IM
T>Miti Savings Plan ExecuUve Oder 9397 authoiaes us to ask (or yout sooai socunly nfrbet. »*icJi w* be used to K*ertj(y your account We wiii
use the nkxmatcn you g<ve us to process your ban applcalcri TNs ntormalcn may tx shared wttx other Federal a^eroes n order to
adrrw^er your account or lor statisicai. audrtng or arctwtng purposes It may also be shared wrih Federal, state, and local ageocies lo
delermme tsenefrts ixtder the* programs lo obta*i»iJormal«in necessary uncJer th« program, or lo report ncome lor lax purposes tnaddrton
vte may sf«re this ntormaicn wdh the Parent Locata Service Department d HeaHh and Human Servces. (or the purpose o< en(ofC"Tg chdc
support obfcgatois aga«si the ISP partopa^t We may s*«ic lh«s Mitormaicn ¥rtth taw enkxcemenl agerxaes when they are tr^vcatoalBTg a
volatKXi o( ovi or cr*T«r\ai law V'te may grwe ttKS ailurmatcn to Itrxanoal nstduicr^. private sector audit (irrrts. annuly vendors, current spouses
arx] 10 a i»T«ed extern benefoar^s ana former spouses realty, (h^rtormaion nay also be (*sc*Bed toothers on your wmien request While
the law does not requ^e you to gtve ar»y ol the rtorrrwicn teqoesled on this kxm, « may not be possible lo process your appK:at<in A you do noi
gtve us ttos nlorTTuton
Please send your completed application and the required documentation to:
National Finance Center
Thrift Savings Plan Service Office
P.O. Box 61500
New Orleans, LA 701 61 -1 500
165
WORKSHEET to calculate your loan amount
The toOowing Worksheet will help you calculale the ban amount tor which you qualify, sutjject to the amount of your own cxmbixiOons
and associated earnings In your TSP aaxxjnt end to ttie (mtts set in Federal tax law (see the txxjMel, Thrift Savings Plan Loan
Pix>gramO. H the result In Item S of the Worksheet Is $1 ,0(M or tnore, you quaTrfy kv a financial hardship loan In that anK)unt, Eut^^
to the trnits rrieritioned atxive arid the requkertient ttul the arnount left In your paycheck after your k>an paymerit, payroll allotmerits,
and ottier tleductions win equal at least 10% of your tjaslc pay. You do not need (o complele this Wotksheet uriess you want to
krxiw the maximum amount you can txinow before you apply (or a loan.
TO DETERMINE IF YOUR REGULAR EXPENSES EXCEED YOUR NET MONTHLY INCOME:
A. Total Monthly Scheduled Household Expertses: Item 39 In the Financial Statement
B. Alkiwance lor Ordinary Monthly Recurring Expenses:
A set amount is allowed for ordinary monthly recurririg
expense items, kx example, food, clothing, househokj
operations, enlertainrrienl. education, health care, and
ottier miscellaneous expenses. Tfiat amount is deter-
mined t3y a factor tiased on your monthly income and
your family size.
In tfie left-hand column of the adjacerit table, find Ifie
nxxithly income range Itial matches your Total Monthly
Income (Item 23 in the Rnandal Statement). Go across Multiply the lackx from this table t>y the amount of your
that tne to fmd the laclor that applies to you on the tiasis Total Monthly Income Net of Tax and Retiremert Deduc-
o( your family size (Item 18 in the financial Statement). tions (Item 31 in the Financial Statement), and enter the
(These factors are derived from data from the U.S. answer. Round to the nearest whole dollar.
Bureau ol Labor Statistics.) _
A
Total
Monthly Income
1or2
Family Stas
3or4 SornHHC
Less than $1,250
.75
.90
50
$1^50-1,666
.65
.75
.75
$1,667-2,499
.60
.65
.65
$2,500-3532
.SO
£5
,60
$3,333 +
.45
.45
,50
C. Total Monthly Regular Household Expenses: Item A phis Item B.
D. Total Monthly Income Net of Tax and Retirement Deductions:
Item 31 in the Financial Statement
E. Kern C minus Item D: II Item C is less than Item O, enter 0.
F. Hem E times 12: 12 ■
Heme
C7 TO DETERMINE IF YOUR EXTTIAORDINARY EXPENSE EXCEEDS YOUR
NET MONTHLY INCOME:
G. Total Monthly Regular Household Expenses: Item C.
H. Extraordinary Expense: Item 40 in the Financial Statement
I. Item G plus Item H.
J. Total Monthly Income Net of Tax and Retirement Deductions:
Item 31 in the Financial Statement.
K. Item I minus Item J : If Item I is less than Item J, enter 0.
L. The smaller of Item H or Item K.
icr TO CALCULATE THE HNANCIAL ASSETS YOU HAVE TO DRAW UPON:
M. Total Rnandal Assets: Item S3 in the Financial Statement.
N. Financial Reserve: Item D limes 6. 6 x
llemO
O. Item M minus Item N: II Item M is less than Item N, enter 0
O- TO CALCULATE THE MAXIMUM LOAN YOU MAY OBTAIN:
P. Amount by which a year's regular expenses exceed net Income: Item F.
Q. Amount of the defined extraordinary expense that cannot be covered by one month's
net Income: Item L.
R. Amount of financial assets considered available to meet your need: Item 0.
S. Item P plus Item Q minus Item R. This Is the amount of the hardship loan for which
you qualify (subject to the limits mentioned above).
166
November 22, 1995 ^ ^
Director, Central Office Hirnian Resources Management Service (055)
Pay and Leave Treatment of Employees Affected by the Lapse |n Appropriations
Human Resources Management Liaisons
1. Attached is guidance from the-Office of Personnel Management dated
November 21, 1995, that provides information regarding pay, leave, and
documentation of personnel actions.
2. Also attached are timekeeping instructions in the form of Questions and Answers.
Please note that tiiese timekeeping iitstructions will also be issued to timekeepers by
the Central Office (CO) Finance Service.
3. OPM's guidance should answer most of the questions necessary in order to ensure
timely pajTwll processing. While we anticipate that there will be other questions,
those will be addressed separately since we wanted to get this information out to you
as soon as possible.
4. Questions regarding leave may be referred to a representative of Central Office
Himian Resources Management Service on 565-8687. Questions regarding
timekeeping may be referred to CO Finance Service on 565-8403.
George W. Williams
Attachments
TIME AND ATTENDANCE Q&As
1. How will absences be recorded for the period of November 14
through November 19?
A. Except as noted below, absences occurring during the lapse
in appropriation period will be recorded on the Time and
Attendance Report as "Authorized Absence". This provision
applies to employees who were initially given furlough notices
as well as essential/excepted employees who were permitted
periods of absence during the furlough. (See exceptions below
for employees on approved Office of Workers' Compensation
Program (OWCP) status or continuation of pay (COP).)
167
Kote: En^loyees who were on approved leave on Hovember 14,
1995, must be charged leave for the approximate period of time
from the beginning of their tour to the time other similarly
situated en^loyees departed work after receiving furlough
notices. Each organization roust determine the approximate
period of leave charge for affected employees.
2. How will absences be recorded for employees on approved
OWCP?
A. Employees on annual or sick leave as a result of an approved
OWCP case will continue to be charged annual or sick leave as
appropriate during the furlough period. These employees may
elect to buy back the leave in same manner as is if there was no
furlough .
3. How will absences be recorded for employees in a COP status?
A. Eii^>loyees on COP will continue in a COP status. Absences
during the November 14-19 period do not serve to extend the 45-
day period of entitlement.
4. How will absences be recorded for employees on LWOP or AWOL
status?
A. Employees in a LWOP/AWOL status immediately prior to
November 14 and immediately after November 19 will be considered
in a LWOP/AWOL status during the furlough period. For enployees
who were on LWOP or AWOL status either before or after the
furlough period, supervisors roust roake a determination on the
amount of LWOP to be charged.
168
Page 2,
5. How will absences be recorded for employees on court leave
or military Leave?
A. Enployees on court or military leave will be recorded as
"Authorized Absence."
6. Should compressed work schedules be changed for employees
placed in a furlough status?
A. Compressed work schedules will not be changed.
7. How is "use or lose" annual leave that was scheduled but not
charged for the period of November 14 through November 19
affected?
A. *Use or lose" leave scheduled but not used due to absences
resulting from furlough notices may be restored if appropriate
authority determines that the employee was prevented from using
the leave due to an "exigency of the public [service] , namely,
the need to furlough en^loyees due to lack of work funds".
NOTE: Enployees should stu.ll be make every effort to schedule
*use or lose" leave before the end of the leiave year.
8. How is compensatory time that was scheduled but not charged
for the period of November 14 through November 19 affected?
A. Payment to FLSA exempt enployees for lost conpensatory time
may be made if the overtime approving official provides a
written statement that the employee's failure to use the
compensatory time was the result of exigency of public service.
Payment to FLSA non-exempt employees will be automatically made
by the payroll office for any forfeited compensatory time. (See
MP-6 Part V Supp 2.2 Paragraph 105.05)
9. How is employee's pay affected.
A. Employees absent due to the lapse in appropriation must
receive the same pay they would have received had they actually
worked. This includes regularly scheduled overtime, night
differential and any other premium pay, allowances or
differentials the employee would have otherwise received.
169
November 21, 1995
MEHORAKDDM FOR DIRECTORS OF PERSONNEL (CFH-9S-8)
FROM: M.LAN D. HEUERMAN
ASSOCIATE DIRECTOR
FOR HUMAN RESOURCES SYSTEMS
SUBJECT: Pay and Leave Treatment of Employees Affected by
the Lapse in Appropriations;- Documentation of
Personnel Actions
Congress has passed and the President has signed legislation
providing as follows:
Any Federal employees furloughed as a result of a lapse
in appropriations, if any, after midnight November 13,
1995, vmtil the enactment of this Act shall be
compensated at their standard rate of compensation for
the period during which there was a lapse in
appropriations .
The purpose of this legislation is to make Federal employees
whole by ensuring that they receive their "standard rate of
compensation" for the entire period of the lapse in
appropriations. With regard to persons who would have been
in a previously approved paid leave status if the lapse in
appropriations had not occurred, the policy set forth below
is consistent with the instructions provided to agencies on
November 17, 1995. These instructions were based on the
premise that, during the lapse in appropriations, employees
must be (1) at work performing excepted activities, or (2)
furloughed, and that they cannot therefore be in a paid
leave status during that period. Such employees must
receive the same pay they would have received for an
equivalent period of work performed for the agency, without
regard to any previously approved paid leave.
The following guidance has been prepared by the Office of
Personnel Management in consultation with the Office of
Management and Budget. As used below, the term "excepted
employees" refers to employees who were excepted from a
furlough because they were performing functions related to
national security, protection of life or property, or the
orderly suspension of agency operations.
170
Pay
For periods of time during which employees were furloughed,
they must receive the same pay they would have received for
an equivalent amount of work performed for the agency.
Therefore —
* Employees are entitled to receive their rate of basic pay
for all periods of time during which they would have
been in a pay status but for the furlough;
* Employees who were regularly scheduled to perform
overtime work or to perform work at night or during a
period for which any other form of premium pay would
otherwise be payable are entitled to receive overtime
pay, night pay, or other premium pay as if the work had
actually been performed;
* The hours of duty during which employees were fxirloughed
(including regularly scheduled overtime hours and
standby duty) must be considered "hours of work" for
pay administration purposes under the Fair Labor
Standards Act; and
* Allowances, differentials, and other payments must be
paid as if the employee actually continued to work.
Excused Absences and Charges to Leave
* Except as provided below, absences resulting from the
furlough of employees during the lapse in
appropriations must be recorded as excused absences and
may not be charged to any form of paid leave (i.e.,
annual leave, sick leave, or other paid leave) ,
compensatory time off, or credit hours under a flexible
work schedule.
* In the case of employees who were on approved leave
without pay during the lapse in appropriations,
absences during the lapse in appropriations must
continue to be charged to leave without pay for the
duration of the period of approved leave without pay.
* In the case of employees who were on approved paid leave
(or compensatory time off or credit hours) on November
14, leave (or compensatory time off or credit hours)
should be charged only for the approximate period of
time from the beginning of each individual employee's
normal workday until the time other similarly situated
employees departed from work after receiving furlough
notices. The remaining period of time in the
employee's regularly scheduled tour of duty must be
recorded as an excused absence.
171
"Use or Lose" Annual Leave
* Employees and agencies should nedce every effort to
schedule, within the time limits specified by
regulation, any additional "use or lose" emnual leave
now made available to a furloughed employee because
previously approved annual leave was canceled during
the lapse in appropriations. If, however, the employee
is unable to reschedule such annual leave and it is
forfeited at the end of the leave year, the «ano\int of
annual leave that was canceled during the lapse in
appropriations may be considered for restoration under
5 CFR 630.308.
Alternative Worlc Schedules (AWS)
* Each agency should have a policy specifying when flexible
work schedules must be established and may be changed.
Normally, such schedules are established in advance of
the pay period involved. Under such a policy, an AWS
nonworkday scheduled to occur during a lapse in
appropriations should not be changed after the pay
period begins.
Docvuaentation of Personnel Actions
* Agencies should not process SF 50 's to document a
furlough resulting from the lapse in appropriations on
November 14 , and SF 50 • s that were processed must be
canceled using Nature of Action Code "001." Do not
record the furlough with any document designated for
long-term filing in the Official Personnel Folder.
* Agencies need not provide a furlough notice to an
employee who did not receive a notice during the lapse
in appropriations.
172
Cotrrnmriil of Ihr Oialrirl of Columbia ^^^^^ Or|Mirtiiirnl of Ein|ilo«iiirn) S«rWcn
• SOO C Sirctt. N.W. • Wishiogton. D.C 20001
OFFICE OF UNEMPLOYMENT COMPENSATION
IMPORTAMT MOTICE
TO ALL FEDERAL EMPLOYEES ZN THE DISTRICT OF COLUMBIA:
You can file for unemployment insurance benefits if you are
furloughed on or after November 13, 1995, due to the absence of a
FY 1996 Appropriations or Continuing Resolution. If you are
unemployed as the result of a government wide or agency wide shut
down and want to file, please complete the 'Initial Claim For
Furloughed Federal Government Employees" form provided with this
letter to you by your personnel authority and return to the
designated staff of your personnel office. This form must also be
completed by your personnel office.
Your claim will be processed upon receipt of your claim form from
your agency if the furlough lasts more than one week. After
processing, you will be mailed your first biweekly payorder card
along with instructions and other information about your claim. The
effective date of your claim will be the first day that the
furlough begins. The District of Columbia has a one-week waiting
period.
YOU MAY WOT OSE THIS PROCESS FOR THE FILING OF AHY ONEMPLOYMENT
CLAIM EXCEPT FOR A CLAIM RESULTING FROM A GOVERNMENT WIDE OR AGENCY
WIDE FURLOUGH. Unemployment claims resulting from agency
downsizing and/or normal terminations will continue to be taken
using the regular in-person claim taking process.
IF YOU ARE PAID RETROACTIVELY FOR THE FURLOUGH PERIOD, YOU WILL BE
REQUIRED TO PAY BACK ANY UNEMPLOYMENT INSURANCE BENEFITS YOU
RECEIVED.
JOBi
SERVICE g^ "HelpiDg People Help ThemMlvef"
173
Covernmrul of ttxr OUtricI of CoIumbU
Orparlmrni of Eai|iloriiinil SrrtlcM
SCO C Sjrert, N.W.
Wuhinpon. D.C 20001
IMSTROCTIONS FOR COMPLETIHG AMD FILING A FEDERAL FURLOUGH CLAIM
The Federal employing agency must complete an INITIAL CLAIM FOR
FDRLOUGHED FEDERAL GOVERNMENT EMPLOYEES for each affected employee
and returned the forms with documentation to" the District of
Columbia Department of. Employment Services for processing. These
forms should be completed and returned within 7 days of the date
the furlough begins to the address below. A copy should be retained
by the Federal Agency and a copy given to the Federal Employee.
O. C. DEPARTMENT OF EMPLOYMENT SERVICES (DCDOES)
OFFICE OF UNEMPLOYMENT COMPENSATION
SOO C Street, Room S17
WASHINGTON, D. C. 20001
Items 1 through 20:
Please have furloughee print clearly when
answering these questions.
Item 1. Print Last Name, First Name, Middle Initial
( including Jr, Sr, II, etc. following Last Name
Item 2. Enter Social Security Number)
Item 3. Print Street Address ( Do not abbreviate and include
apartment number if applicable)
Item 4 . Print city ( Do not abbreviate)
Item 5. Print state
Item 6. Enter zip code
Item 7. Indicate sex with a "X" in the appropriate box
Item 8. Enter number of completed years (High School -12, College
Degree, BS or BA - 16, Master Degree - 18, PH-D - 19)
Item 9. Enter Marital Status
Item 10. Enter Date of Birth (Month, Day, Year)
Item 11. Enter Ethnic Group (White, Hispanic, Black, Indian, other)
Item 12. Enter Union Status (union or non-union)
Item 13. Enter telephone number ( Include area code)
Item 14. Duty station address (city and state)
Duty station should be recorded as shown on personnel
document for your agency.
Item 15. Enter Employer's mailing address ( Use address where
finance office is located)
Item 16. Enter dates of most recent employment
JOB
SERVICE
"Helping People Help TbemMlvet"
174
Item 17. Indicate unemployment compensation status with 'X"
Item 18. Enter citizenship status (If an alien, indicate green
card alien registration number.
Item 19. Indicate Retirement status with a *X*.
Item 20. Indicate whether worked for Federal Governnent in past 30
days with a 'X".
Items 21 through 26: Leave blank: To be completed by DCDOES Staff
only.
Items 27 through 30, please print clearly when furnishing this
information.
Item 27. Preprinted.
Item 28. Enter all gross wages information in federal civilian
service amounts and the account number.
Item 29. Attach documentary proof showing federal civilian
employment. (Federal Agency letterhead notice or the SF-6)
Item 30. Already preprinted
Item 3.1: Please have furloughee sign.
Item 32: Please have Agency Representative sign. This form is not
complete unless it is signed and dated. Please enter
signer's title and telephone number.
The claim form must be sicmed by both the eiaploYee and an
authorized agency representative.
175
Initial Claim For Furloughed
Federal Government Employees
Claimant: Please complete items Numbered 1 through 20 (Please Print Clearly)
1. CUMMnt'* n*iim: |U^
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Ali«n R«gitu*lion Nuruxr ____^
19. Did you raeatv*. will you rtotiv*. or tr« you racelving p*ynwni inder «ny lyp* of rtUremeni plan, pension, cociil ucurity. WA, KeOQH,
etc. baud upon praviout wnploymraT Q Vm Q H<
If y»«. How much nwnttilyl
20. H«v* you wortiad lor iha FtdertI Govanvnani (or at laatl tha past 30 dayt7 Q Y«« Q Ns
Federal Agency: Please complete Gross Wages Information for Items Numbered 27 through 29
27. Bate Period
July 1.1994
Juna 30. 199S
Quartar Ending Yaaf
Code
Calendar
Quarter
28. Annual Salary In Federal
Civilian Service
29. Documentary evidence (Federal Agency
Notice or SF-8) Showing Federal Civilian
employment
ACCOUNT MUM8ER
30. Reason for Separation:
Furlough
L fix dtimant. undamind: ttwt p«Mlii«t ut pmidad ty l«w lor an iMMdutl making ItiM luiinwnu to oMtln tanaflu: tnai any d««nitlnation taaM •
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may ftava lo ba raoaid or otfMl againal futura banalitt.
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3 1 . Signaiura of Claimant
I HEREBV wima t s the itionature of |W« efaimanf and CeRIJFY thai lf» clalmani has rnit the W9is<nMtoora<;t)irarMrils^i^^
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'luy Talaphona Numbar
Employer's Sell Claim Filing Fo
176
UNEMPLOYMENT COMPENSATION FOR FEDERAL GOVERNMENT
EMPLOYEES IN THE DISTRICT OF COLUMBIA
Q
uestions and rTinswers
Q. What Benefits Are Fuiloughed Federal Government Employees Entitled To Who
Work in the District of Columbia?
A. Federal employees who are unemployed as a result of a hiHough are entided to the
same benefits as any employee on a temporary layoff. Benefits are based on gross weekly
earnings. In the District, benefits are calculated at approximately 50% of the employee's gross
weekly wage up to a maximum weekly benefit of S347 per week. The minimum amount of
benefits is S50 per week
Q. Are All Federal Employees Entitled To District of Columbia Benefits?
A. No. The federal employee's duty station determines the state in which the daim is filed.
Federal employees whose duty station is in the District of Columbia will receive benefits
calculated on the above formula. Employees outside the District of Columbia will receive
benefits based on the formula in the state in which thdr duty station is located. The determining
hctor is where the duty station is located, not the location of the agency headquarters or payroU
office.
Q. How Long Must the Furlough Continue For Federal Employees To Be Elipble For
Benefits?
A. The District of Columbia has a one-week waiting period. Therefore, the first week of
unemployment is not compensable and no benefits may be paid for the first week claimed. If a
furlough should last longer than one week, the second week and succeeding weeks are
compensable.
Q. How Will Furloughed Federal Employees Apply For Benefits?
A. To handle the anticipated large volume of claims, Federal agendes are being provided a
spedal self-filing daim form with instructions on how the daim must be filed. The daim forms
and instTuctions will be distributed by agency personnel authorities should it become- necessary.
D.C. Department of Employment Services **^t Government of ttte District of Columbia
Joseph P. Yeldell, Director •_ Marion Barry, Jr^ Mayor
177
Q. How Long Will Benefits G>ntinue?
A. The maximum duration of benefits in the CKstrict of G>lumbia is 26 weeks.
Q. When WUl I Receive My Fitst Check?
A. The initial payment is generally issued within 10 days of the receipt of your first mall
daim card. While payments are made by the District of Columbia, the fimds to pay benefits are
provided by the federal government If federal funding authority is not available, however, the
actual payment of benefits may be delayed.
D.C. Department o( Employment Services *** Government of the District of Columbia
Joseph P. Yeldell, Director SSS Marion Barry, Jr^ Mayor
178
Attachment F
Broadcast Messages, Media Talking Points, Etc,
179
Secretary Brown's Daily Message to VA Employees
November 17, 1995
I just want to thank each VA employee during this difficult time for yoxii
dedication to helping our veterans. Once again, you are showing Americans
that our mission comes first, no matter the adverse circumstance. That you
would place your responsibilities to our patients and beneficiaries above the
uncertainties and disruptions of this period makes me very proud of the
caUber of people who are "putting veterans first" throughout VA I wish I
could tell you how long this furlough period will last and that your pay is not
in jeopardy. However, no VA employees -- neither those who remain on the
job or those who were furloughed - wiU be paid on Dec. 1 if there is no
agreement on funding by Nov. 29. We all hope for a quick resolution. I will
do all within my authority and power to make certain that veterans -- and VA
employees -- do not become budget casualties.
Message from Secretary Brown, Decernber 4, 1995
The government shutdown did not stop the processing of VA
home loans for many of our veterans. Loan Guaranty divisions
that left their automated systems up and running during the
shutdown were able to continue to provide appraisal
assignment service. The many lenders who participate^ our
lender appraisal processing program were able to continue to
receive appraisal reports directly from fee appraisers, make
value determinations and close loans. Over the years,
dedicated VA Loan Guaranty employees have helped make
homeownership dreams come true for nearly 15 million
veterans. It's reassuring to know that with our private
industry partners and automation, we have the means to
continue that fine work temporarily during a crisis.
180
lecretary Brovm's Daily Message, August 30, 1995
»s you are likely aware, there is a strong probability, given the position
of the Congressional leadership on the appropriations bill, that there will
be no agreement on FY96 funding in time to avert a shutdown of the federal
government early in the fiscal year. As a result, a significcint number of
VA employees will likely be furloughed for a period in October. While we
wait and hope for the funding picture to clear, we must prepare for this
shutdown. In doing so, our paramount concern must continue to be our
veteran patients and customers - minimizing the impact on their health care
and benefits. I regret that such a drastic measure may be imposed on the
most dedicated group of employees in government - VA employees . I hope
this action, which would be so disruptive to the lives of so many good
people, can be avoided. If not, rest assured that you will not be
forgotten and I will do all I can to bring an end to this difficult time.
SPECIAL SECRETARY BROWN'S DAILY MESSAGE. November 13. 1995
The Federal agencies have been operating under a Continuing Resolution (CR)
since October 1, 1995. The current CR expires at midnight on Monday.
November 13. 1995. At this point appropriations bills for the VA and most other
Federal agencies have not been enacted. Because there Is a real chance that the
Congress will not pass an acceptable CR by Monday, agencies have been advised
by the Office of Management and Budget to review their plans for shutting down
agency operations in the absence of appropriations and to inform their employees
of the following:
ALL EMPLOYEES SHOULD REPORT FOR WORK ON MONDAY.
NOVEMBER 13, 1995. MONDAY WILL BE A NORMAL WORKDAY
FOR THE FEDERAL GOVERNMENT.
REGARDLESS OF WHETHER A CR HAS BEEN ENACTED. ALL
EMPLOYEES SHOULD REPORT FOR WORK ON TUESDAY.
NOVEMBER 14, 1995 TO RECEIVE FURTHER INSTRUCTIONS.
JESSE BROWN
181
Pay Slip Message
MESSAGE FROM SECRETARY JESSE BROWN (Dec. 5, 1995)
I am delighted that all VA employees are back to work continuing our mission of
"putting veterans first" I want those of you who were furloughed recently to
know that I believe each and every one of you provides an essentisd service for
our nation's vetenms and their families. And Tm thaiUcful you have returned to
work. I want to thank those of you who were on duty during the shutdown for
your dedication and hard work. VA employees are special and truly know and
live the meaning^of service and compassioa I am proud of all of you.
182
Media Talking Points
IMPACT OF FEDERAL SHUTDOWN ON
VETERANS BENEFITSA'A EMPLOYEES
MEDICAL CARE
Medical care will not be disrupted. No veteran will have his or her care
delayed, deferred, canceled or otherwise adversely impacted as a result of
shutdown activities.
VETERANS' BENEFIT PAYMENTS
Excepted VBA employees at field facilities will continue to determine
eligibility for benefits associated with other excepted VA activities (claims
for burial, terminal illness, medical care), receive and process payments,
manage issues involving government property and maintain automated
records systems. Otherwise, new claims for benefits will not be processed.
In addition, if there is no appropriation as of Dec. 1 when the next benefits
checks are to be mailed, these payments WELL NOT BE MAILED to
veterans or other beneficiaries. These checks include disability
compensation, pension and DIC. The number of individuals affected is as
follows:
Compensation 2.5 million
Pension 787,000
DIC 301,000
TOTAL: 3.58 million
NATIONAL CEMETERIES
NCS will continue to bury eligible veterans in national cemeteries.
IMPACT ON VA EMPLOYEES
Excepted/Funded Perform Shutdown Act. Immed. Furloughs
VACO 266* 49 3,404
Field 200,126 9 32,950
♦Includes Presidential appointees
11/13/95
183
Media Talking Points
Veterans Benefits Administration
Clarification of Shutdown Impact
In the event of a week long shutdown Ac followng would occur:
• C&P checks scheduled to be delivered December 1, would not be delayed tfz.
Second Continuing Resolution is enacted by November 22.
• C&P retro diecks averaging $13 million Would be delayed for nearly 7,000
recipients.
« Education checks averaging $10 million would be delayed to approximately
30,000 recipients.
• Insurance death claim benefits would be delayed to approximately 3,500
survivors at a value of $19.2 million.
• Insurance dividend payments of Si 8 million to nearly 45,000 veterans would
be delayed.
I
184
Mr. Mica. Thank you, Mr. Brickhouse.
I would like to recognize now Shirley Chater, Commissioner of
the Social Security Administration.
Welcome.
Ms. Chater. Thank you, Mr. Chairman and members of the com-
mittee.
My written testimony has been presented to you for the record.
With my time this morning, I would like to answer some of the
questions about the number of Social Security Administration em-
ployees who were furloughed. I would like to tell you about the
services that were maintained during the shutdown and the serv-
ices, of course, that were interrupted.
On November 14, the Social Security Administration furloughed
about 61,000 nonexcepted employees and retained about 4,800 ex-
cepted employees. The vast majority of those employees who re-
mained on the job were directly involved in the processes involved
in paying benefits to currently enrolled Social Security, Supple-
mental Security Income, and Black Lung beneficiaries. We also re-
tained some employees who maintained records for those bene-
ficiaries currently on the rolls.
Social Security continued to perform functions related, of course,
to the protection of life and property, and all of the administrative
activities necessary to support the excepted functions. I want you
to know, however, that none of our Social Security district offices
were closed.
Now, let me tell you about the suspensions. There were a num-
ber of agency functions that we suspended during the shutdown. I
want to make it clear to you that Social Security never used the
term "nonessential" to describe either the services that were dis-
rupted during the shutdown period nor the employees who provide
those services. Although the functions that were suspended did not,
at that time, meet the definition of excepted activities under the
statute, they are critical to the mission of Social Security, and we
feel very strongly about that.
Now, if I can tell you about the work that was not done, I need
to paint a context for you so that you understand how far behind
we are. The Social Security Administration receives, on average,
about 28,000 retirement and disability benefit applications every
single day. We receive an average of about 53,000 applications for
Social Security numbers every day. And every day we answer about
200,000 telephone calls on our 800 number. Every day we conduct
approximately 2,700 hearings for claimants who appeal the denial
of benefits.
Well, Social Security, during the shutdown, did not process appli-
cations for new benefits or Social Security numbers. We provided
only an automated message on the 800 number, so we were not
available to answer questions. And, of course, there were no hear-
ings conducted during this 4-day period.
These numbers make it very clear that an appropriation lapse
has a severe impact on Social Security's ongoing ability to properly
administer the Social Security programs. If several days elapse in
which no benefit applications are handled and no hearings are con-
ducted, it could seriously impair the agency's capacity to process
pending claims and appeals.
185
Because of our deep concern about the potential impact on serv-
ice to the public, we were prepared to make appropriate adjust-
ments in our initial SSA shutdown plan, if we suspected a pro-
longed lapse in appropriations. The President asked SSA to review
its shutdown plan in light of the potential length of the shutdown.
We were ready to act. We were ready to accept and process new
claims applications.
I decided, at that point, should it come, I would expand the num-
ber of excepted employees effective November 20 and bring back
50,000 people, especially to our field offices and to the telephone
centers. On the other hand, those not directly involved in paying
benefits, or accepting and processing claims, would have remained
on furlough. Because all Federal employees returned to work on
November 20, I did not have to take this action.
In closing, I can say with confidence that Social Security imple-
mented the shutdown in an orderly manner and in full compliance
with the applicable statutes and directives and guidance from the
Office of Management and Budget and others with governmentwide
responsibility for ensuring the consistency of individual agency
shutdown plans.
I would be happy to answer your questions.
[The prepared statement of Ms. Chater follows:]
186
SJ? 7^^% ^-E
USA
STATEMENT ON
THE GOVERNMENT
SHUTDOWN
BY
DR. SHIRLEY S. CHATER
COMMISSIONER OF
SOCIAL SECURITY
BEFORE THE
HOUSE COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
CIVIL SERVICE COMMITTEE
DECEMBER 6, 7995
^1^^ FOR RELEASE ON DELIVERY .^TIT
n"l± ±l"a
187
Mr. Chairman and Members of the Subcommittee:
As we are aware, a lapse of appropriations for most Federal
agencies, including the Social Security Administration (SSA) ,
recently led to a temporary shutdown of many Government
functions. I appreciate the opportunity to explain how SSA
planned for this contingency and implemented its shutdown plans.
I would like to clarify that nowhere in either the statute
or guidelines does the word "essential" appear. It is extremely
unfortunate that this word was used during the recent furlough to
refer to Federal employees as being "essential" or "nonessential"
employees. In fact, the statute says that when there are no
appropriations, all employees are furloughed except those
performing emergency activities that include, among others, the
provision of mandatory benefit payments and the protection of
life and property. If we were furloughing only "nonessential"
employees, no employee would have been furloughed because they
are all essential.
Shutdown Plans
My testimony will generally address the questions you raised
in your letter of invitation, beginning with a description of
SSA's process for developing and implementing shutdown plans.
Office of Management and Budget (0MB) guidance requested
that each agency develop an operational plan for an orderly
shutdown in the event of a lapse of appropriations. SSA's
contingency plan consists of individual plans, approved by the
Commissioner, which are developed and maintained by Deputy
Commissioner (DC) level components. If notified by 0MB of a
funding lapse, the Commissioner will activate the SSA Command
Post, which will oversee the implementation pf SSA's contingency
plan and provide guidance. The Command Post, which is comprised
of representatives of the Office of Personnel and each DC
component, will immediately notify the DC- level component heads
to implement their individual contingency plans.
I am attaching to my testimony a summary of SSA's procedures
for shutdown and startup due to lapse of appropriations. This
document contains more detailed information regarding SSA's
shutdown plans. We informed 0MB of our shutdown plan in advance
in order to ensure consistency among Federal agencies in the
interpretation and application of pertinent statutes.
188
We received a number of issuances providing guidance and
information from 0MB and the Office of Personnel Management
(0PM) . I can assure you that SSA has adhered to all guidelines
and standards with respect to developing and implementing an
appropriate contingency plan.
Impact of Furlough on SSA
You asked about the number of SSA employees furloughed, the
number who continued working, the functions they performed, and
the rationale for continuing chose functions.
During the orderly shutdown effected on November 14, and
consistent with our shutdown plans, SSA furloughed approximately
61,000 non-excepted employees and retained about 4,800 excepted
employees beyond the lapse of appropriations. This was
consistent with SSA's previously established shutdown procedures.
The attached chart shows the categories of activities for which
employees were retained and the number of excepted employees
involved in those activities.
The functions these employees performed were mainly in
direct support of paying benefits to currently enrolled Social
Security, Supplemental Security Income, and Black Lung
beneficiaries and to maintain essential records for those
beneficiaries. It is our view that, because there were
appropriations for the program costs of paying benefits, this
necessarily implied authority to incur obligations for the costs
necessary to administer those benefits. Other functions
permitted under applicable statutes, including the Anti-
Deficiency Act, during a lapse in appropriations related to areas
such as protection of life and property and all activities
necessary to support the excepted functions.
You also asked about the cost impact on SSA of the shutdown.
While we have not completed our review of the cost to SSA of the
shutdown, SSA's major cost was the cost of paying furloughed
employees. We estimate that payroll costs for furloughed
employees amounted to $43 million for the four full business days
during the shutdown period. Additional costs incurred include
full rental costs for SSA facilities, even though most were
minimally staffed, and costs for services which we paid for, but
did not receive, such as training.
189
Guidance to Furlouahed Employees
With respect to the guidance provided to furloughed
employees concerning such issues as pay and unemployment
compensation, I am pleased to report that we were able to keep
employees fully informed before, during, and after the furlough.
0PM was helpful in providing us with information from the
Department of Labor about unemployment compensation, and we were
able to pass this information along to our employees.
As SSA updated its contingency plans, we provided written
questions and answers about furlough issues to all employees
before the start of the fiscal year. I updated this information
by means of electronic mail messages to all employees as the
possibility of a funding hiatus increased. A communications
network of designated furlough contacts was established to
disseminate information quickly throughout SSA via electronic
mail, conference calls, and meetings.
We have also been operating a telephone hotline to provide
employees with information and instructions before, during, and
after the furlough. For example, du"ing the furlough, the
hotline assured employees that they would receive on time their
pay due on November 21 and gave specific instructions for filing
applications for unemployment compensation.
SSA has no subsidiary agencies. We do, however, provide
100 percent of the funding for the operations of State Disability
Determination Services (DDS) , which make disability
determinations for SSA. Although DDS employees are State
employees, their salaries are fully funded through SSA's
appropriated funds. We notified the State DDS ' s of the impending
shutdown and informed the Governors we could not fund DDS
operations for the shutdown period.
Impact of Prolonged Shutdown
Finally, you raised several questions regarding our
assumptions about the length of the shutdown, and the effect of
such assumptions on decisions as to which functions should be
continued during the shutdown period.
40-190 97 - 7
190
Before addressing these questions, let me briefly mention
some workload statistics to put in perspective the scope of SSA's
activities. These activities represent basic services to the
public- -services that were denied to them during the shutdown
period. For example:
o We receive an average of about 28,000 retirement and
disability benefit applications per day;
o We receive an average of about 53,000 applications for
Social Security numbers per day;
o An average of about 200,000 calls per day are made to
our toll-free 800-number; and
o We conduct about 2,700 hearings per day.
Although a very brief shutdown only slightly disrupts the
services we provide, I think it is obvious that an appropriations
lapse of one to two weeks would cripple SSA's ongoing ability to
properly administer the programs for which it is responsible, and
could seriously impair its capacity not only to distribute
accurate payments to current beneficiaries of all of its
programs, but also to process pending, claims and appeals.
Although we did not make any specific assumptions about the
length of the shutdown, our contingency plan provided for a range
of appropriate adjustments we could make in the event of a
prolonged shutdown. Thus, when the President asked that SSA
review its shutdown plan in light of the length of the shutdown,
we decided to implement a phase of the plan that expanded the
number of excepted employees by about 50,000 effective November
20, in order to ensure that SSA could accept and process new
claimb applications. Of course, since the shutdown ended and all
employees returned to work on November 20, we did not have to
implement this decision.
Conclusion
I deeply regret any hardship or inconvenience which members
of the public and SSA employees may have suffered as a result of
the shutdown. However, I believe that SSA implemented the
shutdown in an orderly manner and in full compliance with
191
appropriate directives and guidance from 0MB. Obviously, in the
interest of the public we serve and the employees who provide the
services, I want to express my sincere hope that we will not have
to implement shutdown procedures in the future.
Attachments
192
Social Security Administration
PROCEDURES FOR SHUTDOWN/STARTUP DUE TO LAPSK OF APPROPRIATIONS
The Office of Management and Budget (OMB) guidance requires that
each agency develop an operational plan for an orderly shutdown,
in the event of a lapse of appropriations. SSA's contingency
plan (CP) consists of individual plans which are developed and
maintained by Deputy Commissioner (DC) -level components. If
notified by OMB of a funding lapse, the Commissioner will
activate the SSA's Command Post, which will oversee the
implementation of the Agency CP and provide guidance. The
Command Post (comprised of a representative from the Office of
Personnel and each DC component) will immediately notify the DC-
level component heads to implement their individual CPs .
The following are basic steps to be used by each DC-level
component to activate individual CPs in the event of a shutdown.
(More specific guidelines are provided in the SSA AIMS 17.01) :
IMPLEMENTATION
General
o Select, immediately, a minimum number of support staff to be
retained to perform work authorized by law during a lapse in
appropriations. The remainder of employees will be
furloughed.
o Notify the Office of Systems of component telecommunications
requirements, as soon as the number of support staff
has been determined.
o Provide, immediately, to the Office of Personnel (OPE) ,
Office of Human Resources (GrfR) , the names and number of
employees to be retained and/or furloughed. This list
should include the employees' retention/furlough status,
SSNs and timekeepers' numbers.
--Managers should also maintain a separate list with
employee home telephone numbers and addresses.
- -Managers should notify employees that they are either
excepted or nonexcepted from the furlough.
193
o Immediately notify those employees, verbally, who will be
released and inform them of their rights and
responsibilities .
o OPE will use the public address system at Headquarters to
convey information regarding lapsed appropriations and the
release of employees scheduled to be furloughed.
o DCs with field components will advise them to implement
their individual CPs.
o Terminate all work activities not authorized by law during a
lapse in appropriations, imr ediately.
--A checklist of basic functions/activities is provided in
SSA's Administrative Instructions Manual System 17.01
(Contingency Planning, Policy and Procedures- -Funding
Lapse) to determine which functions are authorized and
which functions are not authorized during a lapse in
appropriations .
o Cancel, immediately, scheduled conferences/meetings, and
discontinue training not authorized by law during a lapse in
appropriations .
o Advise employees in travel status to immediately return to
duty stations; no further travel will be authorized.
o Cancel, immediately, overtime and compensatory time, unless
authorized by the Commissioner for excepted functions (via
the Command Post) .
o Notify, the Command Post, as soon as possible, when
individual component CPs have been fully implemented.
Specific
DC-level CPs contain action steps unique to the mission of the
component . For example :
o The Deputy Commissioner for Finance, Assessment and
Management is responsible for determining which services are
needed for continuing functions in each location (e.g.,
lights, water, air-conditioning, etc.), and coordinating
shutdown of facilities.
194
o The Deputy Commissioner for Human Resources is responsible
for the processing of furlough actions (if a continuing
resolution or an appropriations bill is not passed within a
few days of furloughing employees) .
o The Deputy Commissioner for Operations is responsible for
ensuring that appropriate signs/notices are posted at public
contact offices, stating that offices will be open to
continue to carry out activities authorized by law, on a
limited basis.
o The Deputy Commissioner for Programs, Policy, Evaluation and
Communications is responsibl'= for notifying the Federal,
State, local and public agencies (dependent upon SSA for
information) of the cessation o£ SSA activities.
o The Press Office is responsible for maintaining contact with
the news media to keep the public and furloughed employees
informed.
o The Deputy Commissioner for Systems is responsible for
coordinating any equipment shutdown/startup (including
telecommunications equipment) to avoid power surges, systems
overloads, etc.
RESTART /RESUMPTION
Once the word is received from 0MB to resume operations, the
Command Post will communicate thi,9 to che DC- level component
heads, who will implement the startup/recall provisions of their
CPs.
o The Press Office will immediately notify the media to
announce resumption of SSA's operations.
--Employees would already know to listen co certain radio
and TV stations for the announcement.
o Office heads will notify subordinate managers, by telephone,
who will notify employees of date and time to return to
work.
o As startup functions are resumed, managers should,
immediately, relay information upward to the next level of
command; the DC-level component heads will, in turn.
195
communicate this to the Command Post .
--Any significant problems should be reported promptly to
the Command Post .
The Command Post will be dismantled, as soon all DC- level
components have reported attainment of a normal level of
operations .
196
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197
Mr. Mica. I thank you and each of the panelists for your testi-
mony this morning and for the comprehensive coverage each of you
provided the subcommittee with how you approached this question
of a shutdown.
I would like to begin some of the questioning by asking if, in
fact — let's see, we have several different plans for shutdown. I have
an HHS plan here which I guess is basically a two-page plan.
Maybe there is more to this. You have 60,000 employees, and I be-
lieve 27,000 were deemed essential. Then I have another plan here
which is a little bit thicker, from the Department of Labor, and this
one is 184 pages. You have a total of 16,000 employees, of which
somewhere in the neighborhood of 700 were deemed essential and
retained. It seems to be sort of a wide disparity.
Maybe I could ask HHS, is this your full plan or do you have
something additional?
Mr. Broadnax. Mr. Chairman, the document that you are hold-
ing, the two-page document, really acts more as a summary. The
detailed plan behind that summary is approximately 30 pages. It
still does not come to the 184 pages that the Department of Labor
has. I would go on to say that, in this particular case, I think the
difference is probably in the details, in terms of the difference in
the two roles and functions, at least at some level, that the two de-
partments play.
Mr. Mica. Well, the other question I have for both of you, now,
you know, the shutdown doesn't appear to be any new idea. I think
we had testimony from Mr. Glynn, and maybe Mr. Munoz also
spoke to it, shutdowns are not new. I think in 10 of 12 years we
didn't have appropriations measures.
But I have a memo dated July 26, which doesn't say anything
about whether the Speaker gets to speak with the President on the
plane or not, but, in fact, it is by Alice Rivlin, and it says, "Plan-
ning in light of appropriations actions," very clearly directing you
all, on the 26th, to come up with plans. It says, "we recognize that
there may be delays, or reflects sharp disagreement with the Presi-
dent's requests, and that there may not, in fact, be funding."
Did each of you see this, each of you receive this? It's my under-
standing, too, that you were to respond by September 5; is that cor-
rect? Did everyone here respond? I'm getting affirmative head
shakes. So it wasn't anything, first of all, new; and, second, that
there were some very direct actions by the administration to plan
for the shutdown.
My question is, do you feel this is adequate? I don't see a great
deal of distinguishing between what is essential and nonessential,
either with functions or employees, and I see a great disparity be-
tween the plans that have been developed.
I would like you to respond. Maybe Mr. Broadnax, you could re-
spond, and Mr. Glynn. And the others, feel free to comment.
Mr. Broadnax. Sort of back to where we stopped with the com-
parison between the two plans, Mr. Chairman. If you look at the
Department of Health and Human Services, what we did was to
apply the guidelines as outlined by the law and the 0MB guide-
lines that were issued, and applied that to the work of the depart-
ment from the bottom to the top.
198
After applying the law and the guidelines, with the guidance of
0MB in that process, we then came out with a number of people
that we felt that we could furlough, in the first instance, and the
number that would be required or excepted, as it were, to carry on
the work of the department, in the first instance, but understand-
ing, as outlined in our plan, that this was an evolving process, so
the number we began with might change after a period of time, de-
pending on the length of the shutdown.
Mr. Mica. Mr. Glynn, how do you see this? Is this adequate? Do
you see these guidelines as adequate? You prepared a more com-
prehensive response.
Mr. Glynn. Well, as I indicated and as you mentioned, the De-
partment of Labor, along with several other agencies in our Appro-
priations Subcommittee, has had numerous opportunities, over the
last 10 or 15 years, to prepare shutdown plans because of the dif-
ficulty of getting our appropriation approved by October 1.
So we found the guidance issued by 0MB adequate. I think per-
haps it would be fair to say that, over the years, a certain amount
of boilerplate has been developed. In terms of how the shutdown
plans have been developed by our department and reviewed by
0MB, we chose to submit to 0MB a full plan, with all the
boilerplate attached. It sounds like, at HHS, they recognized that
perhaps 0MB had a certain amount of this because it has been
done over the years.
So I'm not sure that there's as much difference, in terms of the
two documents, as it might appear at first blush.
Mr. Mica. The other question I had is with some of the rationale
for closing down certain functions, and then with some of the sta-
tistics that have been quoted. Mr. Broadnax, did you say that there
were 1,500 or 15,000 deadbeat dad requests a day?
Mr. Broadnax. Fifteen to twenty thousand per day.
Mr. Mica. Per day. That would be 3 million a year?
Mr. Broadnax. This is through the referral service.
Mr. Mica. Three million a year?
Mr. Broadnax. Well, these are calls coming in. So you could
have, you know, a call every day about the same person, presum-
ably, but that's the number of calls coming in.
Mr. Mica. Let me, if I may, go to the VA here. Mr. Brickhouse,
there seem to be some changes in what was essential and non-
essential, as far as what the administration considered essential on
one day versus another day. I believe the President decided to call
back 1,700 VA field staff and change this after your initial deter-
mination.
Did you have direction from the administration to make these
changes, or did you initiate this?
Mr. Brickhouse. Mr. Chairman, when we developed our plan
that was submitted to 0MB at the start of the shutdown, we out-
lined the numbers that we thought were appropriate. However, in
that planning, we planned for a shutdown perhaps in the neighbor-
hood of 3 or 4 days, at maximum. What happened on the last Fri-
day of the shutdown, when we began to look at our activities, we
recognized that perhaps, if this shutdown was going to go into
Monday of the next week, that we felt it appropriate to identify and
bring some additional people in.
199
Mr. Mica. So you initiated that request rather than vice-versa?
It was a request to the administration and the President?
Mr. Brickhouse. We initiated the request, yes.
Mr. Mica. And did any of you request changes as far as essential
and nonessential? You did, Mr. Robinson?
Mr. Robinson. Yes, sir, we did.
Mr. Mica. What was that?
Mr. Robinson. Well, similar to the VA, we reviewed our shut-
down plans, which, as indicated, have been longstanding across the
government, in light of the guidance that we received from OMB,
and we submitted a plan that indicated a certain nature of flexibil-
ity, because, based on the experience of the government, a short
shutdown had been the experience that our agency had been
through and the government had been through.
Our plan called for us to review, based on the length of the shut-
down, and we had initiated discussions during the week of the
shutdown with OMB, petitioning them to modify our plan.
Mr. Mica. Since the last shutdown, we have Defense and Treas-
ury; Postal has been passed. We have seven appropriations bills in
place. Have there been any additional requests from either OMB
or from the administration to redefine what is essential or non-es-
sential? If we get into a second shutdown, has there been any re-
quest to redefine the terms? Are any of you aware of anything?
Mr. Glynn. Mr. Chairman, I would say OMB has asked us to re-
view the success and the lessons from the first shutdown, and
make any appropriate amendments to the plan, which does not
speak directly to the question, but we haven't had to.
Mr. Mica. Did you have a deadline for submitting that?
Mr. Glynn. I think it is due a week from tomorrow.
Mr. Mica. A little close, but I guess we're looking at December
15th as the next possible day. That is a week from tomorrow, next
Thursday.
Mr. Glynn. Yes. Actually, I have the memo with me, if you want
to wait 1 second.
Mr. Mica. I think it is important that we find out what steps are
being taken to see what services should be continued, what func-
tions should be continued, what personnel, and how these matters
should be handled.
Mr. Glynn. I'm sorry. It is due to OMB on December 10th.
Mr. Mica. December 10th. Well, I have some additional ques-
tions, but I don't want to take all the time. I will yield now to the
ranking member, Mr. Moran.
Mr. MORAN. Thank you, Chairman Mica. The thing that I found
most troubling and disappointing about the way in which the exec-
utive branch reacted to the shutdown was the bizarre situation you
created on the first day of the shutdown, with everyone coming in
to work and then being told whether or not they were essential and
being sent back home again.
As far as I'm concerned that was inexcusable and, in fact, we
knew by the end of the prior week whether or not people should
be coming in to work.
It seems to me, when there was clear indication and plans being
put together in the last summer of this year, in July and August,
that we may very well reach a situation that could cause a govern-
200
ment shutdown and, clearly, that very short-term continuing reso-
lution that was passed as of October 1st indicated we had a poten-
tial problem coming at the expiration of the first continuing resolu-
tion, there should have been contingency plans made for the first
day when you would have lapsed appropriations; and it appears
that there were not.
I just can't imagine why you would create a situation where em-
ployees came in and were told to go back home again. It is demean-
ing, it is amateurish, it is irresponsible, et cetera.
Now, if you disagree, tell me, but I would like to know how that
situation developed at some of the larger agencies, and why — why
there were not contingency plans made by 0MB and the White
House, and made available to the agencies and, if there were, why
they were not carried out.
Let's start with Dr. Broadnax from the largest agency, I guess,
represented here, in terms of employees, a substantial number of
whom came in first day on Monday and were sent back home
again. Why?
Mr. Broadnax. Congressman, there are roles for people to play
during that 3-hour period that you are talking about when people
came back in, and people secured their various areas depending on
the work that they were carrying out during that 3-hour period.
People weren't just coming back in and sort of standing around
wringing their hands, as it were, but were actually working to se-
cure the areas where machinery was involved, or secure machinery,
and make other arrangements to get us into the full shutdown.
The full shutdown began 3 hours subsequent to those employees
having arrived, carried out their tasks and duties, and then were
sent home.
Mr. MORAN. What you are telling me is, for the first 3 hours of
the day, their services were considered essential, even though there
was no reimbursement for that effort available at the time.
See, the problem is, if we are going to operate within a strict
legal construct here, the only way you can justify any members of
the Federal work force going to work is to consider them essential,
and we have a definition of essential: the safety of human life and
protection of property. I guess the latter is probably what you used.
You would have to have some type of legal opinion, to get around
the Antideficiency Act, that these people were, at some point, es-
sential. In other words 100 percent of your employees you would
have to legally justify were essential at the time, for those 3 hours,
and then, all of a sudden, they are not essential.
I don't know why that wasn't done the end of the work week,
rather than waiting until not the 11th hour or the 12th hour, but
12:05, after the expiration period.
Mr. MuNOZ. Could I?
Mr. MORAN. Yes, I would like for you to, Mr. Muiioz.
Mr. MUNOZ. Sir, let me just say that I think 0MB did an excel-
lent job of having a contingency plan, because we were on hold. We
were informed by 0MB — by Alice Rivlin in particular — that we
were to not notify anyone of a shutdown until we received notice,
and that could have been on Monday, we were told, so be on hold
for a possible Monday notification, or not until Tuesday.
201
Now, I don't know what went into the thinking as to whether or
not to not do it on Monday so that people don't have to come back
on Tuesday but, as I understand it, 0MB very much respected the
prerogative of Congress to decide whether or not, after midnight
Monday night, there was going to be — before midnight, there was
going to be anything.
A perfect example of that was, in fact, when the shutdown was
terminated, as we understand, in a period of a very few hours, set-
tlement was arrived at between the President and the Congress on
terminating the shutdown. I believe that was what was the think-
ing.
Second of all, there are certain legal procedures that need to take
place when you get into an orderly shutdown. Coming back Tues-
day morning was very positive for the Treasury Department and,
I may add, the legal authority that defines excepted and non-
excepted also says that you can maintain people for an orderly
shutdown.
We read that legally, based on our General Counsel's opinion,
that, for the whole morning on Tuesday, the hours that it took for
people to close down the files and make sure that there is no risk
or exposures from their retiring from work.
Second, we have a legal obligation to give furlough notices in
writing, and have some indication of receipt of notice. All that was
taken on after we knew that the Congress and the President de-
cided not to agree that there was going to be some funding.
We think that that was probably the best way to approach it,
and we felt very comfortable. By Tuesday afternoon, there was a
good, clear communication as to who was going to stay and who
wasn't.
At the Treasury Department, for example, sir, we have some
functions that are funded because they have a revolving fund, or
have other means of appropriations that would not be subject to
this furlough.
Nevertheless, because of the media communications, employees
sometimes got confused as to what is overridden and what isn't.
We made it very clear on Tuesday morning, and we made very ef-
fective use of Tuesday morning to hand out the furlough notices
and to make further communications to the employees.
Mr. MORAN. You just did an excellent job of defending 0MB and
clarifying the situation, but there are some problems with it.
For one, we had a different situation on the Sunday when we ter-
minated the shutdown, and that was not comparable to what hap-
pened on Monday. Presumably, the White House knew whether or
not it was going to veto the continuing resolution it received, and
it certainly knew what the continuing resolution was going to look
hke.
Now, I am not going to ask you that. That is OMB's job, to ex-
plain why they didn't act or why the President didn't give some
earlier indication, but I think it is a different situation that oc-
curred on the Sunday when the government shutdown ended.
I have the sense that some employees, even on Monday, knowing
that anybody that had been watching it closely would have known
that there was not going to be work on Tuesday for at least 40 per-
^02
cent of the work force, some of them did not know whether they
were essential or non-essential.
Now, did everyone in your respective agencies know whether
they were classified essential or non-essential on Monday? Is there
anyone who did not?
[No response.]
Mr. MORAN. Every agency represented here informed their em-
ployees as to whether they made the cut or not? That is true? Is
there any exception?
[No response.]
Mr. MoRAN. If not, forever hold your peace, I suppose. You want-
ed to say something further?
Mr. JNiuNOZ. Sir, the clearest indication to an employee is when,
in fact, they receive the furlough notice. That is the ultimate and
clearest. You don't want to wait until that instant happens.
Mr. MORAN. That is for sure.
Mr. MuNOZ. We did have communications beforehand, so that
there would be some clear communications on that; but, according
to law and for all practical purposes, especially when you have a
very large agency spread around the country, the clearest indica-
tion was that Tuesday morning. It was an effective use of that
Tuesday morning, to give the written notice and further instruc-
tions of how to shut down their offices.
Mr. MORAN. It is just that, since it was so likely, by the end of
the prior week, it seemed to me, the planning should have taken
place certainly by that Friday through the weekend, and no ques-
tion about it, on Monday.
The other thing I want to get into, although I don't want to take
time from my colleagues, but I think an important area of consider-
ation is whether those employees who had to stay at work, getting
reimbursed the same as their colleagues who were not at work,
whether there was ample communication so that those who were
on the job knew how to carry out not just their own function, but
the necessary functions of their colleagues.
That is the kind of forward planning that seemed to be nec-
essary. I have a lot of Federal employees, as you know, in my dis-
trict. I don't have a sense that much of that took place, that it was
almost a shock to the vast majority of Federal employees that this
happened; they were really unprepared, and a lot of the people who
were left on the job didn't know how to handle the responsibilities
of their colleagues who were not on the job. I think there are prob-
lems.
The best way to deal with this is to simply make sure everybody
stays on the job next time, and we don't have one of these inane
furloughs and, if people are going to get reimbursed — which they
certainly should — then they be reimbursed for work that they per-
formed in the interim, and we are going to try to get that legisla-
tion through.
I do think there are some problems in the forward planning of
this situation which, at some point in advance of when it occurred,
was inevitable. Thank you, Mr. Chairman.
Mr. Mica. I thank the gentleman and yield now to Mr. Bass.
Mr. Bass. Thank you very much, Mr. Chairman. To follow on the
very last comment that Mr. Moran made, I think it can be observed
203
that the issue of giving an employee compensation for time not
served on the job further exacerbated the humiUation of being
deemed non-essential and not going to work, then getting paid for
not going to work.
My question is a general question that any of you can address,
if you wish.
That is, do any of you have any specific suggestions for congres-
sional action that might clarify for you the definition of "essential"
versus "non-essential," or even redefine the term, to establish bet-
ter procedures for implementing a shutdown, which may, in some
instances, be unavoidable, in order to address Mr. Moran's question
about what happened to the employees during a specific period of
time, to establish consistency from one agency to the next so that
there aren't different standards adopted in different agencies and,
last and, perhaps for some of us, most importantly, to mitigate —
to attempt to mitigate — the impact — or the political impact — of a
shutdown so that a shutdown cannot, to the extent possible, be
used to make a political statement?
With that, I will just turn it over to anyone who wishes to ad-
dress those.
Ms. Chater. I would like to address the question, if I might, sir,
from the sense that it is probably going to be difficult to be thor-
oughly consistent across agencies, because the nature of our work
differs so much.
For Social Security, for example, where we are an extremely cus-
tomer-focused agency, we had appointments to take care of, ap-
pointments to cancel, and now appointments to make up, in a very
one-on-one kind of activity. Our work is, therefore, different from
another agency that perhaps doesn't deal with the public in a face-
to-face way.
While I think consistency across government is a good idea, I just
suggest that it might be difficult, based on the work we do and how
we do that work.
Mr. MUNOZ. One suggestion I might have is, the thing that was
constantly in our mind at Treasury when we were planning this
was the criminal penalties that accompany any running afoul of
the Justice Department guidelines on this issue.
Given that there are criminal penalties, you run the risk, on the
one hand, that if you read the opinions too broadly, so that you try
to put everything under protection of property, you run the risk of
running afoul of those criminal penalties.
If you read it too narrowly, then you run into some of the exain-
ples that were cited earlier this morning in terms of the public
being harmed in some fashion because they didn't fall within the
guidelines — the criminal guidelines.
Mr. Bass. How many prosecutions have occurred under that,
since its inception?
Mr. MUNOZ. Well, I am sure that, if there have been any, they
are not here today. [Laughter.]
I am not aware of any. Although, as a lawyer, I know that these
are very serious things and our good General Counsel that night
at the Treasury Department kept us aware that is the ultimate law
that we have to live by.
Mr. Bass. If nobody else has any comments, I will yield back.
204
Mr. Mica. I thank the gentleman, and yield now to Mrs. Morella
for a question.
Mrs. MORELLA. Thank you, Mr. Chairman.
I'm curious — and, again, I would ask all or any one of you, or
multiples of whatever, who might want to respond. I am curious
about whether or not your shutdown plan would be altered if the
shutdown occurred because of the debt ceiling versus the lapse in
appropriations. Would it be different, or would it be the same?
Have you had any instructions from 0MB or Justice on that?
Mr. MUNOZ. We have had no instructions, but those would be
two very different situations.
Mrs. Morella. You anticipate that it would be a different proce-
dure?
Mr. MuNOZ. The shutdown that we went through had a constitu-
tional basis, based on Congress's prerogative to appropriate or not
appropriate and, if appropriations were not granted, then we can
really not run afoul of that, lest we face criminal penalties.
If the government shuts down for another reason — a liquidity
point, it doesn't have cash — my sense is — and I don't know that we
would ever reach that point — my sense is that you don't have the
same guidelines, the constitutional basis of appropriations. We may
have appropriations appropriated to us but, if there is no cash, my
sense is that the thinking would go differently.
To answer your first question, we have not received any guidance
on it, but instantly I see a very different standard by which you
would develop your plans.
Mrs. Morella. A difference. Would you all agree, first of all, that
you have not received any guidance on it?
Mr. MuNOZ. Ma'am, can I just underscore, then, the point that
you made, and that some Members here have made also? That is
because the guidelines is not essential versus non-essential. If it
were, maybe there would be some great similarity. The guidance is
really whether you are excepted under the law or not.
Mrs. Morella. I don't know whether it would be a greater im-
pact or not. I mean, that would be an interesting point, also, for
any one of you to comment on.
Maybe I will address this one to Mr. Robinson. It deals with the
recall question. You indicated that there was a plan in place that
acknowledges the need to recall additional staff if the shutdown
continued beyond a week, and yet you had to go to 0MB to discuss
recalling people.
Were these recalls in your initial plan? Were they reviewed by
0MB prior to the week of November 13th. Because what I sense
you are saying is that 0MB approves our plan and then, if we need
to implement it, or part of it, or need a recall, we have to go back
to 0MB to get another part of it approved. Is this sort of like over-
kill?
Mr. Robinson. What I meant to indicate, Congresswoman, is
that our plan originally called for flexibility dependent upon cir-
cumstances. That is part of our plan that, as the circumstances un-
fold, we would reassess what needs we would have related to prop-
erty and safety, and modify our plan accordingly.
As the week proceeded, as I indicated, we determined that, in
fact, that was the case and that we needed to modify our plan. In
205
doing so, we had to submit it to 0MB, and that was the process
that we had undertaken.
Mrs. MORELLA. Do you think that is the most expeditious proc-
ess?
Mr. Robinson. Well, I have been in government 2 years now. It
is the only process I am aware of. [Laughter.]
I don't mean to be flippant in my answer, but there certainly is
a tremendous amount of oversight in terms of what we do, not only
in terms of our necessity to work with the Office of Management
and Budget, but our necessity to work across the board.
It is, I think, important that we not only address the law, but
we address the requirements of the personnel issues that are in-
volved and, certainly, the Office of Management and Budget has
the expertise and the responsibility in that area.
Mrs. MORELLA. Yes?
Mr. MuNOZ. Ma'am, could I just add something?
Mrs. MORELLA. Yes, certainly.
Mr. MuNOZ. In the last hypothetical, you posed the question of
would the plans differ any if there were a shutdown because of a
debt ceiling issue.
As I said, we have received no guidance on that, but I want to
re-emphasize, for those agencies that have appropriations already,
the debt ceiling really is not an issue as to whether you would face
a shutdown or not. It is a question of we still would have authority
to obligate the government to pay for the activities that take place;
so we don't anticipate the hypothetical that you pose to be an issue.
Mrs. MORELLA. It might be wise to have some kind of a tentative
plan that is thought about when you get the 0MB regulations with
regard to reporting for 3 hours on that morning, et cetera. That is
all spelled out in the 0MB statement that was made, or was sent
to all of you.
I guess, Mr. Brickhouse, in regards to the 1,700 employees who
are being recalled to receive and come up with date benefit claims,
you stated that Veterans' Affairs determined that the potential for
adverse effects of delays in receipt of applications qualified for an
exception under the Antideficiency Act.
I wondered if you might elaborate on why the Antideficiency Act
allowed for this recall and why the determination was not made
earlier? You began planning in August. Plans were set by Septem-
ber 30th. The shutdown happened in November, and you had to re-
call 1,700 people. I am just kind of mystified by it.
Incidentally, your percentage of furlough was, I think, the lowest,
wasn't it?
Mr. Brickhouse. Yes. That is primarily because our primary
mission in the VA is to deliver health care and, in those areas, we
elected not to defer or delay any treatment in our hospitals that
we have, the 72 hospitals that we have across the Nation.
Mrs. Morella. You could not anticipate that?
Mr. Brickhouse. In regard to your question, if I understand it
correctly, we did not anticipate initially the need for those 1,700
people. As I mentioned earlier, as we moved through the week and
saw this shutdown going longer than we had previously antici-
pated, we decided that it was necessary to bring in people to make
sure that they received and logged in claims.
206
Now, it is a legal requirement, that we must date-stamp claims
that veterans submit to us, so we felt that it was necessary to bring
in those people to do that, and also answer questions and also deal
with telephonic inquiries about these matters.
We also felt so strongly about this that we asked 0MB for per-
mission to, in essence, change our numbers. You are exactly right,
that they did come back and tell us that they felt that this was an
excepted function under the Antideficiency Act.
To answer your question, no, we did not anticipate it. However,
as we moved through the shutdown, we identified some areas of
concern in that area.
Mrs. MORELLA. Then you went to 0MB. Did you have to go to
Justice, too?
Mr. Brickhouse. I think the Justice Department collaborated on
this particular issue, yes.
Mrs. MoRELLA. With 0MB. You determined that as the result of
discussions with them? Do you discuss it with them or you tell
them?
Mr. Brickhouse. Yes, it was primarily through telephonic dis-
cussions with OMB, and we submitted written material on it, too.
Mrs. Morella. Fine.
Mr. Brickhouse. I might add that we did not fmd that it was
any problem for us to have dialog with OMB. I think, as I recall,
that decision was made in a matter of hours, if you will, from the
time we submitted the request.
Mrs. Morella. I see. I am just trying to understand the process
and the anticipation of what concerns would arise and whether or
not you have an extra layer to go through and how well it is
planned. Thank you.
In the interest of time, I will yield back, Mr. Chairman. Thank
you.
Mr. Mica. I thank the gentlelady, and recognize Mr. Horn from
California.
Mr. Horn. Thank you very much, Mr. Chairman. I have basically
two questions, and I want to followup on Mrs. Morella's question,
which was an excellent question in terms of a liquidity crisis, cash-
flow crisis, with regard to the debt ceiling.
One, Mr. Chairman, I would like to put a letter in the record
that a number of us wrote the President a month ago, that said if
we are serious about controlling the debt ceiling, we ought to freeze
nonessential travel, nonessential purchases, and deal with the not
absolutely essential workers.
Obviously, health care in the VA and others would be absolutely
essential workers, so you would not have to worry about that.
Perhaps that situation has passed. Perhaps it has not. I think it
is very clear, Mr. Munoz, that a debt ceiling shutdown would be a
lot more serious, I think, than what we've gone through. You would
not be making up for lost pay. You couldn't afford to do it. Am I
wrong on that? Is that your hunch or inclination?
Mr. MuNOZ. Sir, on the hypothetical that was posed, there is an
assumption that the debt ceiling would also create a shutdown pos-
sibility. The possibility of that is very small, because that would be
a discretionary call.
207
I am going to look to my legal counsel here, if he wants to correct
me, but once we have appropriations in place, we have a respon-
sibility to continue working. If there is a liquidity question, then
the question is as to whether or not or when you are going to get
paid, but we still have an obligation to continue working, and there
is an obligation of the government to pay.
There would not necessarily have to be a shutdown of govern-
ment operations.
Mr. Horn. Well, there is something, Mr. Chairman, you might
want to consider. It seems to me it is an important question and
you ought to give some guidance on that.
Let me get to my two basic questions, and I would like to ask
this of all of you, since you are under oath. Either directly or indi-
rectly, prior, during, or since the shutdown, did any member of the
White House staff influence what categories of workers you stated
were non-essential or essential, and that includes 0MB staff, who
said, "We are getting the word from the White House"? Anybody?
Let's just get a "Yes," "No" answer.
Mr. Broadnax. No.
Mr. Horn. No.
Mr. Robinson. No.
Mr. Horn. No.
Mr. Glynn. No.
Mr. Horn. No.
Mr. Brickhouse. No.
Mr. Horn. No. How about you, Mr. Muhoz?
Mr. MuNOZ. No.
Mr. Horn. No. Commissioner Chater?
Ms. Chater. No.
Mr. Horn. All right. You are probably the wrong people. We
ought to be asking the Cabinet officers that. [Laughter.]
Now, for the hearing record, I would just like to have filed, of
those on the staffs reporting to those at and above the bureau
chief, administrator level, institute head level, comparable levels,
for the categories such as public affairs, management, human re-
source personnel, general counsel, et cetera, the traditional staff
agencies, I would like to know, one, how many people are qualified
at that level, what percent were determined non-essential or essen-
tial?
Of those in direct contact with the customer taxpayer, such as
Social Security Administration and the Immigration and Natu-
ralization Service, how many were actually furloughed? I need an
absolute number of how many are there and then what percent
was essential, non-essential, in terms of direct customer contact.
Based on 30 hearings I've held this year on the Government
Management Subcommittee, there is no doubt in my mind that,
since President Eisenhower, regardless of party, we have had a
thickening of government, as Professor Light calls it, and we have
a bloated staff level at the commissioner, the bureau chief level, on
up, that you would not have recognized 30 years ago.
It does not relate to increased appropriations, it does not relate
to a growth in population. It just relates, regardless of party and
power, to the bloated nature of staff that, frankly, are crippling you
more than helping you.
208
I would like to get that in the record, Mr. Chairman.
Mr. Mica. Mr. Horn, how did you want them to respond?
Mr. Horn. I just want them to respond in writing.
Mr. Mica. OK.
Mr. Horn. We will put it in the record.
[The information referred to follows:]
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210
Mr. Mica. I think we could spend the rest of the day doing the
calculations here. [Laughter.]
I appreciate your understanding. As we wrap up this panel, I
have a couple of questions.
First of all, Mr. Glynn, under DOL, you estimated the cost at
$7.3 million. Was that for personnel alone? I ask that question, be-
cause each of you incurred costs and you paid people after the fact.
I notice that the Office of Personnel Management has released a
guideline as far as the subject of pay and leave treatment of em-
ployees affected by a lapse in appropriations, and this guideline al-
lows for payment of overtime not worked.
It is bad enough that they did not work in the first place, but
got paid, or were not allowed to work; but I wonder, Mr. Glynn,
was any of this $7.3 million paid in overtime?
Mr. Glynn. I am not aware of any, Mr. Chairman, but we would
be happy to double check.
Mr. Mica. Has anyone paid overtime since, according to these
guidelines, that we pay overtime for not working in the time that
we did not work in the first place?
[No response.]
Mr. Mica. I would like each of you to check that. I think it would
be interesting.
[The information referred to follows:]
The Social Security Administration has not paid overtime to any employee for
overtime work not performed during the furlough period.
Mr. Mica. Also, as far as VA is concerned, Mr. Brickhouse, it is
my understanding that you kept on all field people in the hospitals,
and there was no differentiation between different types of person-
nel activities there. For example, while you had some claims proc-
essors for disabled veterans who were not kept on, the gardeners
at the VA hospitals were, in fact, deemed essential.
Mr. Brickhouse. Congressman Mica, if I may, we did furlough
in excess of approximately 20,000 people in our health care delivery
system.
Mr. Mica. I have reports that gardeners and lawn care personnel
were kept on and claims processors for disabled veterans were fur-
loughed. Of course, I guess they were called back. Can you check
that for us?
Mr. Brickhouse. Sure. I would be glad to.
[The information referred to follows:]
Over the past 10 years, significant numbers of facilities throughout the Veterans
Health Administration have contracted out for their gardening and lawn care activi-
ties (i.e., services are provided by businesses in the private sector rather than by
government employees). Many of these contracts were already paid for, which al-
lowed contractors to continue to work. After the shutdown extended for several
days, depending on the part of the country involved, it may have been necessary
to call back either contractor or in-house personnel to provide maintenance required
to prevent loss of landscaping previously installed with taxpayer dollars.
Mr. Mica. I would like to know. Then, as far as PR shops, did
all of you keep your PR shops open or was there a decrease in the
staffing of the Public Affairs Offices? Mr. Broadnax.
Mr. Broadnax. There was a very, very sharp decrease. There
were several people kept to help the Secretary stay in touch with
the employees throughout the department on a daily basis.
211
Mr. Mica. You had some down. How about you, Mr. Robinson?
Mr. Robinson. There was a very sharp decrease.
Mr. Mica. Mr. Glynn.
Mr. Glynn. A very significant reduction.
Mr. Mica. Mr. Munoz.
Mr. Munoz. A significant reduction.
Mr. Brickhouse. Very significant reduction.
Ms. Chater. The same, a significant reduction.
Mr. Mica. OK. The other general question, I noticed that there
were a variety of plans. For example, in Social Security, you pre-
pared a plan for a 2-week shutdown, and it seemed like some of
you had a shutdown for a shorter period of time.
Was there any continuity? You did 2 weeks; is that correct?
Ms. Chater. Well, we started, in our contingency planning, sir,
with the notion that we could have a smaller number of people ex-
cepted in the beginning of the shutdown; and, not knowing, of
course, how long it would take, we made another plan, consistent
with our objectives, for what we might do at a later time.
While a 2-week duration was sort of a talking period, it was
never meant to be specifically contingent on 14 days, it was to be
what happened based on our experience.
Mr. Mica. You had a short-term and a longer-term?
Ms. Chater. That is about it, Mr. Chairman.
Mr. Mica. What about you, Mr. Brickhouse?
Mr. Brickhouse. In the VA, our initial plan was that the shut-
down would not go longer than 1 week and, as we have talked
about, that is why we started making changes.
Mr. Mica. We had some problems there. Mr. Munoz.
Mr. Munoz. We looked at short and longer term, and longer
meant beyond 10 days.
Mr. Mica. In your volume, Mr. Glynn, what did you plan for? I
haven't read the whole thing, but am going to take it home tonight
and go through it. Go ahead.
Mr. Glynn. As long as you don't ask me if I've read the whole
thing, Mr. Chairman. [Laughter. 1
We anticipated a shorter-term shutdown when we put the plan
together, although we had started thinking about the implications
of a longer shutdown as the shutdown unfolded.
Mr. Mica. This really is just for short-term. Mr. Robinson.
Mr. Robinson. As I testified, short-term longer-term, sir.
Mr. Mica. OK. Mr. Broadnax.
Mr. Broadnax. Short-term and long-term.
Mr. Mica. In your two-page summary, with a 30-page addendum.
Well, those are, I think, some of the questions that I had.
Oh, there is one other area, too. In multi-year funding, for exam-
ple in HUD, there are some programs, I think, that have multi-
year funding, and some of these, I understand, were closed down.
What was the rationale for that, where the funds were there that
they were closed down, anyway? Because you had the biggest close-
down, didn't you, Mr. Robinson?
Mr. Robinson. I understand that is the case, sir. Our thinking
was that we would apply the law in terms of property and safety,
and we attempted to do that.
212
Funding in many of these multi-year programs is done on what
we call a lock-box basis, so the recipients have a line of credit
against which they draw down funds, and so funds would have
flowed, over a period of time, out of these lock-box situations.
In a short circumstance, we would have been able to cover fund-
ing, or funding would have been covered through that lock-box
process.
Mr. Mica. You still closed them down, anjrvyay?
Mr. Robinson. The lock-box process requires us to maintain a
number of systems in order to do that and, in our longer-term proc-
ess, we were bringing back people to maintain those systems.
Mr. Mica. I think Mr. Fazio wants to talk to you later. The other
panelists, did you have any other areas where there was a continu-
ation of funding in a multi-year fashion?
Mr. Broadnax. In our case of Medicare, it is a trust fund, so the
trust funds were there.
Mr. Mica. You kept everything going in Medicare?
Mr. Broadnax. Well, no, we did not. In terms of the applications,
taking applications, initially we did not.
Mr. Mica. Then you changed?
Mr. Broadnax. We thought, if we go longer-term, we would
begin to take them.
Mr. Mica. OK.
Ms. Chater. For Social Security, I would answer the same way.
Mr. Mica. Yes.
Ms. Chater. We have a trust fund, of course, which we interpret
as an indefinite appropriation and, for our second program, the
Supplemental Security Income program, we are forward funded for
the first quarter of the year, so we could continue functioning until
December 31.
Mr. Mica. In some of the activities that have multi-year funding
or are self-funding, we should possibly look at those categories for
future reference in functions to be continued.
Mr. Moran. Excuse me.
Mr. Mica. Mr. Moran.
Mr. Moran. Following up on that, I appreciate the fact that I am
the only Democrat here, so I would make an urgent plea that we
at least extend the current continuing resolution that is currently
in effect for at least another month.
The reason for making it at least 30 days deals with several rea-
sons, but I think foremost is something that the chairman was get-
ting at, and that is the grant funding. It extends far beyond the
lives of Federal employees.
If, for example, we don't have adequate funding at the beginning
of the year, we would not be able to issue the grants for Medicaid,
Aid For Dependent Children, social services, foster care, adoption,
and so on. That is a matter of billions of dollars and, more impor-
tantly, millions of people who are wholly dependent, in many cases,
upon those Medicaid and cash assistance grants — the very poorest,
the very neediest in our country.
There wasn't a problem this time because, since it occurred in
November, the original or continuing resolution enabled you to pay
those grants out to the States October 1st, the beginning of the fis-
cal year.
213
The second quarter would occur as of January 1st and, if there
is not an adequate continuing resolution, then the lives of tens of
millions of people are going to be adversely affected.
I am both sending a message to my colleagues, but also raising
an issue that I think perhaps you should address, particularly Dr.
Broadnax, on behalf of the Department of Health and Human Serv-
ices, because those are probably the largest grants that go out to
States.
I don't know what happens if the AFDC payments are not made
and Medicaid and Title 20 and foster care and the like. That could
be a disastrous shutdown to the people who can afford it the least.
Dr. Broadnax, could you respond to that?
Mr. Broadnax. I agree with the Congressman's description. It
would be very, very painful for the recipients, but also place the
States in great difficulties, because they are our partners in terms
of administering many of the programs that you have described.
As I said in my formal testimony, this is something we hope to
avert at all cost.
Mr. MORAN. Thank you. The legislation that I referred to, that
I would hope we could get passed, that would keep Federal employ-
ees on the job in the event of lapsed appropriations, does not cover
this eventuality because, clearly, that would not provide adequate
funds for your grants and, while they may be on the job, in the ab-
sence of a continuing resolution, we clearly would have to suspend
those payments; and I don't see any way we could possibly pass
legislation that would get around that.
I have heard various versions of short-term continuing resolu-
tions. They don't share their entire strategy with us all the time.
In fact, we don't know, oftentimes, until the very last minute, what
the plan is. I would urge the leadership of this body to propose an
extended continuing resolution that gets us through early January,
so that those grants can be made.
With that point, maybe we should move on to the next panel, Mr.
Chairman.
Mr. Mica. I thank the gentleman. Mrs. Morella has requested
one additional question.
Mrs. Morella. Thank you. Right. I just wondered, Mr.
Broadnax, since I talked about medical research in my opening
statement, if you might tell us about what research activities did
continue during the shutdown, and how the determination was
made in terms of what research activities should be continued or
not.
Mr. Broadnax. First of all, Congresswoman, let me say that our
approach to particularly the NIH and the National Institutes was
to discuss, of course, the broad guidelines with the scientific and
medical leadership there, but to have those best qualified, then, to
guide our hand, or to guide the process, if you will, in terms of im-
plementing those guidelines as related to the various institutes and
the research taking place therein.
Where research was in progress and, to cease or to shut that re-
search down it would have been destructive to it, arrangements
were made to keep it going. It was on a case-by-case basis that
those decisions were made. The attempt was not to be destructive
214
to any research or trials or so forth that were in progress during
the shutdown, so those would have been kept going.
Mrs. MORELLA. It was done on a case-by-case basis, which means
that it tends to be arbitrary, somewhat capricious, because I know
of a lot of researchers who were so frustrated because they really
felt they had to get back to the laboratory to continue with the re-
search which, again, was going to pay off in terms of health, as
well as financially, too.
I guess that is a problem that you face in the medical field.
Mr. Broadnax. It is a big problem. We do not like to be in the
position of looking at a researcher across his or her bench and say-
ing that we do not think that his or her research is important, as
we don't want to be looking across that bench saying that any of
our employees are not essential; but it is on a case-by-case basis,
and I said we do it in collaboration with the scientific and medical
leadership within the various institutes.
Mrs. MORELLA. A mention had been made of trust funds for So-
cial Security. The Medicare trust fund, how would you feel about
using that for the new Medicare recipients or clients, because you
held off signing them up under the shutdown, right? Could you not
have used trust fund money for that?
Mr. Broadnax. Yes, we could. As I said before, we were about
to. Remember, I said we had a short-term and a long-term plan.
Mrs. MORELLA. Yes.
Mr. Broadnax. In the short-term, we were not receiving applica-
tions. We knew, in the longer term, because of the backlogs and the
destruction that now starts as a result of developing those back-
logs, that we would have to bring people back and start to take the
applications.
Mrs. MORELLA. I think Mr. Horn probably wants to continue
with that question. Just one final point. I just wondered, did you
all come up with some plans for those employees that were consid-
ered non-essential, even though we hate that term?
Because they would call my office, panic stricken, about "What
do I do if I need money for cash-flow, even though I have an assur-
ance I will be paid later? Do I file for unemployment?" What is the
status?
I know some of you mentioned hotlines were available. Did you
have anything that was kind of consistent, uniform that came,
whether it would be from 0MB or whether you put it together and
met together, in terms of discussing how to ease the panic that peo-
ple had who had to pay mortgages and tuition and whatever? Does
anybody want to comment on it?
Ms. Chater. Yes, I would like to respond to that, because I think
there were a number of initiatives that took place during this time.
First of all, for our employees, you have heard us testify that
many of the agencies set up a hotline for their own employees; and
ours was used to the maximum. We also prepared, on our own,
questions and answers about unemployment, when to file, whether
to file, the pros and cons of doing so. We made the applications
available to all of our field office employees throughout the United
States.
The hotline was for all 66,000 employees scattered all over the
country. I think it is important that we remember that not every-
215
one of our Federal employees reads the Washington Post or watch-
es C-SPAN or CNN, and so there really was a need for much com-
munication, particularly outside of the Beltway.
We did that, and I know that many of the agencies represented
here and elsewhere put together very detailed communication
plans for their employees. Most of us have employee assistance pro-
grams that are ongoing.
I know that we had many psychological problems brought to our
attention because of the worries about pajonents and so on, and I
think we provided the best we could for that particular purpose.
I would also like you to know that there is a group of us called
the President's Management Council that meets on a monthly
basis. It is chaired by Mr. Koskinen. In that President's Manage-
ment Council, those of us who are responsible for managing agen-
cies have an opportunity to talk with each other.
In addition to the formal kinds of things that you have been talk-
ing about today, there was a great deal of informal communication
between and among us: "What did you do since you were here
longer than I?" "How would you handle this?" "How do you deal
with patient care, because we're worried about our SSI bene-
ficiaries?" That sort of thing.
There was a great deal of concern, I think, expressed by the
agencies, and a wonderful informal system for sharing information,
as well.
Mrs. MORELLA. That sounds like a great idea, in terms of con-
tinuing the kind of networking and sharing ideas. It just seems as
though, maybe, from what you said, there also needs to be put into
effect some consistent policy for how to respond to the needs, real-
izing that some of them will be different from agency to agency, but
in general, so that you all have combined the information and have
it available.
Thank you, Mr. Chairman.
Mr. Mica. I thank the gentlelady and jdeld to Mr. Horn for one
final question.
Mr. Horn. Thank you, Mr. Chairman.
A number of my colleagues, including the chairman, have men-
tioned the subject of Medicare. I would just like to pursue a few
things on that.
As I understand it, new applications for Medicare had to be
turned away initially; is that correct?
Mr. Broadnax. That is correct.
Mr. Horn. Now, Medicare does operate from a trust fund that
we all contribute into. Was the processing of applications paid for
from that trust fund?
Mr. Broadnax. That is my understanding.
Mr. Horn. Would the Department of Health and Human Serv-
ices support legislation to make the costs of processing new appli-
cations payable from that trust fund when there has been a lapse
of appropriations, or do you need that authority?
Mr. Broadnax. As I understand it, by there being a trust fund,
that is why we were able to continue to operate because, under the
trust fund's authority, even though there was a lapse, we could
continue to use trust fund dollars.
216
Mr. Horn. What was the reason why we turned away Medicare
appHcations in the beginning?
Mr. Broadnax. By when we apphed the law, and the guideUnes
as we interpreted them. That is why I said earUer on there was a
short-term and a long-term plan but, in the initial application, if
it was going to be a short-term shutdown, under the guidelines, as
we looked at issues related to health, safety, and the protection of
property, it was appropriate to have the first instance shutdown
and, by that, turning away the applicants.
As time went on then, applying those same guidelines, that logic
then shifted where, under the same set of guidelines, it was then
appropriate to entertain bringing people back to process those same
applications.
Mr. Horn. Was that shifting logic helped by a call from the
White House?
Ms. Chater. No. No. Because we process applications for Medi-
care, I would like to say no.
Mr. Horn. You process them? OK. You are saying no, you got no
further guidance? It seems to me that is a fairly political hot potato
and, if I were sitting in the White House, I would say, "What nin-
compoop said we shouldn't take applications in this area?"
Ms. Chater. What you have to say about applications for Medi-
care applies, of course, to the fact that we didn't take applications
for disability benefits or for new Social Security benefits.
I like to think of it a little bit like a leaky roof. If your roof leaks,
you can put a pot under the leak and collect the water, and you
can do that for a few days but, as the leaks magnify, and pretty
soon your whole roof is leaky, then you have a very, very damaged
house.
The assumption that we made in the beginning was that the fur-
lough would be very short-lived and we could do that in a short pe-
riod of time but, based on our experience, we know that backlogs
accumulate and, over time, there is no way we could implement the
intent of the trust funds if we keep delaying. Therefore, the Phase
2, or the plans came into play for recalling more employees than
we had in the first place.
In the case of Medicare, we send out a notice to beneficiaries a
month or so before they turn 65, and we ask the people to come
in ahead of time to give us ample time to process the applications.
There wasn't an emergency. It's not as though somebody needed
Medicare tomorrow, because we hopefully would have them come
into the office a week or 2 weeks or a month ahead of time to file.
That was the nature of the taking of Medicare applications in our
offices.
Mr. Horn. You are sajdng, Commissioner, that you made the de-
cision to reopen the application line for Medicare; is that correct?
Ms. Chater. OMB, as far as I am concerned, reviewed our plans,
but I was responsible for making the decision about how to and
when to recall additional employees to implement the trust fund
charge.
Mr. Horn. What did your initial memorandum or planning docu-
ment say as to the extent of a short-run shutdown? Are we talking
3 days, 4 days, 2 days, what?
217
Ms. Chater. We were working on a theoretical short-term, long-
term, never expecting that we would have to think about a long
term. In the beginning, for planning purposes, I think some of our
staff started to operate on a "What would happen if this went on
for 2 weeks?"
After the first day, when we realized that we had 28,000 applica-
tions that we couldn't take and 200,000 telephone calls that we
couldn't answer, we knew that it could never, ever go on that long
if we were to, indeed, carry out the intent of the law.
Mr. Horn. OK. The original plan, that there is such a thing as
a short run, was simply in error; is that correct?
Ms. Chater. It was a short-term best guess based on some as-
sumptions.
Mr. Horn. In other words, as far as you are concerned, if we
went through this again — hopefully we won't, but if we did — you're
saying we should not be furloughing anybody that has anything to
do with these thousands of applications that pour into your admin-
istration, and that you handle, you say, for Medicare, that we
shouldn't even have a 24-hour furlough?
Ms. Chater. If we were to do this again, I would want to fur-
lough a very minimum number of our employees, because we are
now already behind; so it is not just the new cases that we
wouldn't be able to process, it is the ones that we are now working
on with increased productivity to make up for what we lost.
Mr. Horn. Yes. The short-term, long-term distinction really
makes no sense when it comes to this type of government oper-
ation; is that correct?
Ms. Chater. It made sense in the beginning.
Mr. Horn. I don't see that it made any sense. You knew that vol-
ume coming in every day. It hasn't changed, presumably, over the
years.
Ms. Chater. Well, one always suspects that a furlough would be
short-lived and, therefore, we can make do, because we only need
one bucket to catch the water in the leaky roof.
Mr. Horn. It is an interesting analogy, but it doesn't have any
relationship to reality is my conclusion, after hearing the leaky roof
approach.
It seems to me, if you go through this again, we shouldn't as-
sume it will be short. Unless the President signs on the appropria-
tions bill or the continuing resolution, it could be very long. How
do we know?
It seems to me, I would hope, the next time, we do not, on essen-
tial health services, shut down the operation, since there is a choice
to be made. I take it neither the President nor the Secretary of
HHS called and said, "What are you people doing over there?"
Ms. Chater. The Secretary of HHS wouldn't have called, in any
event, because we are now an independent agency.
Mr. Horn. I know you are independent.
Ms. Chater. However, I would say this to you.
Mr. Horn. She does have HCFA, still.
Ms. Chater. Yes, she does. My point is that one of the issues
that we have not really discussed in this whole problem has to do
with the interaction of agencies, the cooperativeness that we expe-
rience on a weekly basis. SSA can make some assumptions, but we
218
have to work cooperatively with the Department of Health and
Human Services, as we do all the time.
We have also had to be in contact with the Immigration and Nat-
uralization Service, because we do a lot with INS. There is a whole
cooperative element within government that we need to pay atten-
tion to, as well.
Mr. Horn. Just to get the record complete, when I asked you the
question initially, Mr. Secretary, you really didn't answer it. I take
it there was no influence — since the Medicare administration is
still in your agency — there was no influence from the President, the
White House, anyone else to get you to help unravel the mistake
of not taking applications?
Mr. Broadnax. As I said before. Congressman, I received no
phone call. We had a short-term, long-term approach. I understand
your concern and disagreement with that. I think we were operat-
ing off of history. That is all we had to guide us. History had dem-
onstrated shutdowns had been very short in duration. In the past,
some had been averted altogether.
That is why I said in my opening statement, I think the only way
we can be on solid ground here is to make sure we do everything
possible, both branches of government working together, to avoid
at all cost any shutdowns in the future.
Mr. Horn. We hope you are right.
Mr. Mica. I thank our panelists for their testimony today. We
may have additional questions, which we will submit in writing.
Time does not permit us to offer all the questions from both sides
of the aisle at this point.
I hope, Mr. Munoz, you will also tell the Secretary of the Treas-
ury, Mr. Rubin, that we are carefully watching his raid on the em-
ployee retirement funds, and also extend our regards to him for the
holidays. We will be watching that issue. You will hear more about
that later on.
I would like to thank each of the panelists for their cooperation
and close with a comment that President Clinton and Vice Presi-
dent Gore made to all the Federal employees after the closedown.
I will just quote one line: "You remain good people caught in what
Churchill called 'the worst system of government devised by the wit
of man, except for all others.' "
Thank you so much, and we will excuse this panel.
I would like to welcome our second panel today. We have in our
second panel the Honorable John Koskinen, Deputy Director for
Management of the Office of Management and Budget; we also
have Christopher Schroeder, Deputy Assistant Attorney General,
the Office of Legal Policy, the Department of Justice; and we have
Allan Heuerman, Associate Director for Human Resources Systems
Service, the Office of Personnel Management.
Most of the panelists have been before us previously. If we could,
have everyone go ahead and exit, and get order in the hearing
room.
Most of you have been before us before and know it is the custom
to swear in our witnesses. If you will rise and raise your right
hand.
[Witnesses sworn.]
219
Mr. Mica. Thank you. Welcome back, Mr. Koskinen, the Office
of Management and Budget. As you know, we try to have you ab-
breviate your statement, and we will make your entire comments
part of the record. We welcome you, and you are recognized.
STATEMENTS OF JOHN A. KOSKINEN, DEPUTY DIRECTOR FOR
MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET;
CHRISTOPHER H. SCHROEDER, DEPUTY ASSISTANT ATTOR-
NEY GENERAL, OFFICE OF LEGAL POLICY, DEPARTMENT OF
JUSTICE; AND ALLAN D. HEUERMAN, ASSOCIATE DIRECTOR
FOR HUMAN RESOURCES, OFFICE OF PERSONNEL MANAGE-
MENT
Mr. Koskinen. Thank you, Mr. Chairman. I may ask your indul-
gence to add a few seconds to my response, because I would like
to build into my oral testimony responses to some of the questions
that the panel has raised.
Mr. Mica. That is fine. Go right ahead.
Mr. Koskinen. I appreciate the invitation to appear today before
the House Civil Service Subcommittee to discuss the shutdown of
government service that occurred in the middle of November, be-
cause of the lack of appropriations.
The Federal Government shut down because neither a complete
set of appropriation bills nor a continuing resolution was enacted
in a timely way. The Constitution and the Antideficiency Act re-
quire that an agency only incur obligations to make payments
when the Congress has passed and the President has signed either
an appropriation bill for the agency or a temporary appropriation,
known as a continuing resolution.
I think at this point I would like to make a couple of points clear
that I am sure the committee understands.
First, as Mr. Munoz noted, the law is very clear that it is a viola-
tion of the criminal law to, in fact, misapply the Antideficiency Act.
Second, the Congress made it clear, after the last shutdown in
1990, by adding the word "imminent" before a "threat to life or
property," that the act is to be applied narrowly.
Third, I would like to note that it is not a matter of choice by
the agencies whether they might do something they would like to
do, nor can the agency respond to the interests of anyone. The
questions are, what are the legal guidelines, what are the applica-
ble guidelines, and how is the law to be interpreted and applied?
The failure to enact an appropriation bill has resulted in sub-
stantial cost to taxpayers and degradation of government services.
The clearest lesson to be drawn from the recent government shut-
down is that it should not be allowed to happen again. Disputes
over budget priorities should not be resolved in a crisis atmosphere
in which Federal workers and recipients of government services are
needlessly harmed.
With regard to the governmentwide impact of the shutdown, we
asked the agencies to submit preliminary estimates of the effects
of the shutdown on their operations and the resulting costs. The
monetary costs are currently estimated at more than $700 million,
with approximately $400 to $450 million of that being payroll costs
for furloughed employees.
220
Significant additional costs, that cannot be determined at this
time, include interest pajrments to third parties required under the
Prompt Payment Act and the Cash Management Improvement Act
when the Federal Government does not pay its bills on time. There
will also be additional personnel costs necessary to deal with the
backlog of work resulting from the shutdown.
As significant as the monetary costs are the denial of basic and
important services to the American public. Millions of Americans
were inconvenienced or will be delayed in the receipt of payments
and benefits to which they are entitled.
Some agencies and activities were already funded and, therefore,
were allowed to continue to function during the shutdown. For ex-
ample, the Department of Agriculture did not shut down, because
its appropriation bill had been enacted into law. The U.S. Postal
Service did not shut down, because it is funded through fees.
A major exception to the prohibition against incurring an obliga-
tion without an appropriation is for emergency actions to protect
against imminent threats to life or property.
For the record, I would like to clear up a very unfortunate use
of the terms "essential" and "non-essential," which, unfortunately,
we've continued to talk about this morning. These terms do not ap-
pear anywhere in the statute. I would emphasize that: these terms
do not appear an3rwhere in the statute.
When there are no appropriations, all employees are furloughed,
except for those performing activities that provide for national se-
curity, relate to the conduct of foreign relations, provide for con-
tinuing mandatory benefit payments and, most importantly, which
covers most of the workers we are talking about, are engaged in
emergency activities to protect life and property — for example,
medical care of inpatients and emergency outpatient care.
If the distinction were between essential and non-essential, no
employees would have been furloughed. In light of this subcommit-
tee's long interest in, and backing of, a properly supported work
force, I know that you will join me to ensure that, henceforth, the
shutdown distinctions are between emergency and non-emergency
employees.
As under past administrations, the Office of Management and
Budget was responsible for preparing for the possibility of a shut-
down. During the summer, in light of the delays in congressional
actions on virtually all appropriation bills, speculation increased
about a possible government shutdown due to a funding hiatus.
As a result, Director Rivlin asked me to lead a working group to
prepare for an orderly shutdown. This group was composed pri-
marily of 0MB staff but included outside representatives from
agencies such as the Department of Justice.
Director Rivlin asked the Attorney General for advice regarding
the permissible scope of government operations during a lapse in
appropriations because, as I noted earlier, after the last shutdown
in October 1990, Congress had amended the Antideficiency Act to
insert the word "imminent" before the words "threat to life or prop-
erty."
On August 16, 1995, the Office of Legal Counsel in the Depart-
ment of Justice updated the 1981 opinion of the Attorney General
interpreting the law pertaining to government operations during a
221
lapse in appropriations. On August 22d, Director Rivlin asked that
the heads of all executive departments and agencies send 0MB up-
dated contingency plans to deal with a funding hiatus based on the
1981 Attorney General's opinion as updated by the Department of
Justice.
There has been a tone of irony in this hearing. On the one hand,
we have been accused of planning too far ahead and providing too
much planning and, on the other hand, we have been accused of
not providing enough planning. Let me make a few things clear.
Chairman dinger referred to the July 26th advice to the agen-
cies from Director Rivlin. That advice clearly states, as does the
subsequent advice on August 17th, that the advice there to the
agencies was with regard to the ultimate impact of declines as a
result of appropriation bills that might be passed. Neither of those
guidances asked for updated shutdown plans. The actual request,
as noted in my testimony, came on August 22d.
Questions have been raised about inconsistences, across the
board. As noted by Administrator Chater, inconsistencies are built
into the operation of the government.
Social Security is forward funded, has a continuing obligation
and, therefore, historically, limited administrative functions have
been implied from those facts to be appropriate. VA benefits are
appropriated.
In the absence of an appropriation, there is no ability to imply
an exception for employees, unless there is an emergency. You
talked about the Civil Service Retirement Fund. The Civil Service
Retirement Fund continued to operate because, in fact, those oper-
ations were paid for by the retirement fund.
As we go across-the-board, the inconsistencies arise not because
of a difference in view of the agencies, but because of a difference
in the legal and financial situations of the programs being consid-
ered.
When agencies were asked to review their plans, they were told
to assume a short shutdown, witli the understanding that plans
would need revision in light of a more protracted shutdown, and
might need to be adjusted for unforeseeable circumstances.
0MB assumed that this was appropriate, because shutdowns,
since 1981, had averaged 2 days. With the participation of the De-
partment of Justice, we reviewed the plans for general conformity
with the Attorney General's opinion and governmentwide consist-
ency.
The working group also developed a common set of questions
with appropriate answers for distribution to the agencies. These
materials were integrated with those developed by the Office of
Personnel Management for employment issues, such as the impact
of furloughs on employees' pay, leave, and benefits.
Fortunately, a continuing resolution was enacted before the be-
ginning of the fiscal year, providing funding through November
13th. Again, we asked for plans on August 22d, planning for a po-
tential shutdown on September 30th, 6 weeks in advance.
I might note, in passing, that one of the reasons we were plan-
ning in advance was the Speaker of the House had made it clear
in April and June that his plan was, in fact, to shut the govern-
ment down.
222
However, by November 9th, only two appropriations bills had
been enacted for fiscal year 1996. Therefore, Director Rivlin in-
formed the heads of executive departments and agencies that it
was possible the Congress would not pass a second acceptable con-
tinuing resolution by Monday, November 13th.
With regard to Congressman Moran's very good question about
what happened on the 13th, on November 9th, there is guidance
the committee has a copy of from Director Rivlin advising the agen-
cies that they should review their shutdown plans and ensure "that
your employees are properly informed."
On November 13th, we advised the agencies that there was great
risk that there would not be a continuing resolution. I would re-
mind the committee, in response to Congressman Moran's question,
that the continuing resolution, or the appropriations in the continu-
ing resolution, did not expire until midnight Monday. We, there-
fore, were obligated through the night on Monday to see what the
Congress would do.
On many occasions in the past, the Congress has actually acted
the day after the appropriation.
The judgment was made that, rather than furloughing employees
and having no one here on Tuesday in the face of a potential con-
tinuing resolution, we should behave as we had historically always
done, which was to bring everyone in, with notification beforehand
as to who were going to be emergency employees and who were not
going to be designated emergency and, if there were no continuing
resolution on Tuesday morning, by the middle of the day, in an or-
derly shutdown, activities would be shut down and those would, in
fact, be obligations incurred by the government for the employees
through the time that they spent working on that day.
On the morning of November 14th, Director Rivlin advised the
agencies to proceed with the shutdown in the face of the absence
of a continuing resolution.
As the shutdown continued for an unprecedented period of
time — and I think that is one of the things this committee should
bear in mind, that Congress had never in history caused the gov-
ernment to shut down for more than 2 working days — by the time
we got to Thursday and Friday, we were in uncharted, unprece-
dented history. The Congress, for the first time, had shut the gov-
ernment down for a period of 4 working days, heading into the
weekend.
As the shutdown continued, agencies were asked by 0MB to re-
view the implementation of their plans in case of developing emer-
gency situations. As a result, on Friday, November 17th, the Social
Security Administration and the Veterans Administration received
approval to call back a number of personnel to work on Monday,
November 20th. On Sunday, November 19th, HUD and the Depart-
ment of Defense announced plans to recall a number of other work-
ers to address developing emergencies.
I am sorry that Congressman Horn is not here. The question has
been raised, "Isn't it inconsistent to say that someone is not an
emergency employee on the first day and then, on the fifth day, de-
termine that they are?"
I think Administrator Chater's response is exactly right. The law
imposes a criminal fine and a criminal penalty on anyone who
223
over-interprets the act. It is logical to assume that what is an
emergency on the 1st day may not be an emergency on the 4th day
and, conversely, what you can tolerate for a day or two becomes in-
tolerable with the passage of time.
There is no way in response to Congressman Horn's question,
that if we do it again, we will plan on a day-by-day basis if there
is a shutdown and, for the first 2 or 3 days we will, in fact, have
a shutdown, depending upon who are emergency employees, in
functions for the first 2 or 3 days.
If we go for a longer period of time, I would expect that the agen-
cies would continue to monitor and review their plans and, after 5
or 7 days, we would have additional determinations made as to
who is now an emergency employee and who is not an emergency
employee.
In some areas like parks, you may have an emergency activity
for the first 3 days, shutting the parks down, at which point you
then can have those employees furloughed because they are no
longer engaged in emergency activities.
Therefore, I think it is important to bear in mind that it is not
a sign of inconsistency on the part of the agencies that determina-
tions continue to be made, especially as we move into unprece-
dented territory. If we started again, I think that we would find,
in the cases of HUD and other places, that for the first day or two
we could tolerate the situation in a way that we could not tolerate
at the end of 5 or 7 days.
You asked how our determination would differ if the lapse of ap-
propriation were to last another 10 days, 30 days, or even 90 days.
I would like to stress — and I cannot stress it too hard — that a shut-
down of more than 2 weeks would be so disruptive that it should
not even be considered.
In such extreme circumstances, the hardship to all Federal em-
ployees— emergency and non-emergency — as well as military per-
sonnel, all Federal contractors, grantees, and anyone else dealing
with the Federal Government, with the exception of recipients of
certain mandatory benefits, none of whom would receive payment,
would be without precedent.
Again, I would remind the committee that there is an assump-
tion that, if we bring back a furloughed employee to perform an
emergency function, that that solves the problem.
As we noted on that weekend, we were about to move beyond a
situation of who were emergency employees and who were not, and
deal with the situation that the government had no money to pay
either the emergency employees or the non-emergency employees,
was about to have no money to pay the military employees, was
about to not have money to pay any bills that were not subject to
appropriation.
The Antideficiency Act does not allow us to make payments. The
Antideficiency Act, in emergency circumstances, only allows us to
incur the obligation to have workers and contractors performing
emergency activities. We have no authority to pay them. We have
no funds to pay them, because of the lack of an appropriation.
Mrs. MORELLA [presiding]. Mr. Koskinen, your testimony is very
valuable to us, but we only have about 6 minutes to vote.
Mr. Koskinen. Can I just close, then, with my last sentence?
224
Mrs. MORELLA. I will let you close with the last sentence, and
then we will recess for 15 minutes.
Mr. KOSKINEN. Shutting the Federal Government down is a seri-
ous matter, with substantial costs and significant dislocations for
the American public. For more than 200 years, major budgetary is-
sues between the Congress and the executive branch were settled
without major disruptions in government operations.
Our goal should be to emulate that minimum standard of suc-
cess. If that goal is unattainable, we should at least not subject the
country to another shutdown this year.
Thank you, Madam Chairman.
[The prepared statement of Mr. Koskinen follows:!
225
TESTIMONY OF
JOHN KOSKINEN
DEPUTY DIRECTOR FOR MANAGEMENT
OFFICE OF MANAGEMENT AND BUDGET
BEFORE THE
CIVIL SERVICE SUBCOMMITTEE
OF THE
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
HOUSE OF REPRESENTATIVES
December 6, 1995
Chairman Mica and Members of the Subcommittee:
I appreciate the invitation to appear today before the House Civil Service Subcommittee
to discuss the shutdown of government service that occurred in the middle of November because
of lack of appropriations.
The Federal government shut down because neither a complete set of appropriations bills
nor a continuing resolution was enacted in a timely way. The Constitution and the Anti-
Deficiency Act require that an agency only incur obligations to make payments when the
Congress has passed and the President has signed either an appropriation bill for the agency or a
temporary appropriation known as a continuing resolution. This failure to enact appropriations
bills resulted in substantial costs to taxpayers and degradation of government services. The
clearest lesson to be drawn fi'om the recent government shutdown is that it should not be allowed
226
to happen again. Disputes over budget priorities should not be resolved in a crisis atmosphere in
which federal workers and recipients of government services are needlessly harmed.
Government-wide Impact of Shutdovm • •
We asked the agencies to submit preliminary estimates of the effects of the shutdown on
their operations and the resulting costs. The monetary costs are currently estimated at more than
$700 to $750 million with ^proximately $400 to $450 million of that being payroll costs for
furloughed employees. Significant additional costs that caimot be determined at this time
include interest payments to third parties required under the Prompt Payment Act and the Cash
Management Improvement Act when the Federal government does not pay its bills on time and
additional persoimel costs necessary to deed with the backlog of work.
As significant as the monetary costs are the denial of basic and important services to the
American public. Millions of Americans were inconvenienced or will be delayed in the receipt
of payments and benefits to which they are entitled. The following examples of services delayed
or denied during the shutdown is illustrative only and does not represent a comprehensive audit
of the costs and impacts on services of the shutdown.
• The Social Security Administration was forced to turn away 1 1 2,000 claim applications,
212,000 requests for new or replacement Social Security cards, 360,000 individual office
visits, and 800,000 toll-free phone calls for information and assistance.
227
• 40,000 individuals were delayed in enrolling in Medicare.
• More than two million visitors were denied access to National Park Services facilities.
• More than 80,000 passport applications were delayed.
• More than 80,000 visas to visitors who spend an average of $3,000 on their trips were
delayed with a negative impact on airlines, hotels, and tourist facilities.
• Veterans Benefits offices were closed to "walk-in" veteran clients, pending claims for
compensation, pension, education and vocational rehabilitation were not processed, and
payments of GI Bill education checks and insurance death claims were not processed.
• Customer Services at the Intemal Revenue Service were halted for four days. More than
400,000 calls were not answered ~ built-up taxpayer demand will restrict the IRS' ability
to respond in a timely manner. More than 80,000 walk-in requests were not met and as a
result taxpayers were delayed in obtaining tax forms or other account assistance.
• Because verifications of Social Security numbers (at SSA) and immigrant status (at INS)
could not be carried out, processing of Federal college aid applications were delayed for
80,000 students and families.
228
• "Deadbeat Dads" received a four-day holiday as the referral of 80,000 cases to the
Federal Parent Locator Service was delayed.
• More than 1 0,000 home purchase loans and refinancings totaling $800 million worth of
mortgage loans for moderate-and low-income working families nationwide were delayed
by the closing of the Federal Housing Administration.
• More than 1 60,000 National Guardsmen did not drill over the weekend.
Government Functions which Continued during the Shutdown
Some agencies and activities were already funded and therefore continued to fimction
during the shutdown. For example, the Department of Agriculture did not shut down because its
appropriation bill was enacted into law, and the U.S. Postal Service did not shut down because it
is funded through fees. Basic fimctions of the Courts and the Legislature continued to function
as Constitutional arms of the government. The major "exception" to the prohibition against
incurring an obligation without an appropriation is for emergency actions to protect against
imminent threats to life or property.
For the record, I would like to clear up a very unfortunate use of the terms "essential"
and "nonessential." These terms do not appear anywhere in the statute. When there are no
4
229
appropriations, all employees are furloughed except those performing emergency activities that
(1) provide for the national security; (2) relate to the conduct of foreign relations; (3) provide for
continuing mandatory benefit payments; and (4) protect life and property, for example medical
care of inpatients and emergency outpatient care. If the distinction were between "essential" and
"nonessential," no employees would have been furloughed. In light of this subcommittee's long
interest in and backing of a properly supported Federal work force, I know that you will join me
to ensure that henceforth the shutdown distinctions are between "emergency" and "non-
emergency" employees.
OMB's Role in Preparation and Execution of Shutdown
As under past administrations, the Office of Management and Budget was responsible for
preparing for the possibility of a shutdown. During the summer, in light of the delays in
Congressional action on virtually all appropriation bills, speculation increased about a possible
government shutdown due to a fimding hiatus. As a result, Director Rivlin asked me to lead a
working group to prepare for an orderly shutdown. This group was composed primarily of 0MB
staff, but included outside representative from agencies, such as the Department of Justice.
Director Rivlin asked the Attorney General for advice regarding the permissible scope of
government operations during a lapse in appropriations because there had been an amendment to
the law which mandates shutdown during a funding hiatus. In particular, after the last shutdown
in October of 1990, Congress had amended the Anti-Deficiency Act essentially to insert the word
5
230
"imminent" before the words "threat to life or property." On August 1 6, 1 995, the Office of
Legal Counsel in the Department of Justice updated the 1981 opinion of the Attorney General
interpreting the law pertaining to government operations during a lapse in appropriations.
On August 22, Director Rivlin asked that the heads of all executive departments and
agencies send to OMB updated contingency plans to deal with a funding hiatus. The agencies
were guided by the 1981 Attorney General's opinion as updated by the Department of Justice.
When agencies were asked to review their plans, they were told to assume a short
shutdown, with the understanding that plans would need revision in light of a more protracted
shutdown and might need to be adjusted for unforeseeable circumstances. OMB assumed that
this was appropriate because shutdowns since 1 98 1 had averaged two days.
OMB, with the participation of the Department of Justice, reviewed the agency plans for
general conformity with the Attorney General's opinion and govemment-wide consistency. For
example, questions were raised about training activities across the government, including in the
Departments of Defense and Justice. The agencies that gather and publish statistics were told
that such activities were not within the excepted activities under the Anti-Deficiency Act.
Military hospitals and VA hospitals both had questions about whether elective surgeries were
excepted activities. In late September copies of the final agency shutdown plans were
transmitted to Congress.
6
231
The working group developed a set of commonly asked questions with appropriate
answers for distribution to the agencies. These materials were integrated with those developed
by the Office of Personnel Management for employment issues, such as the impact of furlough
on employees' pay, leave, and benefits. Where necessary, answers were reviewed with the
Department of Justice. The Office of Personnel Management provided guidance on "Main
Street" which is OPM's electronic bulletin board. 0PM also convened weekly meetings of an
interagency group of personnel officers and at least one member of my working group attended
the meetings to keep the interagency group informed of the working group's progress.
Also, as in the past, the Department of the Treasury concentrated on the problems of what
would occur if there were a failure to increase the statutory limit on the public debt. I would like
to take a moment to clarify the difference between a lapse in appropriations, such as the one that
began on November 1 4, and a debt ceiling crisis. These are two very different circumstances,
which operate independently of each other. When there is a lapse in appropriations, the
government is without authority to enter into obligations at all. That means no new contracts, no
grants, no new loans, no new processing of applications for most programs. The non-emergency
Government functions just stop. In contrast, a debt ceiling crisis occurs when the Government
hits the maximum amoimt that we are authorized to borrow. When this happens, the government
continues to operate but is unable to borrow more cash. As a result, the government lacks cash
to pay bills as they become due. This can be characterized as a liquidity crisis and is ( at least
analytically) independent of the question of the government's authority to enter into obligations.
232
Fortunately, a continuing resolution was enacted before the beginning of the fiscal year.
It provided temporary appropriations from October 1 through November 13. However, by
November 9 only two appropriation bills, the Agriculture Appropriations Act and the Energy
and Water Appropriations Act, had been enacted for fiscal year 1996. Therefore, Director Rivlin
informed the heads of executive departments and agencies that it was possible that Congress
would not pass a second acceptable continuing resolution by Monday, November 13. The agency
heads were asked to review their shutdown plans and ensure that their employees were properly
informed.
On November 13, Director Rivlin issued a memorandum to all department and agency
heads to be prepared to implement their shutdown plans on November 14 if no continuing
resolution was enacted. On the morning of November 14, she advised them to proceed with the
shutdown. As this shutdown continued for an imprecedented period of time, agencies were asked
to review the implementation of their plans for developing emergency situations. As a result, on
Friday, November 17, the Social Security Administration and the Veterans Administration called
back a number of personnel to work on Monday, November 20. On Sunday, November 19,
HUD and DOD announced plans to recall a niunber of other workers to address additional
developing emergencies.
You asked how our determination would differ if the lapse of appropriations were to last
another 10 days, 30 days, or even 90 days. I would like to stress that a shutdown of more than
two weeks would be so disruptive that it should not even be considered. In such extreme
8
233
circumstances, the hardship — to all Federal employees, emergency and non-emergency, as well
as military personnel, all Federal contractors, grantees, and anyone else dealing with the Federal
government (with the exception of recipients of certain mandatory benefits), none of whom
would receive payment — is without precedent.
The shutdown ended on Sunday, November 1 9, when the Congress and the President
agreed on acceptable extensions of the continuing resolution. That evening, department and
agency beads were contacted and told to instruct their employees to report to work on Monday
morning. Funding is now provided through December 15 for agencies whose fiscal year 1996
appropriation bills have not been enacted into law.
OMB's Own Shutdown Plans
In addition to reviewing the plans of other agencies, 0MB developed a shutdown plan
for its operations, originally as a contingency for a possible lapse in appropriations on October 1 ,
and subsequently updated for the lapse on November 14, 1995. Criteria were established for
"emergency activities" based on the following functional analysis:
core staff (Director, Deputies, Associate Directors, Deputy Associate Directors,
etc.) 47 staff;
reconciliation tracking and analysis (staff with specific responsibilities in the
reconciliation process) S3 staff;
9
234
appropriations tracking and analysis (staff with specific responsibilities on
unsigned appropriation bills) 77 staff; and
. ' technical support (support staff, specied economic and technical analysis staff) 45
staff.
0MB kept 222 staff on board doing the above "emergency activities," and flirloughed
314 staff. The staffing of excepted activities fluctuated slightly through the course of the
week (plus or minus 10 staff), based on the passage of an appropriation bill
(Transportation —signed on 1 1/15/95) and the work needed on reconciliation legislation.
A daily staffing plan was prepared each evening with approved excepted staff for the
following day.
C9ngl\i?i(?P
Shutting the Federal Government down is a serious matter with substantial costs and
significant dislocations for the American public. For more than two hundred years, major
budgetary issues between the Congress and the Executive Branch were settled without major
disruptions in Government operations. Our goal should be to emulate that minimum standard of
success. If that goal is unattainable, we should at least not subject the country to another
shutdown this year.
1 would be pleased to answer any questions that you have.
10
235
Mrs. MORELLA. The subcommittee will now recess for 15 minutes
for the vote.
[Recess.]
Mr. Mica [presiding]. I will call the meeting of the subcommittee
back to order, and we will resume. I thank Mr. Koskinen for his
testimony and we will get back to you with questions but, at this
time, I want to call on Christopher Schroeder, Deputy Assistant At-
torney General, Office of Legal Policy, the Department of Justice.
Excuse me if I have slaughtered your name a couple of times here.
I've said Schroeder.
Mr. Schroeder. That's very close, Mr. Chairman.
Mr. Mica. OK, good. We are glad to have you with us. You are
recognized and, again, if you want to submit a lengthy statement
for the record, we will do that without objection and, if you could,
summarize. The other Members will be returning, and are inter-
ested. Thank you.
Mr. Schroeder. Thank you, Mr. Chairman, and members of the
committee. This is the first time I am appearing before your com-
mittee, and I hate to start it with an apology, but I must. My testi-
mony arrived late this morning, contrary to your request for it
being here in advance and, when it arrived, it was without fairly
extensive appendices. I understand that those are now available.
Again, my apologies for the late arrival. It is inexcusable, and I will
not attempt to excuse it.
I will offer to be available for questions at the staff level or in
any other way you would think appropriate in order to accommo-
date the committee's interests.
Mr. Mica. That's fine. Just proceed. Thank you.
Mr. Schroeder. Mr. Koskinen has covered a number of the
points I make in my testimony, so let me just briefly summarize
the role of the Justice Department with respect to implementing
governmentwide application of the Antideficiency Act.
The Justice Department's function is to provide general legal ad-
vice, working with the Office of Management and Budget and, in
recent years, that responsibility within the Department has fallen
primarily on my office, the Office of Legal Counsel.
The advice we have given over the years, however, originated
with an Attorney General opinion in 1981, from then Attorney Gen-
eral Civiletti. His basic interpretation of the legal regime governing
a situation of lapsed appropriations has been in place since 1981
and has been consistently followed by the administrations of Presi-
dents Carter, Reagan, Bush, and now President Clinton.
Assistant Attorney General Dellinger of the Office of Legal Coun-
sel issued a memorandum on August 16th of this year in response
to a request from Director Rivlin to assess the implications of an
amendment to the Antideficiency Act that was enacted in 1990.
That was the occasion of the August 16th memorandum.
That memorandum largely reiterates the Civiletti opinion and its
views of the proper legal standards to be applied in this situation,
views which have been in place at least since 1981. It does amend
the Civiletti advice with respect to the interpretation of the emer-
gency exception, which was the subject matter that was addressed
in the 1990 amendments.
236
It is our function to provide legal advice, and the most significant
laws we must interpret are Article I, Section IX of the Constitu-
tion— as you noted, Mr. Chairman, the appropriations clause — and
Sections 1341 and 42 of Title 31 of the Code, the Antideficiency
Act.
The only point where I will be somewhat repetitious is to simply
reiterate the point that has been made a number of times already
this morning.
The structure of the Antideficiency Act is such that, in the situa-
tion of a lapse of appropriations, first, no funds can be withdrawn
from the Treasury and, second, there are limited exceptions pro-
vided in the act for the incurring of obligations, such as commit-
ments to pay employees who are not furloughed and who remain
at their posts. In no event in the recent shutdown were furloughed
employees who were coming in on that basis in a position actually
to receive a paycheck, if we went to a payday that covered periods
of the shutdown period.
We can obligate the government to honor those compensation
promises but, unless and until there is an appropriation, it would
not have been possible to meet the normal pay periods. Fortu-
nately, we have never confronted a payless or a partially payless
payday, because the matter has been resolved prior to then.
It is fundamental to note that, when the government is function-
ing in this period, it is functioning essentially on the basis of its
ability to make contractual obligations, and that ability is limited
to those categories that are defined under the Antideficiency Act as
what we refer to as excepted activities.
Nowhere is the concept of an "essential worker" or an "essential
function" found in any of those definitions of excepted activities.
What we do analyze are activities and functions to see whether,
under the facts and circumstances that exist, on a fairly case-by-
case, basis, there is a justification for an employee performing that
function.
Those circumstances can and do change over time which, as Mr.
Koskinen explained, is one of the reasons why employees might be
asked to perform a function at a certain day during a shutdown pe-
riod and not on others.
We used an example in one of our memoranda of truck or vehicle
maintenance not being an excepted function, assuming a short-
term shutdown but, obviously, if you were maintaining a motor ve-
hicle fleet to perform some otherwise authorized government activ-
ity, as time went on, you would have to perform some maintenance
on those vehicles, or they would become unsafe to a degree that the
protection of property or the safety of human life would be in-
volved, so that the longer a shutdown went on, the more likely it
would be that some agencies' motor pool would have to call mainte-
nance staff in to perform rudimentary services.
A contrary example would be the kind of situation some of the
large national parks may have faced, in which, although there was
no funding available to continue the operation of those parks, when
the lapse in appropriations occurred, there were still people in the
interiors of large parks like Yosemite or Yellowstone or the Grand
Canyon, and there was a rationale for Park Service personnel stay-
ing at their stations to ensure the safety of those individuals while
237
they hiked out of the park, which often can take a couple of days,
so that at the beginning of a shutdown, there would be a health
and safety rationale for maintaining some personnel, that would
then cease.
The facts and circumstances are definitely a factor that agencies
take into account, and that is one significant reason that plans and
staffing levels have to be updated and reassessed in light of the cir-
cumstances, or the best estimates and understandings of the cir-
cumstances that obtain at the time those decisions are made.
With that, I will conclude my remarks and be more than happy
to respond to any questions you may have.
[The prepared statement of Mr. Schroeder follows:]
238
TESTIMONY OF
CHRISTOPHER SCHROEDER
DEPUTY ASSISTANT ATTORNEY GENERAL
OFFICE OF LEGAL COUNSEL
DEPARTMENT OF JUSTICE
HEARING BEFORE THE
HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
SUBCOMMITTEE ON CIVIL SERVICE
ON GOVERNMENT SHUTDOWN
DECEMBER 6, 1995
Chairman Mica and Members of the Subcommittee:
Good morning. My name is Christopher Schroeder. I am a Deputy Assistant
Attorney General in the Office of Legal Counsel at the Justice Department. I am pleased to
appear before the subcommittee today to provide information concerning the Department of
Justice's role in implementing the Antideficiency Act.
Much of the responsibility within the Department for providing legal advice to
Executive agencies on this subject currently falls within the purview of the Office of Legal
Counsel. With respect to that role of the office, Assistant Attorney General Dellinger issued
a memorandum on August 16, 1995 to the Director of the Office of Management and Budget
("0MB"), Alice Rivlin, that to a very considerable degree restated the legal interpretation of
the Antideficiency Act rendered by then- Attorney General Civiletti in 1981. I have attached
that memorandum to my testimony.
239
2
Attorney General Civiletti's interpretation of the statute has been followed by the
administrations of Presidents Carter, Reagan. Bush, and Clinton. Mr. Dellinger's
memorandum did modify the contents of the Civiletti opinion in one respect, to take account
of an amendment to the AntideHciency Act that was enacted in 1990.
The memorandum reiterated the functions and activities of the Federal government that
may be maintained during a period of lapsed appropriations. In general, during such a
period, the Antideficiency Act permits the following categories of functions and positions to
continue: those funded through multi-year appropriations and permanent appropriations; those
for which there is express authority to continue during an appropriations lapse; those for
which authority to continue during an appropriations lapse arises by necessary implication;
certain functions and positions that relate to the discharge of constitutional duties and powers;
and those relating to "emergencies involving the safety of human life or the protection of
property." A more complete explanation of the functions that may continue also is contained
in Mr. Dellinger's testimony of September 19, 1995, before a joint hearing of the Senate and
House Budget Committees, which has been attached to my testimony.
240
3
I would like to emphasize that these are the only functions that the Antideficiency Act
permits to continue during an appropriations lapse. All other functions must cease and
federal workers who perform non-excepted functions must be furloughed, even though these
furloughed employees are essential. Let me be absolutely clear, the Antideficiency Act
makes no distinction between "essential employees" and "non-essential employees" or
between "essential fiincitons" and "non-essential functions." Furthermore, our legal advice in
no way called for agencies to make any such distinction.
In addition to the August 16 memorandum, the Office of Legal Counsel provides
ongoing advice to the Executive branch, including the Office of Management and Budget and
the President, concerning the legal standards that apply to Federal functions and activities
during the period of a lapse in appropriations. We were not involved in monitoring agency
compliance during the recent period of lapsed appropriations, nor was any other component
of the Justice Department.
The subcommittee also has requested information concerning the Department's
contingency planning and operational activities during the recent period of lapsed
appropriations. As these matters are within the primary responsibilities of the Department's
Justice Management Division, I have attached a document prepared by them that responds to
these questions.
241
4
Thank you for holding this hearing on an issue of great importance to the American
public and to federal employees. I would be pleased to respond to any questions the
subcommittee may have.
Attachments:
OLC Guidance on Government Operations in the Event of a Lapse in Appropriations
(Aug. 16, 1995)
Prepared statement of Walter Dellinger (Sept. 19, 1995)
Information on Contingency Planning and Operational Activities During Shutdown
OLC Guidance on Participation in Congressional Hearings During an Appropriations
Lapse (Nov. 16, 1995)
242
Mr. Mica. Thank you, and we will get back to questions. At this
time, I will recognize Allan Heuerman, Associate Director for
Human Resources Systems Service of the Office of Personnel Man-
agement.
Mr. Heuerman. Mr. Chairman and members of the subcommit-
tee, I appreciate the opportunity to be here today to discuss the Of-
fice of Personnel Management's role in the partial shutdown of the
Federal Government that began on November 14, 1995. The role of
0PM under a government shutdown is to provide agencies with
guidance and technical assistance related to the personnel manage-
ment aspects of furloughing Federal employees.
Last July, based on media reports about the possibility of a lapse
in appropriations, I, on my own initiative, instructed my staff to
begin updating OPM's furlough guidance, which was last issued on
August 15, 1990. On August 1, 1995, we distributed our updated
guidance to agencies.
This guidance was in the form of questions and answers which
covered a broad range of information on personnel management as-
pects of a furlough, such as information on procedures, the effect
of the furlough on pay and leave and retirement and health insur-
ance coverage, and other benefits. The guidance did not, because it
is not within OPM's authority, include guidance on the kinds of ac-
tivities which would be excepted under the Antideficiency Act dur-
ing the lapse in appropriations.
After issuing this guidance, we engaged in continuing discussions
with Federal agencies to help plan for a possible lapse in appro-
priations to assure that they were kept informed and up to date.
Our activities included: 0PM staff briefings for personnel at a
number of agencies; weekly meetings of agency personnel directors,
where we continued to address the personnel implications of fur-
lough as new issues arose; arranged for representatives from 0MB
to speak on budgetary matters relating to shutdown; for represent-
atives from the Department of Labor to discuss unemplo3mient
compensation issues; and for representatives from the Thrift In-
vestment Board to discuss thrift savings plan issues regarding
loans; we also distributed to agencies additional questions and an-
swers pertaining to new issues on the personnel aspects of fur-
lough; a Justice Department opinion on the 1990 changes to the
Antideficiency Act relative to determining excepted and non-ex-
cepted activities; and information on unemployment compensation
and thrift savings plans.
Prior to and during the shutdown, 0PM responded to individual
inquiries from agencies, employees, unions, and the media on per-
sonnel aspects of furlough. On November 17, we issued to directors
of personnel questions and answers addressing leave issues affect-
ing excepted and non-excepted employees.
On November 21, the day after the law authorizing retroactive
pay was enacted and employees returned to work, we issued guid-
ance on personnel documentation and on how to handle the pay
and leave of employees for that period.
Mr. Chairman, you asked about the assumptions made by 0PM
with respect to the length of the shutdown. We made no assump-
tions and none were needed with respect to our guidance. Our Au-
243
gust guidance provided information on furloughs of 30 days or less
and on furloughs of more than 30 days.
The reason for this distinction is that there are different provi-
sions in law governing furloughs depending on the length of the
furlough. Furloughs of less than 30 days require adverse action
procedures; furloughs of more than 30 days require reduction in
force procedures. Therefore, OPM's guidance was designed to cover
both scenarios.
If, as a shutdown continued, it appeared that it would last for
an extended period, we would encourage agencies to provide em-
ployees with additional information, such as on employee assist-
ance programs and financial counseling. However, our basic guid-
ance on the personnel aspects of furlough would remain the same.
You asked about the effect of a debt ceiling crisis on our guid-
ance. The debt ceiling limits the government's ability to borrow
cash and, therefore, our guidance dealing with furlough procedures
would not be affected.
You also asked for a description of those 0PM functions that
were continued during the lapse in appropriations. 0PM continued
to carry out its responsibilities with regard to administration of
Federal employee benefits programs, such as retirement, health
and life insurance, background suitability investigations, and man-
agerial and executive training.
These activities are funded out of either the retirement or insur-
ance trust funds, or OPM's revolving fund, and so were not affected
by the lapse in appropriated funds. 0PM also conducted activities
related to the orderly shutdown of both 0PM itself and other Fed-
eral agencies.
With regard to the costs associated with the furlough, we esti-
mate that the salary and benefits paid to 0PM employees who
were furloughed totals approximately $1,238,700. We also incurred
some incidental costs, such as printing, mailing, and travel in con-
nection with the orderly shutdown.
We are providing you with all of the information you requested,
including copies of all materials we issued in regard to the govern-
ment shutdown and all pertinent documents associated with the
shutdown at 0PM.
I want to thank you for the opportunity to discuss this with you
today, and I will be glad to respond to questions.
[The prepared statement of Mr. Heuerman follows:!
244
STATEMENT OF
ALLAN D. HEUERMAN
ASSOCIATE DIRECTOR
FOR HUMAN RESOURCES SYSTEMS
OFFICE OF PERSONNEL MANAGEMENT
before the
SUBCOMMITTEE ON CIVIL SERVICE
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
U.S. HOUSE OF REPRESENTATIVES
THE GOVERNMENT SHUTDOWN
December 6, 1995
MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:
I APPRECIATE THE OPPORTUNITY TO BE HERE TODAY TO DISCUSS THE
OFFICE OF PERSONNEL MANAGEMENT'S ROLE IN THE PARTIAL
SHUTDOWN OF THE FEDERAL GOVERNMENT THAT BEGAN ON NOVEMBER
14, 1995.
THE ROLE OF OPM UNDER A GOVERNMENT SHUTDOWN IS TO PROVIDE
AGENCIES WITH GUIDANCE AND TECHNICAL ASSISTANCE RELATED TO
THE PERSONNEL MANAGEMENT ASPECTS OF FURLOUGHENG FEDERAL
EMPLOYEES.
LAST JULY. OPM BEGAN TO UPDATE ITS 1990 FURLOUGH GUIDANCE IN
PREPARATION FOR A POSSIBLE LAPSE IN APPROPRIATIONS. ON AUGUST
245
1, 1995, WE DISTRIBUTED OUR UPDATED GUIDANCE TO ALL AGENCIES.
THIS GUIDANCE WAS EN THE FORM OF QUESTIONS AND ANSWERS WHICH
COVERED A BROAD RANGE OF INFORMATION ON THE PERSONNEL
MANAGEMENT ASPECTS OF A FURLOUGH. THE GUIDANCE INCLUDED
INFORMATION ON THE PROCEDURES NECESSARY TO PLACE EMPLOYEES
ON FURLOUGH, THE EFFECT OF FURLOUGH ON PAY, LEAVE,
RETIREMENT. HEALTH AND LIFE INSURANCE COVERAGE, AND OTHER
FEDERAL BENEFITS. IT IS NOT WITHIN OPM'S AUTHORITY TO PROVIDE
GUIDANCE ON THE KINDS OF ACTIVITIES WHICH WOULD BE EXCEPTED
UNDER THE ANTI-DEFICIENCY ACT DURING A LAPSE IN APPROPRIATIONS.
AFTER ISSUING THIS GUIDANCE, WE ENGAGED IN CONTINUING
DISCUSSIONS WITH FEDERAL AGENCIES TO HELP PLAN FOR A POSSIBLE
LAPSE IN APPROPRIATIONS TO ASSURE THAT THEY WERE KEPT
INFORMED AND UP TO DATE. OUR ACTIVITIES INCLUDED:
OPM STAFF BRIEFINGS FOR PERSONNEL AT A NUMBER OF
AGENCIES.
WEEKLY MEETINGS OF AGENCY PERSONNEL DIRECTORS
WHERE WE CONTINUED TO ADDRESS THE PERSONNEL
246
IMPLICATIONS OF FURLOUGH AS NEW ISSUES AROSE;
ARRANGED FOR REPRESENTATIVES FROM 0MB TO SPEAK ON
BUDGETARY MATTERS RELATING TO SHUTDOWN, INCLUDING
EXCEPTED AND NONEXCEPTED ACTIYITIES; REPRESENTATIVES
FROM THE DEPARTMENT OF LABOR TO DISCUSS
UNEMPLOYMENT COMPENSATION ISSUES; AND
REPRESENTATIVES FROM THE THRIFT INVESTMENT BOARD TO
DISCUSS THRIFT SAVINGS PLAN ISSUES REGARDING LOANS.
DISTRIBUTING TO ALL AGENCIES ADDITIONAL QUESTIONS
AND ANSWERS PERTAINING TO NEW ISSUES ON THE
PERSONNEL ASPECTS OF FURLOUGH; A JUSTICE DEPARTMENT
OPINION ON THE 1990 CHANGES TO THE ANTIDEFICIENCY ACT
RELATIVE TO DETERMINING EXCEPTED AND NONEXCEPTED
ACTrvrriES; and information on UNEMPLOYMENT
COMPENSATION AND THRIFT SAVINGS PLANS.
PRIOR TO AND DURING THE SHUTDOWN, 0PM RESPONDED TO
INDIVIDUAL INQUIRIES FROM AGENCIES, EMPLOYEES, UNIONS, AND THE
MEDIA ON THE PERSONNEL ASPECTS OF FURLOUGH. ON NOVEMBER 17,
WE ISSUED TO DIRECTORS OF PERSONNEL QUESTIONS AND ANSWERS
247
ADDRESSING LEAVE ISSUES AFFECTING EXCEPTED AND NONEXCEFTED
EMPLOYEES.
ON NOVEMBER 21. THE DAY AFTER THE LAW AUTHORIZING RETROACTIVE
PAY WAS ENACTED AND EMPLOYEES RETURNED TO WORK, WE ISSUED
GUIDANCE ON PERSONNEL DOCUMENTATION AND HOW TO HANDLE THE
PAY AND LEAVE OF EMPLOYEES FOR THAT PERIOD.
MR. CHAIRMAN. YOU ASKED ABOUT THE ASSUMPTIONS MADE BY 0PM
WITH RESPECT TO THE LENGTH OF THE SHUTDOWN. WE MADE NO
ASSUMPTIONS. OUR AUGUST GUIDANCE PROVIDED INFORMATION ON
FURLOUGHS OF 30 DAYS OR LESS AND ON FURLOUGHS OF MORE THAN
30 DAYS. THE REASON FOR THIS DISTINCTION IS THAT THERE ARE
DIFFERENT PROVISIONS GOVERNING FURLOUGHS DEPENDING ON THE
LENGTH OF THE FURLOUGH. FURLOUGHS OF LESS THAN 30 DAYS
REQUIRE ADVERSE ACTION PROCEDURES; FURLOUGHS OF MORE THAN
30 DAYS REQUIRE REDUCTION IN FORCE PROCEDURES. THEREFORE,
OPM'S GUIDANCE WAS DESIGNED TO COVER BOTH SCENARIOS.
IF, AS A SHUTDOWN CONTINUED, IT APPEARED THAT IT WOULD LAST
FOR AN EXTENDED PERIOD, WE WOULD ENCOURAGE AGENCIES TO
PROVIDE EMPLOYEES WITH ADDITIONAL INFORMATION, SUCH AS
248
INFORMATION ON EMPLOYEE ASSISTANCE PROGRAMS AND FINANCIAL
COUNSELING. HOWEVER, OUR BASIC GUIDANCE ON THE PERSONNEL
ASPECTS OF FURLOUGH WOULD REMAIN THE SAME.
YOU ASKED ABOUT THE EFFECT OF A DEBT CEILING CRISIS ON OUR
GUIDANCE. THE DEBT CEILING LIMITS THE GOVERNMENT'S ABILITY TO
BORROW CASH, AND THEREFORE, OUR GUIDANCE DEALING WITH
FURLOUGH WOULD NOT BE AFFECTED.
YOU ALSO ASKED FOR A DESCRIPTION OF THOSE 0PM FUNCTIONS THAT
WERE CONTINUED DURING THE LAPSE IN APPROPRIATIONS. OPM
CONTINUED TO CARRY OUT ITS RESPONSIBILITIES WITH REGARD TO
ADMINISTRATION OF FEDERAL EMPLOYEE BENEFIT PROGRAMS SUCH AS
RETIREMENT, HEALTH, AND LIFE INSURANCE; BACKGROUND SUITABILITY
INVESTIGATIONS; AND MANAGERIAL AND EXECUTIVE TRAINING. THESE
ACTIVITIES ARE FUNDED OUT OF EITHER THE RETIREMENT OR
INSURANCE TRUST FUNDS OR OPM'S REVOLVING FUND AND SO WERE
NOT AFFECTED BY THE LAPSE IN APPROPRIATED FUNDS. OPM ALSO
CONDUCTED ACTTVITIES RELATED TO THE ORDERLY SHUTDOWN OF BOTH
OPM ITSELF AND OTHER FEDERAL AGENCIES.
WITH REGARD TO THE COSTS ASSOCIATED WITH THE FURLOUGH. WE
249
ESTIMATE THAT THE SALARY AND BENEFITS PAID TO OPM EMPLOYEES
WHO WERE FURLOUGHED TOTALS APPROXIMATELY $1,238,700. WE ALSO
INCURRED SOME INCIDENTAL COSTS SUCH AS PRINTING, MAILING, AND
TRAVEL IN CONNECTION WITH THE ORDERLY SHUTDOWN OF OPM AND
OTHER FEDERAL AGENCIES.
WE ARE PROVIDING YOU WITH ALL OF THE INFORMATION YOU
REQUESTED, INCLUDING COPIES OF ALL MATERIALS WE ISSUED IN
REGARD TO A GOVERNMENT SHUTDOWN AND ALL PERTINENT
DOCUMENTS ASSOCIATED WITH THE SHUTDOWN AT OPM.
THANK YOU FOR THE OPPORTUNITY TO DISCUSS THIS TOPIC WITH YOU
TODAY. I WILL BE HAPPY TO RESPOND TO ANY QUESTIONS YOU MAY
HAVE.
250
Mr. Mica. Thank you, Mr. Heuerman and also the other wit-
nesses today, for their testimony. I have a few questions to start
out with, first for Mr. Koskinen.
Do you think that the Antideficiency Act is deficient?
Mr. Koskinen. Is which?
Mr. Mica. Deficient.
Mr. Koskinen. No, I think whatever modifications you make in
it, I think ultimately you are dealing with a provision of the Con-
stitution that provides that the executive branch cannot incur obli-
gations without appropriations.
The Antideficiency Act basically, as I noted in my testimony, pro-
vides some very narrow exceptions for having employees perform
emergency activities and other activities. It does not provide any
exceptions, and cannot, to the constitutional requirement that we
can't make any payments and can only incur very limited obliga-
tions in the absence of an appropriation.
If there is any deficiency, it is in fact in our inability to produce
either appropriation bills or continuing resolutions to avoid this
problem. As I said, we avoided it for 200 years. It is not quite clear
to me why suddenly it has become a term of art.
Mr. Mica. I think everyone who has testified today has said that
shutdowns have been sort of a way of life of governing the past 10,
12 years, given the fact that I guess it has occurred on at least 10
occasions. The difference, I think, in this particular shutdown was
the duration.
Mr. Koskinen. Yes.
Mr. Mica. One of the things that we heard from the previous
panelists was a variety in their plans for such an eventuality. Some
prepared, it seems, short term and long term.
Do you feel that the guidelines that you issued or were requested
to prepare were sufficient and how they responded was adequate?
Then we saw a great disparity between the plans. As I did in the
presentation of this 184 pages of Department of Labor versus the
2 pages and 30 page addendum for HHS.
What is your reflection on this?
Mr. Koskinen. My reflection is the agencies were advised that
they should plan for a short shutdown, in light of the history that
we had never had a shutdown for more than 1 or 2 days. When
an agency asked for more detailed guidance we said, as you heard,
that it would be in the range of 5 to 7 days.
All of the plans and all of our discussions with them con-
templated that, if the shutdown lasted longer, it would begin to
cause people to have to re-examine developing emergencies in their
activities. It did not surprise us and, in fact, we encouraged the
agencies as the first week drew to a close, to review their plans in
light of the unprecedented nature of the shutdown.
I would note, a question was raised about your other point about
the difference in the size of the plans. The agencies have been re-
quired to maintain shutdown plans since 1980.
The guidance from Director Rivlin on August 22d specifically
notes that the purpose of the review was for the agencies to review
those existing plans in light of the new legislation and the updated
Attorney General's opinion provided by the Office of Legal Counsel,
and make whatever changes seemed appropriate.
251
In the case of some agencies, they went back, as Labor did and
redid their plans entirely. The Defense Department, perhaps for
the first time in history, actually developed a shutdown plan. Other
agencies, like HHS, that had relatively straightforward questions
and pre-existing plans had an easier time of it.
It was left to the discretion of the agency to determine how much
work was necessary to update their pre-existing plans.
Mr. Mica. One of the other points that you raised, that one of
the reasons for different degrees of shutdown was, in fact, the legal
parameters that have been established. One of the areas mentioned
today, that stirred some controversy, has been Social Security.
I have this Department of Justice Office of Legal Counsel memo-
randum that was prepared August 16, 1995, and the subject is
"Government Operations in the Event of a Lapse of Appropria-
tions," and then it goes on. It is pretty lengthy, and it defines some
terms. I think you might be familiar with it.
It says, "Multi-year appropriations and indefinite appropria-
tions." Let me quote from it. It says: "Not all government functions
are funded with annual appropriations. Some operate under multi-
year appropriations and others operate under indefinite appropria-
tion provisions that do not require passage of annual appropria-
tions legislation."
I am not an attorney, but I would interpret that that they could
go on.
"Social Security is a prominent example of a program that oper-
ates under an indefinite appropriations."
Given this guideline, prepared from the administration, and then
the Social Security commissioner, who furloughed what, 60,000 em-
ployees— is this a difference in understanding of the legal param-
eters; or how do you interpret these actions?
Mr. KOSKINEN. The original opinion by Attorney General Civi-
letti, which drew the distinction and discussed Social Security,
talked about situations where you have ongoing continuing obliga-
tion authority, as Social Security does.
In those cases, it said, by implication one could assume that lim-
ited administrative functions, even though not funded, could con-
tinue. That is the basis under which, historically, Social Security
benefit checks have been issued.
The question is, beyond the limited administrative functions of
paying existing beneficiaries, can you, at the start, have an excep-
tion— because of an emergency activity or otherwise — for the proc-
essing of and the volume of work that is done in new applications.
Social Security's judgment in their plan, and it was very clear in
their plan, was that they did not think that, as Administrator
Chater said, for the first day or two, there was an emergency or
that that would be the kind of work that would be excepted under
the Attorney General's opinion.
On the other hand, it was clear, as Administrator Chater said,
once we got into the unprecedented shutdown because of the inabil-
ity to provide a continuing resolution, after several days, what had
been tolerable for a day or two became intolerable over time. It
began to create an emergency. That was their legal judgment
under the basic original Attorney General's opinion.
252
The original opinion talks about ongoing obligation authority and
limited functions derived by implication from that.
Mr. Mica. Do we need changes in the law to ensure that some
essential activities continue? It seems that there is adequate au-
thority because, in fact, some of these things were restored by fiat.
Mr. KOSKINEN. They were not restored by fiat. They were re-
stored because of a determination that an emergency had devel-
oped with the passage of time. That is not fiat.
Mr. Mica. Well, but someone must have the authority; the Presi-
dent or the administrator has to have that legal authority.
Mr. KOSKINEN. Correct.
Mr. Mica. It can't just suddenly appear.
Mr. KOSKINEN. No. That is why it is not fiat. There is a set of
legal guidelines that give you a determination if you determine
that a function, at any point in time is necessary because it is an
emergency.
Mr. Mica. We have basically a moving target, then?
Mr. KOSKINEN. Of course.
Mr. Mica. You don't need additional clarification; what is in law
is adequate?
Mr. KOSKINEN. The law has been changed in the past. It cer-
tainly can be changed going forward. As I say, the last change in
the law was an attempt to restrict and make it clear that the Con-
gress intended that the only emergency actions were imminent
threats to life or property. That was what we updated; and the
Congress has spoken, and said that this is to be narrowly defined.
A criminal penalty applies otherwise.
If the Congress decided to take another tack, that could be done
and there is nothing that would prevent them from doing that, if
the Congress so decided. Several proposals are before the Congress
to either provide permanent continuing resolutions or permanent
payments afterwards or even to redefine, in the Congress's judg-
ment, what an appropriate exception is. The Congress can do that.
Mr. Horn. Would the gentleman yield?
Mr. Mica. Yes, I will. I know you have some interest in this area;
and the witness referred to you while you were out of the room, so
I will yield.
Mr. Horn. The chairman has raised a fascinating question. As
the opinion of Assistant Attorney General Walter Dellinger, a dis-
tinguished scholar of the Constitution, goes on, he says, "In such
cases, benefit checks continued to be honored by the Treasury be-
cause there is no lapse in the relevant appropriation."
My query is, are employees of Social Security paid out of the
same trust fund that the checks are paid out of?
Mr. KOSKINEN. My understanding is no, that they are in fact
free-standing. They are paid out of an S and E account that is an
appropriated account.
Mr. Horn. When Mr. Dellinger wrote this multi-year appropria-
tion, you are sajdng that his definition that some operate under
multi-year appropriations and others operate under indefinite ap-
propriations provisions that do not require passage of annual ap-
propriations legislation, you are saying that it is one thing to pay
benefit checks, it is another to pay people; is that correct?
253
Mr. KOSKINEN. If you look on page 4 of his opinion, he says — and
referring back to the 1981 opinion, it said, "It contemplates that a
limited number" — I would quote — "a limited number of government
functions could continue." The next sentence says, "Examples in-
clude the check-writing and distributing functions necessary to dis-
burse the benefits that operate under indefinite appropriations."
That is what Social Security continued to do. There was never
a threat to existing benefits. The exception is to a limited number
of functions and the example has always been check- writing. The
issue facing Social Security was, for the first few days, would it be
a legitimate interpretation to say, "Will we have thousands of
workers necessary to process new applications?"
Their interpretation of that situation was that that was not an
exception created for emergencies until, with the passage of time,
we passed into an unprecedented area where, in fact, now we had
a backlog that was an emergency.
Going back to day one, if we started and you told me we were
going to shut the government down for 1 day, would Social Security
have people there, I would say our position would be to ask Social
Security, "Is that going to create an emergency?"
Their answer the first time was no; they would again, in light
of the experience, be able to answer it, but it would not be incon-
sistent for them to say, "We can tolerate the situation for 2 days;
we cannot tolerate the situation for 5."
Mr. Horn. Is it not true that the Financial Management Service
of the Treasury writes the Social Security checks?
Mr. KOSKINEN. That is my understanding, but actually, FMS
writes those checks in response to information forwarded by Social
Security.
Mr. Horn. Absolutely, but there is also a payment to the Treas-
ury by Social Security for that service, is there?
Mr. KOSKINEN. A payment for the check-writing function?
Mr. Horn. Yes.
Mr. KOSKINEN. At some point, surely.
Mr. Horn. That includes the employees in the Financial Manage-
ment Service that have to get those checks processed?
Mr. KOSKINEN. That is right. Both the FMS employees and the
Social Security employees necessary to process the benefits for
check-writing are excepted under the Attorney General's opinion.
Mr. Horn. Right, under the Bellinger opinion, those are ex-
cepted.
Mr. KOSKINEN. No, it is actually under the Civiletti opinion. It
has been the rule for 14 years.
Mr. Horn. Yes. OK. Well, I notice in your testimony, at the bot-
tom of page 2, you say, "The Social Security Administration was
forced to turn away 112,000 claim applications."
Everywhere else you say, in the case of Medicare, "40,000 indi-
viduals were delayed in enrolling in Medicare." You go on to talk
about the Park Service — another beef I have — "More than 2 million
visitors were denied access to the national park services"; "More
than 80,000 passport applications were delayed"; "More than
80,000 visas to visitors who spend an average of $3,000 on their
trips were delayed"; et cetera. Then you get down to customer serv-
ice, Internal Revenue, "were halted."
An.ion 07 . 0
254
Social Security, you say, "was forced." The only person that
forced them was the commissioner of Social Security that made the
decision and 0MB that backed her up.
Mr. KOSKINEN. Because they made a determination that, under
the law, the law passed by Congress, that was the action they had
to take. It goes back to the chairman sajdng if you would like to
change the law, that is open to you. That was an interpretation,
their judgment, in response to, as I say, the threat — as Secretary
Muhoz noted — that, if you make a violation, you are, in fact, sub-
ject to criminal penalties.
The fact that nobody has been prosecuted that I know of, because
we have never had a shutdown that lasted more than 5 or 6 days,
does not seem to me particularly of great comfort to anyone you are
asking to make these judgments.
Mr. Horn. Yes. Well, Mr. Chairman, we obviously have a clear
case where your committee can render a service to straighten out
the law on this subject one way or the other.
Mr. Mica. Again, a number of questions have been raised. I am
wondering whether we should file criminal charges against those
gardeners at VA that were non-essential.
Mr. KOSKINEN. It is my understanding that, as noted, that 10
percent of the 200,000 or 220,000 who work in the VA hospitals
were furloughed and, in fact, my understanding is non-emergency
activities like gardeners were furloughed. You will hear from VA,
but my understanding is they actually looked at that question in
terms of what were support services necessary to support the emer-
gency activities.
Mr. Mica. The same thing relates to PR shops. We have thou-
sands of PR people in the various agencies. Someone could make
a case for going after some of these folks that did keep their shop
open and that were non-essential and should be charged with a
criminal violation.
Mr. KOSKINEN. First of all, they would be non-emergency, not
non-essential. Second, you heard from six different agencies here,
all of whom said they made substantial cuts in their Public Affairs
Departments. They will all provide you with those numbers and, I
think, in fact, they are prepared to stand behind those.
I do not think it is fair to assume that there were violations of
that law.
Mr. Mica. The folks that we did hear from — there are other
agencies, and activities — I was stunned at the number of PR and
public information officers that we have throughout the vast num-
ber of agencies and activities.
One other final point is, we have gone through one shutdown and
it has been the longest one in history. Next Friday, we may be fac-
ing another one and it may be a very long shutdown.
I also heard testimony — and I am not sure, maybe you could de-
fine it — that your agency, 0MB, has requested an additional up-
date, based on the experience of bad experience. Was that the
10th? Someone said the 10th?
Mr. KOSKINEN. This Sunday evening we want them, so that we
will have the full week to review them.
Mr. Mica. OK, that's 5 working days, I believe. Do you feel that
is enough time? Because one of the agencies, HUD, said they had
255
asked for an opinion from you relating to some grant programs, in
the timeframe prior to the shutdown, and did not get a response.
Do you think that you can adequately respond, review their
plans, and get back to them by the 15th?
Mr. KOSKINEN. Yes. Again, as I said, the irony of this is, on the
one hand, we have been attacked for having spent too much time
in planning. I think the appropriate response is, the agencies have,
we think good plans. We have asked them to review them because
we think it is appropriate to be prepared for the following Friday.
We do also think that, even before this, we have asked the chief
financial officers, the President's Management Council, and other
interagency groups, to give us their response over the last month
of experiences they had — the "lessons learned," as we are calling
them — and we think we will be able to respond and we will be able
to run — if necessary, which we hope it is not — again an efficient
and effective shutdown.
It is not exactly one of the things we would like to be involved
in.
Mr. Mica. If you think you are having problems being charged
with doing too much or too little, you ought to join the new major-
ity in Congress. We get criticized for either doing too much or too
little, too.
Mr. MORAN. I think you ought to think twice about that. [Laugh-
ter.]
Mr. Mica. With those comments, I defer to the ranking member
for questions.
Mr. MORAN. Thank you, Mr. Chairman.
John, will 0MB support the legislation that I have introduced
that will keep Federal employees at work and get reimbursed after
the fact in the same way that 60 percent of Federal employees did
this last time?
Mr. KOSKINEN. Yes. We are in favor of whatever we can do to
provide continuity in management of the government and, to the
extent that we could avoid unnecessary shutdowns and termination
of important work, we think that would be an important step for-
ward.
Mr. MORAN. You would support H.R. 2184 that does that?
Mr. K0SKI^fEN. We have not cleared that bill through our normal
processes but, in my personal opinion, yes, we should support that.
Mr. MORAN. I am glad to hear that, although we have very little
time. I think that, if the White House was to support that, it would
help.
By my calculations, as of December 15th, we would only be wor-
rying about 10 percent of the Federal work force not going to work?
Mr. KOSKINEN. Our estimate is that, if the situation holds that
exists today, and there were a shutdown the end of next week,
without further appropriation bills passing, assuming the plans —
the agency plans — were consistent with their previous plans, we
would be looking at furloughs in the range of 330,000 to 350,000
employees.
Mr. MORAN. Why? That doesn't make sense.
Mr. KOSKINEN. You have several large agencies. You have State,
Justice, Commerce whose appropriation bill has not passed; you
have the VA, HUD appropriation bill has not passed; you have
256
EPA, which has not passed. As part of that, you have NASA. You
have a number of very large agencies that do not have appropria-
tions.
Labor, HHS I guess is the third. When you take the Labor De-
partment, HHS, State, Commerce, and Justice, EPA, Department
of Education and NASA, you have a fairly significant number of
agencies that will not have appropriations.
Mr. MORAN. What I did was to assume that VA, HUD will not
pass; Labor, HHS will not pass; Interior will not pass.
Mr. KOSKINEN. That's right. State, Justice, and Commerce.
Mr. MoRAN. State, Justice, and Commerce will not pass, is my
assumption, that it is going to get vetoed. It will come to us this
afternoon and, when it gets to the President, I think he will veto
it.
I made those assumptions, and then took the number of employ-
ees who were furloughed in each of those agencies, and that adds
up to something less than 200,000 Federal employees.
Mr. KOSKINEN. I would be delighted to share with you our cal-
culations.
Mr. MORAN. OK. I would very much be interested in that, be-
cause it certainly impacts not necessarily on what is the right pol-
icy, but it certainly impacts on the consequence of that policy, if we
are only talking about less than 200,000 versus three to four hun-
dred thousand.
Either way, I think this is the time to set in motion a policy that
would prevent the type of situation that occurred last month from
recurring, but I also think it is important to know the scope, the
depth of the impact of a lapsed appropriation.
I think it is terribly important for the White House to give some
expedited review of H.R. 2184 that would keep Federal employees
at work. I would like to ask you, would you anticipate a change in
the proportion of employees who were furloughed the last time the
government shut down versus those that you would furlough as of
December 15th if there was a recurrence of a lapsed appropriation
situation?
Mr. KOSKINEN. We can't answer that question until we hear back
from the agencies. Again, our process from the start, beginning in
the middle of August, has been to rely on the agencies and their
counsel and their managers to make the judgments. I assume we
will rely on them to make their adjustments according to what they
now know. Nothing has occurred that, thus far, would lead me to
conclude there will be significant changes.
Mr. MORAN. I understand that, but you need to hear from the
agencies. We just heard from the agencies, shall we say the com-
missioner of Social Security used the analogy of a leaking roof and
that, if it goes very long, you have to put far more people back to
work to ensure that you don't have a chaotic situation.
In the testimony from the deputy secretary of HHS, he indicated
that a second shutdown would necessitate more people being em-
ployed. That seemed to be consistent with the opinion of all of the
agency representatives we heard from this morning.
One reason might be that this could occur at a time when you
have to prepare for the issuance of major grants, like the AFDC
and Medicaid and social services, Head Start, and the like; so you
257
would need to have those people on board, which you didn't in
early November because they had just been issued for the first
quarter of the fiscal year.
I am assuming that there would be a change in terms of the pro-
portion of people furloughed and that, in fact, that change would
reflect the need to have a higher proportion of the work force on
board in the event of a second lapsed appropriation period.
I think we need to look at that, and I would like to see your fig-
ures, because they don't jibe with mine. It would appear that, at
the very most, you wouldn't have more than 200,000 people fur-
loughed out of a total of something over 2 million. Do you want to
comment on that?
Mr. KOSKINEN. I will share those with you. As I say, they are
subject to change, and that is why we have asked the agencies for-
mally to give us their updates. Our number is over 300,000; and
I will share that with you.
Mr. MORAN. OK. We need to look at that. What measures is the
White House or 0MB, in the sense of recommending to the White
House, taking to avoid the kind of chaos that occurred during the
first government shutdown, in other words, to create a different sit-
uation? How have you learned from the last experience to improve?
Mr. KOSKINEN. I guess, first of all, I would challenge the ques-
tion of whether it was chaos. Actually, as the one who fielded all
the calls for the 10 days and responded to the agency inquiries, it
appeared to us that, in fact, and the agencies' response was, that
the shutdown ran smoothly.
Some of your constituents, I understand, have given you anec-
dotal information otherwise. Our judgment is that the agencies
made the right judgments, and they informed their employees in
a proper time. Clearly, this time around, everyone who was a non-
emergency employee the last time will have fair notice of that.
As I say, it is not my goal in life to say "The trains ran on time,"
but the shutdown, we think, ran efficiently and effectively. We are
prepared to do it again if necessary.
We think it would be a major unfortunate and hopefully avoid-
able event, and we would hope that the Congress, if it cannot com-
plete the work on the appropriation bills by the middle of Decem-
ber, would pass a continuing resolution to allow the government to
continue to function.
Mr. MoRAN. I understand that. I would agree that "chaos" is too
strong a term. I think that 0MB did a commendable job in many
areas in preparing for this. It could have been a far more chaotic
situation had 0MB not been as well-managed and communicating
as well with the agencies, almost all of whom reacted in a respon-
sible, professional fashion.
A more appropriate term would be "imperfections" in the process.
I think, and I would hope that you would agree, that there were
some areas that could be improved upon were this to occur. The
first would be how do we prevent it from occurring, whether
through legislation that would keep employees at work — which I
have mentioned — or more advance notice, those types of things.
I don't want to put words in your mouth, but I would like to get
a sense of how things are going to occur on December 12th, 13th,
258
14th, and 15th versus how things occurred on — what was the date,
November 12?
Mr. KOSKINEN. 13th and 14th.
Mr. MORAN. Yes.
Mr. KOSKINEN. Well, as I say, I think to the extent your constitu-
ents have talked to you, in any particular agency, it is up to the
agency to make sure employees receive appropriate notification.
As I say, that problem is mooted to some substantial extent be-
cause the people who were non-emergency employees in November
obviously are on notice that they are likely to be non-emergency
employees in mid-December, subject to changes by the agencies.
We think that the guidance was clear. We need to make clear the
area in which we are working with the agencies to make clear is
this issue about funding activities, that if you have an ongoing obli-
gation authority, such as Social Security or programs that have
been adopted this year by the government, then you can, in fact,
make payments.
The question is, if there has been no obligation this year, it is
an obligation of prior years, then some agencies, a couple of agen-
cies decided they could spent S and E or incur S and E obligations
in this fiscal year, even though there was no congressional action
in this year.
Most agencies took the other tack, which was consistent with the
advice we gave, and we will make sure that there is consistent re-
sponse to that, and we will review the agencies' plans, because
again, to the extent that they think, on the basis of what their ex-
perience was the first time around, they want to make changes in
those plans, that is what we are encouraging them to do.
Our instructions from the start — and it goes back to the question
Congressman Horn asked — from the start, in August, with all the
meetings we had and all the guidance we gave, our instruction to
the agencies was to take the legal guidance, take their earlier
plans, and play it right down the middle. We did not reach to go
in one direction or another.
We think that — and I continue to believe — this is too serious a
matter to run the risk of being legitimately accused of having shut
down more of the government than is legally necessary, and that
decision has to be made initially by the agencies.
On the other hand, I understand several of the Members here
today have said there are a number of activities that people are un-
happy about having shut down. Congressman Horn talked about
being unhappy that people could not go to the parks. Again, those
are not judgments we make. Those are legal decisions that are re-
quired by the statute, and our role here is to simply apply the law
as best we can.
Mr. MORAN. I understand what you are saying. I do think,
though, that they are judgments. They may be legally oriented
judgments, but it is still a judgment call.
Another judgment call is with regard to when grants go out, be-
cause there is a certain amount of discretion in terms of when
grants are awarded. I would hope that the grants folks would be
busy right now making sure that there is a minimal disruption.
I don't think that they should be granting the whole year's fund-
ing level if that is not the custom, but I would hope that those
259
grants, that could go out within a period between say December
10th and December 30th, would go out on December 10th — I am
just suggesting that — to cause minimal disruption out in the field
with grantees.
I would think our objective would be to cause the least suffering
possible, the least disruption, the least chaos.
Another area where I would think there might be value in some
feedback is those employees who had to remain on the job might
have got a better sense of how many other employees and which
employees were also necessary, given the work that had to be han-
dled during that interim 4-day period. I would think that that
would result in some adjustment of the numbers of people fur-
loughed and who would get furloughed.
Has there been any of that type of adjustment that has gotten
back to you from any of the agencies?
Mr. KOSKINEN. My understanding is the agencies have done, in
some cases, very detailed reviews of the experience of the shut-
down. We have encouraged them all to do that, not necessarily to
plan for the 15th. One of the things we hope to leave behind is
more guidance and more easily accessible material, so the people
don't have to reinvent the wheel next time around.
The last time 0MB looked at shutdown plans, for instance, was
1985. We think that we will leave behind, both at the overall level
at 0MB and the Justice Department, clear records of what hap-
pened, but we are encouraging the agencies to do the same thing.
I think we will get more efficient at this although again, as I say,
in the long run, the bottom line is you have to understand that, in
these situations, the Congress has made a decision not to fund the
agencies. We do not have the funding. We do not have authority.
We are looking at narrowly defined exceptions, keeping emer-
gency activities going. It's not that anybody — and that is why, as
I say, the distinction between "non-essential" and "essential" evapo-
rates as you listen to the comments made across-the-board about
things that people think are very important that cannot be done
because, legally, we have not been authorized to do them.
The question really is, the only window in the statute are what
are the emergency exceptions for imminent threats to life or prop-
erty. There is a significant amount of important work that gets
done by the government.
If there is any positive to this shutdown, I think more and more
Americans discovered that, contrary to some of the assertions made
around about "Well, nobody noticed," that there were significant
amounts of activities that were not done because, in fact, the gov-
ernment had shut down.
Mr. MORAN. I appreciate what you are saying, and I also support
what you have been doing; but 60 percent of the Federal Govern-
ment doesn't fall under the category of imminent threat to safety
and protection of property. I don't argue with the legal basis of
what you're saying, but the interpretation was much broader than
what is in the law.
I prefer that interpretation, and I support it, and I think the ma-
jority of the Congress would, but I think it is a valid point to make
that there is a certain amount of judgment and discretion involved
here, and I would hope that we would continue to exercise that
260
judgment and discretion and, as I suggest, minimize the disruption
to people's lives.
We are not just talking about Federal employees. We are talking
about the lives of American citizens who pay their taxes and have
a right to have that money spent in the way that they have come
to expect and should be able to.
Mr. KOSKINEN. That's right. Again, the chairman's comment will
reverberate through the system and, as Mr. Muiioz noted, every
counsel in every department reminds all of the people making
these judgments that it is, in fact, a statutory requirement with
criminal penalties.
I know the chairman was not necessarily totally serious but,
when you say, "Should we provide prosecution for people who kept
too many people in X, Y, or Z positions," a perfectly legitimate ap-
proach, but the answer is, you can't, there are judgments, but you
have to understand this is — as I have told the agencies — this is not
beanbag, this is actually serious matters that affect, as you say, life
and property, that affect the interests of the public.
It is one of those things we should bear in mind when we ask
questions like, and as the others have suggested, that we could
have a shutdown for 30, 60, or 90 days, and what difference would
it make? The difference it would make is, it would bring home even
more significantly, as I noted in my testimony, even after 10 to 14
days, the really catastrophic effects of talking about shutting down
the government.
We ought to not gratuitously reach out to create any more prob-
lems than we have to. But you have to understand that we are op-
erating against the backdrop of the Congress not providing author-
ization at all for any activities, except emergencies.
Mr. MORAN. I understand the backdrop. I have read the legal
analyses. I am just suggesting we exercise as much good judgment
as we are capable of, which is a lot of it, and we don't necessarily
maximize our capacity for good judgment in every situation all the
time.
I just have one quick question for 0PM. You have all the health
care plans, FEHBP. The open season is just closing. There is a lot
of switching that has been going on this year because of the in-
crease in premiums. Is there going to be any problem in getting
those affected on time by 0PM if there is a shutdown on December
15th?
Mr. Heuerman. No, there will be no impact, because, in terms
of December 15th, 0PM does have an appropriation, and so all of
our employees will be working.
Mr. MORAN. I thought they come from the agencies first, but I
guess they go directly to 0PM, and you can make the changes nec-
essary for the agencies by whom the people are employed?
Mr. Heuerman. Yes, I believe so; I believe that is the case.
Mr. Moran. You think you can? OK. Thank you.
Mr, Mica, I thank the gentleman. I think we are getting a clear
definition here, Mr, Moran, I think we can't jail the gardener, but
we can jail the VA administrator who told the gardener to go to
work.
261
Mr. MORAN. For those gardeners who may be watching this, I
don't think you are Ukely to be incarcerated any time soon. [Laugh-
ter.]
Mr. Mica. I yield to the gentlelady from Maryland.
Mrs. MORELLA. Three strikes, and you are out. I just wanted to
ask, perhaps Mr. Schroeder, I wondered if you might elaborate on
the issue of the interruption of the private economy, what the im-
plications are in a shutdown.
Mr. Schroeder. Well, in trying to assess what government func-
tions can legitimately stay in operation under the law when there
is a lapse in appropriation, one of the cases you confront which
raises this issue most starkly is the FAA air traffic controllers.
So long as planes are flying, those individuals are obviously per-
forming functions that are necessary to avoid imminent threats to
the safety of human life; and as long as you make an assumption
that they will stay operating, we believe there is a valid justifica-
tion under the law for keeping people in that kind of situation at
their posts, even when there is a lapse in appropriations.
It has been, from time to time, raised or speculated during prior
shutdown experiences that the only justification under the law
with respect to the FAA was to have them operate for whatever pe-
riod of time it took them to safely land all the planes that were
then aloft, so that after 3 or 4 hours, all the FAA employees in the
various air traffic posts around the country who didn't have appro-
priated funds should walk off their jobs because they didn't any
longer satisfy the emergency exception.
We thought, and Attorney General Civiletti thought, and it has
been a consistent interpretation of past administrations that, in the
situation of a short shutdown, it is legitimate to assume that pri-
vate activity over which the government doesn't have any direct
legal control will continue operation. So, instead of sending out a
warning to passengers all around the country, don't fly after the
first 3 hours of shutdown, because the FAA controllers aren't there,
we have made the other assumption, that we should assume that
that activity will keep going, and that was beyond the legal re-
quirements of the statute to literally close all of the commercial
and non-commercial air traffic in the country.
Mrs. MORELLA. How did you determine what Federal contracts
should be continued or held in abeyance during the shutdown? Ob-
viously, there is a tremendous impact on the private economy when
we have a shutdown. I am wondering how those determinations
were made.
Mr. Schroeder. Well, there again, the fundamental legal guid-
ance that we provide relates to drawing a distinction between con-
tracts for which there is funding and contracts for which there are
not.
Mrs. Morella. Right.
Mr. Schroeder. Under normal appropriations practice and
under the terms of the Antideficiency Act, where the funding is ab-
sent for the contract, there is no authorization for the agency to
continue incurring obligations during a period of lapse of appro-
priation. If a contract is funded with multi-year or no year or in-
definite appropriations, then those contracts can continue.
262
Mrs. MORELLA. So, other than the FAA, purely on the basis of
whether there is funding?
Mr. SCHROEDER. Excuse me?
Mrs. MORELLA. Except for the FAA, purely on the basis of wheth-
er or not there is an appropriation, whether there is any funding
for it?
Mr. KOSKINEN. That's right, with one small exception, and that
is, it is possible that contractors could be performing excepted ac-
tivities for emergencies.
You may have building guard contracts or others where there
may not be legal authority otherwise, as Mr. Schroeder said, to
continue the contract, but the function that they are performing is
an emergency function and, therefore, you can incur that obligation
going forward.
Otherwise, in the absence of funding, obviously, those contracts
terminate.
Mrs. MORELLA. Fine. Thank you, Mr. Chairman.
Mr. Mica. I thank the gentlelady, the ranking member and other
colleagues, for their participation today. I want to also thank our
witnesses.
First of all, we do have additional questions, Mr. Schroeder, or
Schroeder — I will cover my base there with both pronunciations.
Mr. Schroeder. I actually respond to either.
Mr. Mica. Either one? You should hear what I have to respond
to sometime. [Laughter.]
In any event, since we got your testimony later, we will have
some additional questions, probably from both sides of the aisle.
Mr. Koskinen, of 0MB, if you could send the subcommittee, as
soon as you get that, any revised plans from the agencies, we
would appreciate that, so we have an opportunity to review what
you are reviewing. Mr. Heuerman, if you have any instances of
overtime being paid, according to the memorandum which you is-
sued, the subcommittee would also like that. We will have some
questions on that and also, if you intend to keep this guideline, for
paying overtime.
Mr. Heuerman. I might just mention in that regard, Mr. Chair-
man, that that guidance is the same guidance that had been issued
back in 1986 and 1990, based upon the same statutory language
authorizing retroactive pay, which talks about paying people based
on their standard rate of compensation.
Mr. Mica. I think that might be something we want to look at,
so we will have additional questions. I appreciate your participa-
tion in the hearing as witnesses. It is a very serious business, gov-
ernment shutdown.
This subcommittee doesn't have the authority or the charge to
determine whether or not there will be a shutdown, but we cer-
tainly have the responsibility, if there are shutdowns to determine,
one, how we are prepared for it; two, what we have done in the
past and what we are preparing for in the future; and also that we
act in a responsible manner, both for the public who depend on
these services and benefits and activities, and also to fulfill our re-
sponsibility as Members of Congress.
We thank you for your participation. Yes?
263
Mr. Horn. I would like to just say one last word. I think the im-
pression has been given that we have been looking for finding
fault, because this was a hearing to determine how the shutdown
was implemented.
It would be appropriate for the last word to be one of congratula-
tions to the gentlemen here, particularly, and the agencies they
represent, in particular to Mr. Koskinen, who was responsible for
the operation of the government shutdown from OMB. He has the
management section of OMB, and really did do an outstanding job.
I think by any reasonable measure you performed with brilliance
in a very challenging situation, so I would like to make that point.
Last, Mr. Chainnan, I want to ask you publicly, do you think we
could mark up a bill that would enable Federal employees to stay
on the job rather than stay off the job and get paid nevertheless?
Mr. Mica. That is one thing that we should consider, and we will
have the opportunity to hear from you and other individual Mem-
bers who have suggestions. There are some lengthy suggestions
and detailed suggestions for some improvements in the process.
I hope we can reconvene this subcommittee on that subject next
week and, hopefully, make the changes that are necessary in the
law. You don't have to be a political scientist to realize that there,
in fact, are some tremendous differences of opinion with this Con-
gress, this administration, with the new freshman class, to see that
we could have more instances of what we experienced just a few
weeks ago. -
We should be prepared for it and we will consider that legisla-
tion.
There being no further business to come before the subcommit-
tee, this meeting is adjourned. Thank you.
[Whereupon, at 12:50 p.m., the subcommittee was adjourned,
subject to the call of the Chair.]
[Additional information submitted for the hearing record follows:]
no Co. Govt Complex
725 St, John St.
3unNE.FL 32941-0007
264
Congrcsfsf of tfje Winittti ^tateg
^ouie of i^epregentatibed
mai\)inqfon, 2BC 20515
December 13, 1995
The Honorable John Mica
336 Cannon HOB
Washington, D.C. 20515
Dear John:
I want to share the attached letter with you for use in your hearing on the federal
shutdown.
I have received calls and letters from several of my constituents and others around the
country who received this letter and were upset by the tone and the political nature of
it. They expressed to me that the President and the Vice President have no business
politicizing the federal workforce and trying to make political gains by distorting the
realities of the shutdown.
When I first saw this letter I believed it to be a hoax. I thought for certain that the White
House would not draft a letter of this nature and tone. I was shocked when my staff
confirmed with the Legislative Affairs Office of the White House that this letter was
indeed authentic. We were told that it originated in the Office of the Vice President.
I appreciate your efforts to expose the abuses of the Clinton Administration and hope
that this letter will assist you in this effort.
Again, thank you for your attention to this matter
Sincerely,
Dave Weldon
Member of Congress.
265
Open Letter to Federal Employees
front
President CUntoo and Vice President Gore
We are proud of the people who work for the federal govemsient Aay Fortune 100
company would be lucky to have luch a work fi>rcc. Your work makes all Americans
more ujk, ttte, and prosperous. We are glad you aie all back on die job.
We know it hasnt been easy fi>r you, waQderiogwfaeaandifyouwcaldgetyoiirnext
pay check. And mfiny of you hiid to bear the indisnity of bebg called "non-esaeotia],''
— lomc by govcnuDcat oitic^ some even by yoor own supervisors. Calling
fiirioagbedworksraaoo-esieatial is deq>lyof&nsive and just plain wrong. Tbelaw
fixoed OS to fiirioagh 800.000 worken whose jobs were not of an emergency natnre.
The law uys oaOdag about "essentlaL''
NoooeoouIdsqrthatmet&calieseardiisnQo-essentia]. Or hd(»ig Americans fo Id
conege. Or mhahilitwfing a miUioo disabled Americans. Or supporting the wdowi
■nd orphans of vetetau. Or keq^g our drinking WMtersafb. Or recruiting new
volimtBers for fte armed fisrces. Oraayofth*IongBftofesseatialeovenunect
activities tfaat had to bo teinpoiaiily suspended. In the short turflxtbeywcra not
e(nergeaeies;ioth0lawprohibitBdthem. But &ey remain deariy easaatiaL
You an know tiiat the law under which most of the govenunent is operating expires
en December 15th. and the debate that led to the November shut down is not over.
We can^ promise yoo tiiat yonr jobs and your lives wont be tntemiptBd again. Too
much is at stake tot America. If you are held hostage again, we knowyou would not
want us to fbifbit tiie nation's fiiture as ruuom.
So, antU this issue is settled the way we settle great issues in a demooBoy — through
peacefiil debate and compromise — you remain good people caught in what Qmrchill
called "^e worst system of govmunent devised by the wit of man, eatcept fiar all the
others." And when it is settled, it is you federal workers who wiD once again cany
out the will of the people, who will once again make it possiblB for America to be the
winner. We salute you, and we thank you.
Bill Clinton Al Gore
November 22, 1995
266
DEPUTY DIRECTOR
FOR MANAGEMENT
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON. DC. 20503
February 5, 1996
The Honorable John L. Mica
Chainnan, Subcommittee on Civil Service
Committee on Government Reform and Oversight
U.S. House of Representatives
Room B371C Raybum House Office Building
Washington, DC 20515-6143
Dear Chairman Mica,
This is in response to your letter of January 18, 1996 (which arrived January 26, 1996) in
which you pose a number of questions about government shutdowns. I am pleased to provide the
following answers in the order of your questions.
1 . 0MB 's role in planning, implementing, and overseeing the shutdown was not
substantially modified between the November and December shutdowns.
2. With respect to changes in agency operating plans, enclosed is a copy of my letter
to you of December 22, 1995 which transmitted revised agency shutdown plans.
3. With respect to our assurance of adherence to OMB guidance, OMB program
examiners interacted with their agency counterparts in standard ways. There were no
substantial changes in these procedures during the second shutdown with the noteworthy
exception that some agency contacts were fiirloughed which made conmiunication more
difficult.
4. OMB does not have records for agency pay, including overtime or other premium
pay. The best source of such information is each individual agency.
5. OMB did not interrupt its own operations nor furlough employees in the
December shutdown because the relevant Appropriations bill had already become law.
6. There were no changes in OMB operations during the lengthy second shutdown,
but there was a significant delay in those activities that require interaction with shutdown
agencies. Forexample, preparation oftheFY97 Budget was significantly delayed. OMB
did not provide any revised guidance concerning a longer shutdown because the original
guidance asked agencies to review plans for both a short and a more protracted
interruption of agency operations.
267
7. Attached is a short document siunmarizing the estimated costs of the two
shutdowns. Please note that the attached document contains illustrations of the impacts
of the shutdown, but does not represent a comprehensive audit of all effects of the
shutdown.
8. Attached are two tables which provide estimates of the number of employees
furloughed and the number of employees working during the two shutdowns. In general,
funding for employees who worked and were paid during shutdowns came from cany-
over balances, enacted full-year appropriations bill, and fees which were already
appropriated or were otherwise available without further annual appropriation action.
9. Each agency is responsible for dealing with the backlogs of work which
accumulated during the shutdown while accommodating employees' use of annual leave.
OMB does not have special procedures for monitoring such agency activities.
I hope that the enclosed information addresses your questions and concerns. Please
contact me if I can provide you with any additional information.
-V> — ^
John A. Koskinen
268
January 19, 1996
EXAMPLES OF HARM DURING THE PARTIAL GOVERNMENT SHUTDOWNS
The two partial shutdowns of the Federal Government totalled 27 days. The overall cost of the
November 14-19 and December 16 - January 5 shutdowns is estimated to be over $1.4
billion and created numerous backlogs in government services that will, in many cases, take
months to overcome and will slow the delivery of futxare services.
The shutdowns hjid serious impacts on services including:
• Approximately 170,000 veterans did not receive their December Montgomery GI
Bill education benefits on time. Due to the shutdown, there are an additional 87,000
initial education benefit claims pending and 69,200 ongoing certifications pending. Over
200,000 additional veterans disability compensation and pension claims were added to
the backlog during shutdown, and each of the 350,000 existing claims in the system
experienced a 30-day additional delay in adjudication time. Shutdown resulted in an
additional pending 25,000 home loan claims and 8,000 life insurance actions. VA was
unable to provide over 1 5,000 personal interviews and 8 1 ,000 telephone interviews to
veterans, their survivors, or dependents. Currently, there are nearly 400,000 pieces of
unopened mail that are over five days old.
• Over 200,000 passport applications were not processed and are now backlogged as a
result of the shutdown.
• Pay for over three-quarters-of-a-million Federal employees was delayed. Most
affected employees received only half pay after the December 15 shutdown and were
facing the real possibility of no pay checks after that. This total includes both the
480,000 emergency workers who worked but could not be paid until Congress approved
funds (such as VA doctors and nurses. Federal prison guards, FBI, DEA, and other law
enforcement personnel), and the 280,000 non-emergency workers who were not allowed
to work.
• Approximately 7 million National Park visits were prevented.
• Over 2 million visits to the Smithsonian museums. National Gallery of Art, National
Zoo, Holocaust Museum, and the Kennedy Center were prevented.
• Approximately 5,200 small businesses were delayed in receiving SBA guaranteed
financing.
• During the shutdown, small businesses lost the opportunity to bid on an estimated
1,036 contracts valued at $244 million, because SBA's Surety Bond guarantee program
was not available. In addition, small businesses were unable to obtain final Surety Bond
269
guarantees for an estimated 306 contracts valued at $55 million.
• General assistance payments to about 53,000 Indian families and individuals were
delayed from the Bureau of Indian Affairs.
• The unemployment offices in Kansas shut down for two days and an estimated 1,000
to 1,300 newly unemployed people found the doors closed and were delayed in filing
their initial claims for unemployment compensation.
• About 1,300 workplace safety complaints went unanswered and 3,500 investigations
involving pension, health, and other employee benefit plans were suspended by the
Labor Department.
• There is now a backlog of 250,000 cases for the Federal Parent Locator Service which
helps States locate parents who are delinquent in their child support payments.
• Hundreds of Superfund toxic waste cleanups were shut down, delaying cleanup of
these sites and unnecessarily continuing exposure to dangerous chemicals for the citizens
living near them.
• Approximately $60 million in environmental fines, injunctive relief, and Superftmd
settlements against polluters were not collected, assessed, or negotiated.
• Over 1,000 export licenses valued at more than $2.2 billion in U.S. exports were
delayed because the Department of State and the Bureau of Export Administration were
unable to process export licenses.
• Many transactions in the telecommunications industry, including the Turner/Time
Warner and Disney/Capital Cities mergers, were held up partly because the Federal
Communications Commission (FCC) review process was shut down. The
Communications Act of 1934 requires FCC approval of spectrum license transfers which
occur in most of these transactions to ensure protection of the public airwaves.
• Over 30,000 FHA single-family home loans could not be insured by the FHA ~ either
forcing FHA home-buyers to delay their purchase or requiring FHA lenders to
temporarily carry the credit risk of such loans on their own books.
• Federal research: Public investment in science and engineering research yields high
aimual rates of return to society (well over 20 percent). During the shutdown about
$100-200 million of the National Science Foundation research grants were delayed, idling
some 2,000 researchers that help support this important public investment. In addition,
all panels scheduled to peer review research proposals were canceled delaying future
research funding for these highest priority projects. Similar impacts were felt at many
Federal R&D agencies, including NASA, NIH, Commerce, EPA, and others disrupting
research on AIDS, cancer, the environment, and advanced technologies.
• Important statistical releases that American businesses rely on were significantly
delayed by the shutdown ~ most importantly the Bureau of Economic Analysis' Gross
270
Domestic Product and Corporate Profits for the third and fourth quarters of 1995, the
October and November U.S. International Trade in Goods and Services, Personal Income
and Outlays for October through December and Retail Sales for December and January.
Also postponed were the scheduled releases on Import and Export Price Indexes, Durable
Goods, Housing Starts, and Single Family Home Sales. There were also delays in
releasing data on State and metropolitan employment and unemployment statistics, the
producer price index, and the consumer price index. The shutdown will cause delays in
future releases as well. The Department of Commerce estimates that its statistical
releases will not be back on a regular schedule until May, 1996.
Some 5,000 requests for data from the National Oceanic and Atmospheric
Administration's archives went unfulfilled due to the shutdown of the National Climate
Data Center. This impacted customers in commercial, legal, state and local, and research
activities. As a result, state and local business planners were forced to delay commercial
ventxires requiring environmental information, and private value-added environmental
firms could not get climate data to support their agricultural customers.
Preparation for the launch of the next NOAA Polar satellite (which provides data for
NOAA forecasts) was slowed down thereby increasing the likelihood of a gap in future
polar orbiting weather satellite coverage. If another shutdown occurs, NOAA would halt
further preparation activities. Failure to launch NOAA K (the next satellite in the polar
series) to replace a failed satellite, would likely result in the degradation of weather
forecasts by up to 1 5%.
The shutdown inconvenienced companies, universities, hospitals, and defense and
law enforcement agencies which depend upon the National Institute of Standards
and Technology's laboratory-based research and services. For example, NIST
provides in excess of 20,000 measurement samples and performs thousands of calibration
tests each year for more than 3000 large and small companies. Specific examples of
NIST services not provided include:
NIST had to delay verification of radiation dose standards through measurement
quality assurance programs which are used annually on over 600,000 cancer
patients and 26 million women who receive diagnostic mammograms.
NIST was unable to issue a new standard for lights and lamps (limien) that was
supposed to go into effect on January 1, 1996. The standard affects the U.S.
lighting industry - a multi-billion dollar/ year business (includes Sylvania, GE,
Philips, etc.). The shutdovm therefore resulted in delayed product delivery and
lost sales.
271
DEPUTY DIRECTOR
FOR MANAGEMENT
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, DC. 205O3
December 22, 1995
The Honorable John L. Mica
Chairman, Subcommittee on Civil Service
Committee on Government Reform and Oversight
U.S. House of Representatives
Washington, DC 20515-6143
Dear Chairman Mica,
I am in receipt of your letter of December 21, 1995 in which you indicate you have not
received copies of revised agency shutdown plans. Please find enclosed a copy of a letter from
me dated December 15, 1995 which transmitted a fiiU set of the revised agency shutdown plans
to you. Also enclosed is additional information we have received since then. You also requested
copies of any additional guidance forwarded to agencies by my office. Please find enclosed a
copy of a letter from me dated December 19, 1995 which previously transmitted a set of such
materials to you. In addition, please be aware that a similar set of such materials was faxed to
Edward J. Lynch of your staff several days ago. Enclosed is additional guidance sent since my
earlier letter to you.
These materials should address the first three information requests in your December 21
letter. I would refer you to 0PM or individual agencies for the fourth item, "a tabulation of
annual leave reports from all agencies for the month of December of each of the past five years,"
as 0MB does not collect such information.
Finally, you requested a briefing for the Subcommittee on Wednesday, December 27 at
2:30 p.m. I understand from a telephone conversation with Edward J. Lynch that was relayed to
me that this would be a briefing of Subcommittee staff. Unfortunately, I will be unable to brief
your staff on December 27. If parts of the Federal government continue to be shutdown next
week due to Congress's failure to pass a Continuing Resolution, I will be working on shutdown
related matters. Hopefully, the government will be reopened by that time and, in that event, I
will be out of town on a long planned family vacation. Of course, I look forward to meeting with
Members of the Subcommittee at a more appropriate time.
I hope that the enclosed information sent to you previously with the additional
information provided fully addresses your questions and concerns. Please contact me if you have
additional questions. '
^incerely,'->,
John A. Koskinen
272
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275
ONE HUNDRED FOURTH CONGRESS
Consre£(£( of ttje ^niteb States;
Jl^onit of j&epresfentatibeii
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
2157 Rayburn House Office Building
Washington, DC 20515-6143
January 18, 1996
M»<ORmr—(aaa 225-6061
J-ea:^^'<\ |\i-<'lqC-
The Honorable John A. Koskinen
Deputy Director for Management
Office of Management and Budget
Old Executive Office Building
Washington, D.C. 20503
Dear Mr. Koskinen:
I am writing to request that you provide additional information that will complete the Civil
Service Subcommittee's record related to the hearing on Wednesday, December 6, 1995, on "The
Government Shutdown: What's Essential?" We appreciate the additional information that you
provided in December, but we believe it necessary to supplement our record with additional matters,
including some related to the shutdown that began on December 16, 1995. Questions in this letter
will be in addition to requests that we will make of the individual agencies that also testified during
that hearing.
1 . Was OMB's role in planning, implementing, and overseeing the shutdown modified in
any way between the November and December shutdowns?
2. What, if any, changes in agency operating plans did OMB approve prior to the
shutdown that began December 16, 1995? The Subcommittee is particularly interested in any
information developed during the December 6, 1995, hearing that was considered in modifying
subsequent shutdown plans.
3. What steps has OMB taken to ensure that executive agencies adhered to its guidance?
Were any modifications of these procedures made during the second shutdown? If so, please
describe those changes.
4. Please provide the Subcommittee with an account of overtime and other premium pay
received by furloughed federal employees as a result of the two shutdowns. Please include an
estimate of the savings that would be realized by eliminating premium pay for periods when
work is not performed.
276
5. What steps did OMB take to interrupt its own operations during the December
shutdown? Please provide a description of the numbers of employees furloughed and the
fiinctions they performed as well as a description of persons retained and their functions. Please
describe the source of any fimding for continuing fiinctions if the fiinding is other than
appropriations.
6. During the December 6 hearing, you spoke disparagingly of the possibility of an
extended shutdown. What changes in OMB operations were occasioned by the length of the
December- Janucuy shutdown? Did OMB provide any revised guidance to other agencies to ease
adjustments from short-term to long-term interruptions of routine operations?
7. Please estimate the total costs, to your agency and the government, that you attribute
to the November 14-20 and the December - January interruptions of operations. Your
submission for the November shutdown should make any necessary revisions to the estimate
included in your December 6 testimony. Please describe any unusual costs imposed on agencies
or any other unanticipated consequences of this interruption of routine operations. Please
provide, too, an estimate of any offsetting savings associated with this interruption of routine
operations.
8. Please provide the Subcommittee with an estimate of the total niunber of federal
employees fiirloughed at each agency as a result of this inteiiuplion during botli shutdowns.
How many employees were considered exempt from furlough requirements? Please identify
sources of funding for any employees considered exempt from furlough requirements.
9. Testimony provided to the Subcommittee's December 6 hearing included several
references to backlogs of work that would accumulate during any shutdown. After the
December- January shutdown, the Office of Personnel Management issued guidance to agencies
regarding the management of accumulated annual leave resulting from the shutdowns. What
procedures will your office use to ensure that agencies accomplish the work accumulated during
furlough periods while accommodating employees' use of additional annual leave?
Thank you for your assistance in developing this information. We would appreciate a
response by February 2, 1996. Please direct your response to the Subcommittee office, Room
B371C Raybum House Office Building.
Chairman
Subcommittee on Civil Service
277
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE DEPUTY SECRETARY
WASHINGTON. D.C. 20410-0050
February 2, 1996
The Honored^le John L. Mica
Chairman, Subcommittee on the Civil Service
Committee on Government Reform and Oversight
2157 Rayburn House Office Building
Washington, D. C. 20515-6143
Dear Representative Mica;
Please find attached my responses to the questions you posed
in your January 18 letter. If I can be of any further assistance
to you or your committee please do not hesitate to contact me.
Thank you.
Enclosures
278
Question 1 Please describe any changes in planning,
procedures, and operations that your Department
made between the November and December- January
shutdowns. Please submit any revisions and/or
supplements to your department's shutdown plans.
In light of the substantial change between
shutdown numbers reported in the second shutdown,
what changes are contemplated regarding the
Department's definition of emergency functions?
Please provide the new legal reasoning that
supports this change from previous shutdown plans.
For the purposes of the initial November shutdown planning,
the Department had assumed that this shutdown would be of
relatively short duration, as all previous shutdowns had
been. A short shutdown in the middle of the month generally
means a delay in payments for public housing and community
development activities, but does not usually grievously
threaten life and property. Accordingly, we planned to keep
on board only a minimum staff to protect life and property.
As the duration of the shutdown grew, however, it was
apparent that as we approached the end of the month, since
HUD deals with physical property and life and death
situations, to continue the basic emergency functions, HUD
would require a greater staff presence .
Additional staff would be needed to open the automated
payments system for assisted housing; to provide for
emergency repairs and maintenance on HUD-held properties; to
renew and extend contracts to protect properties; and to
arrange for closing on mmultifamily FHA insured loans and
projects with legally binding commitments.
(A copy of the revised plan for the December- January
shutdown is attached as B . )
The legal reasoning for the revision to the plan is as
stated above: for a very few days in the middle of the
month, most Departmental operations can be briefly suspended
without creating imminent threat to life and property; after
a few days, however, financial systems that were paused must
resume, and Federal employees must be on the job in order to
protect life and property.
Question 2 . Please submit the numbers of persons furloughed in
each agency during the two shutdowns . For each
function which was subject to furlough during the
first shutdown, but exempted from furlough during
the second shutdown, please provide policy and
legal reasons supporting the decision to change
the status of the fxinctions.
279
During the first shutdown, a Departmental total of 11,231
employees were furloughed. During the second shutdown, 9,839
employees were furloughed.
Policy and legal reasons for each activity originally
suspended, but resumed over the longer term shutdown, are
provided in the revised shutdown plan sent to 0MB on
December 13, 1995, and enclosed in response to Question 1.
Question 3. Please provide a report, by agency and by
category, of all eimoiints and forms of premiiim pay
(overtime, night differential, etc.) that was paid
to agency employees who were furloughed during
each shutdown.
Our reports are done on a bi-weekly basis. The first
shutdown was three days out of a pay period. It would not
be possible to isolate the data pertaining to those days.
Data for the second shutdown shows that we paid $4,768.35 in
overtime pay for general HUD workforce employees and
$85,018.00 in overtime pay for the Office of the Inspector
General. In addition, we paid a small portion of $326.40 in
Sunday and night differential.
Question 4. Please provide a report, by agency, of the numbers
of furloughed employees who filed for unemployment
compensation during the shutdowns and amounts paid
to agency employees. Please describe any costs
that will be incurred by your Department as a
result of efforts to collect reimbursement of
these payments after routine pay is restored.
According to our records 778 employees applied for
unemployment compensation based on the November 1995
shutdown. Based on the December- January shutdown, 2,603
employees have applied.
We have no way of knowing any amounts paid to employees
until we receive reports from the States {not before
February 1996) .
The costs of collecting reimbursements of unemployment
benefits are, of course, an unknown. The Department of
Labor in a memorandum dated January 24, 1996 indicates the
information agencies need to provide to the States in order
for them to identify employees that have been overpaid.
Computer program specifications will be developed in order
280
to report this information to each State. Additional
administrative costs will be incurred, but the cost
associated with providing this information is unknown at
this time.
The memorandum further states that under some States' laws,
the burden of initiating the collection of the overpayment
from the employee rests with the agency. In those
instances, we will incur additional personnel and
administrative costs to perform this service, report back to
the various States, and follow up on future quarterly
chargeback listings to ensure that our account has been
adjusted to reflect the amount (s) collected.
Until we receive our quarterly listings from the 53 State
agencies, verify the charges that are unrelated to the
November and the December - January furloughs, we will not
be able to determine the volume and/or additional personnel
services costs.
Question 5. Please estimate the total costs to your agency
associated with the interruption of operations
during November and December- January . Please
provide descriptions of any unusual costs imposed
on the agency or other unanticipated consequences
of these interruptions of operations. Please
provide, too, an estimate of any savings
associated with these interruptions.
Total costs to the Department for salaries and benefits of
employees during the November shutdown were
$10,211,000. During the December- January shutdown, those
costs were $32,116,000, for a total of $42,327,000.
Unusual costs incurred during interrupted operations, and
unanticipated consequences of interruptions of operations,
include costs of cancelling training courses, travel
expenses incurred when employees were recalled to their duty
stations to be furloughed and printing costs incurred to
print furlough notices. No estimated savings were identified
for either shutdown.
Question 6. Please indicate the shutdown's impact on programs
fvmded through trust fluids, fees, carry over
funds, or other revenues not tied to annual
appropriations . Please describe any changes made
in implementing these programs during the
December- January shutdown.
281
The Office of Federal Housing Enterprize Oversight (OFHEO) ,
within the Department, is funded through assessments of the
enterprises it regulates, rather than through
appropriations. OFHEO operations were not affected by the
shutdowns and none of its staff was furloughed.
Question 7. Please provide staffing levels for all public
affairs offices in the Department during the
shutdown .
During the November shutdown the staffing level for the
Office of Public Affairs was 4 .
During the December/ January shutdown, the Office of Public
Affairs staffing level was 4 staff
Question 8 . Please provide a report of the n\iinber and furlough
status of political appointees, noncareer Senior
Executive Service personnel, and Schedule C
appointees, by agency during each shutdown.
November Excepted Furloughed
Noncareer SES personnel 18 2
Limited SES personnel 3
Schedule C appointee 32 52
December /January
Noncareer SES personnel 17 2
Schedule C appointee 31 4 5
Question 9 . Please provide estimates of the numbers of
employees and the amount of accrued annual leave
that will be restored by your Department as a
result of employees required to work during the
second shutdown. Please describe any other
effects that the second shutdown will have on the
administration of employees' leave programs.
' Based on revised guidance by the Office of Personnel
Management (0PM), dated January 17, 1996, agencies were
instructed to restore forfeited annual leave to each
employee who was not permitted, because of the lapse in
282
appropriations, to use annual leave that had been scheduled
in advance in writing according to 0PM regulations. This
includes both excepted and furloughed employees. Based on a
preliminary internal report, there is a potential for
restoration of 182,189.50 hours of annual leave forfeited by
4,132 employees. Procedures have been established to
request verification of the forfeited hours and a
certification by the employee's supervisor that the leave
was scheduled in writing by November 25, 1995 as required by
0PM regulations.
In addition, the shutdown greatly increased the number of
requests for guidance, as well as the workload required to
actually correct the leave records of employees. Also, a
number of employees approved as leave recipients under the
Voluntary Leave Transfer Program did not receive donations
of unscheduled leave subject to forfeiture, which otherwise
would have been donated.
Question 10 Several functions identified as subject to
furlough are listed in agency plans as funded
through multiple year appropriations. How was
this factor considered in your planning?
For HUD, most employees salaries are paid from Salaries and
Expense account . Program funding of departmental employees
is paid from a variety of other accounts. The decision to
furlough employees was based on the lack of funding in the
departmental Salaries and Expenses account . The only
employees for whom obligations were incurred to pay salaries
were those needed on account of imminent threats to life or
property, the conduct of the shutdown, or in the case of
employees of the Office of Federal Housing Enterprise
Oversight, those not paid from the departmental Salaries and
Expense account .
FH&EO
Staff in the Fair Housing Initiatives Program Division were
retained to approve payments to current recipients of Fair
Housing Initiatives Program (FHIP) funds (from the FY 93, FY
94 and FY 95 competitions) because the organizations funded
provide fair housing services to individuals who are subject
to discrimination in housing which can involve threats to
life or property of the individuals involved.
Question 11. During the November shutdown, HUD made statements
that approximately 2,500 mortgages would not be
processed each day under the FHA single family
mortgage insurance program. Yet, HUD, in its
September 7, 1995 shutdown contingency document,
the Department mentions on page 2, in part, that
certain exceptions include:
283
"activities essential to the preservation of the
essential elements of the money and banking system of
the United States."
In your opinion, is the FHA Single Family program
(Mutual Mortgage Insurance Fund) essential to the money
and banking system of the United States in that banks
and mortgage brokers depend on an efficient and
continual system to operate and process mortgage
applications?
Yes. However, FHA delegates to lenders the authority
to endorse loans and perform other insurance functions,
with the assistance of certain FHA systems and support.
After the loan closes, FHA reviews the application and
issues the mortgage insurance certificate (MIC) that a
lender needs to issue mortgage -backed securities and
access new capital . FHA does not review most insurance
applications before the loan closes. Thus, some FHA
lending could continue despite the shutdown. The
anticipated duration of the shutdown determined whether
it was essential for FHA to perform certain functions
to avoid an adverse impact on the money and banking
system.
If the answer is yes: Why did the Department, if it
deems the Mutual Mortgage Insurance Fund as essential,
shutdown and stop processing mortgage insurance
applications?
The November shutdown was not anticipated to last a
long time. HUD could not argue that the ability of FHA
to process mortgage insurance applications for a few
days was essential to the money and banking system.
Thus, FHA shut down its systems and did not issue MICs .
However, when the government shut down for a second
time in December and the prospect of reopening was less
certain, we kept certain systems open to make it easier
for lenders to close loans, assuming that FHA would
provide insurance (MICs) when it reopened. This
created difficulties in many cases, but did not
threaten the money and banking system. If the second
shutdown had lasted even longer, we would have had to
consider whether the operation of the money and banking
system required FHA to begin issuing MICs again.
If the answer is no: What does your Department
consider essential to the money and banking system,
notwithstanding GNMA payments, etc.?
See above .
284
Question 12 . What FHA single family mortgage insurance
activities were affected by the shutdovm?
See above .
Question 13. "Today's Focus at HUD, Thursday, November 30,
1995" states that FHA will process single family
mortgages during the November 14-19 shutdown.
What precipitated that change in policy from the
one published in the November 14 HUD Focus
statement?
The question misinterprets the November 14 and November 30
FOCUS statements . The later does not represent a change in
policy.
During the November 14-19 shutdown, FHA systems were down
and it did not process insurance applications. Some lenders
did, however, make some FHA loans. After FHA reopened, it
took steps -- announced on the November 3 0 FOCUS -- to be
flexible if a lender varied from standard procedures because
HUD was shut down. For example, lenders are supposed to get
a case number from FHA before beginning to process a loan
application. Since FHA' s systems were down during the first
shutdown, lenders could not obtain the case number. The
November 3 0 FOCUS statement said that FHA would accept for
insurance loans for which the lender had not obtained the
case number in advance .
Question 14 . When did the secretary agree to process those
applications, supposedly delayed during the
shutdown?
There was never any suggestion that FHA would not process
backlogged insurance applications when it reopened. When
the furlough ended, FHA immediately began processing the
backlogged applications for insurance.
Question 15. Were there any indications before November 30th
that the Secretary would allow FHA processing of
these types of loans, particularly during the
shutdown?
FHA never processed applications for insurance during the
shutdown. Nor did it suggest that it would not process
applications for insurance after it reopened.
Question 16. If there is another shutdown, what will be the
procedure for FHA mortgages?
285
In the January 6, 1996 continuing resolution, H.R. 1358,
Congress included language that authorizes all FHA single
family insurance activities through September 30, 1996,
regardless of whether the government is shut down again or
not .
Question 17. How many FHA single family employees were exempted
from furlough in each shutdown? On what basis
were these decisions made? What changes could we
anticipate if another shutdown were to occur?
During the first furlough, the excepted single family staff
were :
Headquarters 3
Field 0
Total 3
During the second furlough, the excepted single family staff
were :
First week - 12/18
Headquarters 3
Field 71
Total 74
Second week - 12/26
Headquarters 8
Field 71
Total 79
Third week
1/2
Headquarters 8
Field 116
Total 124
Decisions were made to except those staff necessary to carry
out the functions deemed to be essential to protecting
property and the banking and money system. Thus, there was
one person in almost every single family field office.
Single family systems and activities necessary to protect
property were also supported by excepted employees from the
Office of the FHA Comptroller and Office of Information
Policies and Systems.
As noted in question 16 above, all FHA single family
employees will be authorized to work, notwithstanding an
further government shutdowns, under the terms of the
Continuing Resolution passed on January 6th.
Ar\ ion OT _ in
286
Question 18 The Department Issued a statement on the first day
o£ the shutdown that homeless providers and AIDS
patients needing housing assistance would suffer,
or to quote:
-related to AIDS sufferers
"If the Government shut down, their funds
will be delayed and homeless AIDS sufferers
will be needlessly condemned to the streets."
-related to Homeless persons
"Homeless persons will suffer even more than
they do now, as many providers will not be
able to secure funds previously appropriated
for the shelter and services they deliver to
America's most needy people."
a. HUD'S September 7th shut down guidelines
exempt programs that affect safety and
health. Are these two programs [homelessness
and HOPWA] under the category of "safety and
health"?
b. If yes: Why did the Department make
statements and alarm the public that these
programs would not continue?
c. If no. Why not?
18a. Yes. The plan which was submitted to the Office
of Management and Budget on September 7, 1995,
identifies these program activities as ones that could
be continued in the event of a shutdown. On page 13,
the plan states, "Activities related to the
administration of ongoing McKinney homeless assistance
and HOPWA programs, since failure to do so would
imminently threaten the safety of human life by making
housing and services unavailable to particularly
vulnerable populations.
18b. During the November shutdown, HUD's Line of Credit
Control System (LOCCS) , through which grantees draw
funds, was not operational. Therefore, grant awards
that had been made prior to that point in time for
which the funds were "in the system," could not be
accessed by providers.
In planning for a second shutdown, the Department
broadened the scope of excepted activities and, from
the start, identified a portion of Homeless and HOPWA
staff as excepted personnel .
10
287
Question 19 How many homeless persons and AIDS sufferers were
adversely affected, or "put on the streets" as the
Secretary noted, by each government shut down?
The two shut downs reduced opportunities for State and local
governments and for nonprofit organizations that provide
assistance to take the normal steps in planning, opening and
operating projects that provide housing assistance and
related services for persons who are homeless or persons
living with HIV/AIDS and their families.
During the first furlough, because of it's duration, we
estimate that minimal effect was felt by grantees and the
homeless persons they serve. During the second furlough,
however, grant agreements for 66 projects that were ready
for approval were held up until after the shutdown, delaying
implementation of projects serving several thousand persons.
These delayed projects would have provided transitional
housing and services, as well as permanent housing for the
mentally ill and other homeless individuals and families at
the beginning of the winter season who were already on the
streets or in emergency shelters.
In addition, there were 370 other projects delayed which,
while not ready for execution of the grant agreement, were
being assisted by HUD Field Offices in the preparation of
necessary legal documents prior to agreement execution.
These projects are designed to serve well over 100,000
homeless persons.
In the HOPWA program, some commitments of FY 1995 funds were
delayed due to the furlough. In 1995, $153.9 million was
made available to States and cities by formula allocations
and $17.1 million was made available by competitive award.
HUD offices were not able to approve programs and authorize
access to program funds for 16 of the 21 competitively
selected grants, including identification and training of
project staff who will access funds and account for the use
of such funds. The estimated number of clients to be served
by these projects was 7,953 persons with housing assistance
and an additional 4,308 with related services. During the
interim between these interruptions, HUD staff were able to
approve five grant agreements and one project expended
funds. Formula programs in all 66 eligible jurisdictions
were required to accommodate a rescission of part of the FY
1995 program funds, including holding additional public
hearings or consultations, and resubmitting revised plans.
No action was taken on formula revisions during the furlough
periods .
11
288
Question 21 Please Identify the 21 local HOPWA [Homeless
People With AIDS] groups, cited in HUD's
November 14th Focus, that did not receive
their funds?
These competitively-awarded projects were pending technical
submission reviews, financial procedure authorizations and
other actions during the first furlough and 16 were pending
during the second furlough.
Table 1. 1995 HOPWA Competitive Grants
.
Grant Recipient
Project
Location
Award
Amount
AIDS Task Force of
Alabama, Inc.
Birmingham,
Alabama
$
756, 992
Alaska Housing
Finance Corp.
Fairbanks &
Juneau, Alaska
716,166
LT
Marin County
Community Development
Agency
San Francisco
metro area
1, 100, 0
00
State of Connecticut
Dept . of Social
Services
State-wide,
Connecticut
998,648
Cornerstone Services,
Inc.
Joliet,
Illinois
465, 991
Travelers &
Immigrants Aid of
Chicago
Chicago,
Illinois
1, 030,0
00
UNITY for the
Homeless
New Orleans,
Louisiana
1,099,2
30
City of Baltimore
Department of Housing
and Community
Development
Baltimore,
Maryland
1,076,7
18
State of Maryland,
Department of Health
and Mental Hygiene
Eastern Shore
& Western
Maryland
1,000,0
00 LT
AIDS Housing
Corporation
Boston,
Massachusetts
990,534
12
289
Hospice of
Southeastern Michigan
Detroit metro
area, Michigan
572, 932
State of Missouri,
Department of Health
Areas outside
of St. Louis
and Kansas
City, Missouri
888, 065
LT
Community Counseling
& Mediation
Brooklyn, New
York
66,950
Episcopal Social
Services of New York,
Episcopal Action
Harlem
neighborhood
of New York
City, NY
1,099,9
99
Greyston Foundation,
Inc .
Yonkers, New
York
1,100,0
00
Souths ide Community
Mission
Brooklyn, New
York
975,572
Asociacion de
Puertorriquenos en
Marcha
Philadelphia,
Pennsylvania
1,030,0
00
State of Rhode
Island, Housing and
Mortgage Finance
Corporation
Providence,
Rhode Island
943,440
LT
State of Vermont,
Housing and
Conservation Board
State-wide,
Vermont
719,950
LT
AIDS Housing of
Washington
(2 projects)
National &
Seattle area
projects,
Washington
1,042,7
70
TOTAL HOPWA 1995
Awards
21 Grants
17,673,
957
LT denotes Long-term projects,- others are Special Projects of
National Significance
Question 22 What is the spend-out rate for Homeless programs
euid HOPWA f\inds? For how long can these programs
continue to operate on carry-over funding?
13
290
Both the Homeless and HOPWA programs spend out (are drawn
down by grantees) over 5 -plus years, primarily due to the
nature of the projects that are undertaken -- building of
shelters and other types of housing, provision of services
over a period of time, continuing rental assistance, etc.
Homeless competitive program funds, awarded since 1987, have
assisted more than 2,000 projects at an average annual rate
of $71.6 million. These figures do not incorporate the
recent 1995 awards. The Supportive Housing Program, the
largest of the homeless programs, as well as the Shelter
Plus Care program have a very limited amount of carry-over
funds. The Section 8 Moderate Rehabilitation Single Room
Occupancy Program, which is for a ten year period, has some
carry over funding.
Over the four fiscal years 1992-1995, the HOPWA program
allocated funds by formula to 34, 43, 54 and 66
jurisdictions, respectively, in each year, and provided for
an additional 62 competitively-selected projects. During
the most recent 3 -month period, expenditures from all
funding years was about $8.9 million per month, for an
annual equivalent of $106.9 million. These amounts have
increased by about nine percent over amounts spent in the
last two quarters.
Potential Funding Gaps. Many grantees exceed this average
use rate and will complete full use of funding before the
end of their 3 -year use period. For example, the State of
Tennessee has used 100 percent of its FY 1995 funds; with a
small residual amount from prior years (about 10 percent) ,
the State will soon rely exclusively on FY 1996
appropriations, if approved, to maintain programs.
Question 23 During the shutdown, what efforts were made by HUD
to continue to make contract payments to section 8
project-based owners?
Section 8 payments to project -based project owners were made
during each shutdown by the LOCCS system after the input
vouchers were processed by excepted HUD staff in the Field
Accounting Divisions (FADs) . These payments were contract
obligations incurred prior to the shutdown.
Were there payments made to section 8 tenant-based holders?
Yes, during the government shutdown the Department's
financial systems were up and operating as HUD continued to
ensure that PHAs with Section 8 tenant -based holders
received payments and that no tenants lost housing during
this period.
14
291
Question 24 What is the basic function to provide processing
payments to section 8 holders? b. How many-
employees are necessary to operate the computers
that process the Section 8 payments?
The basic function to process payments to Section 8 holders
begins with entry of a twelve month payment schedule into
the Department's accounting system by a financial analyst in
the field, which must be approved and processed by a
supervisor before payments can be generated by the
accounting system. Once the approved payment schedule is
entered into the system, spendout will occur against
available funds based on the schedule. During the shutdown,
if the field offices had entered and approved schedules for
their respective PHAs into the Department's accounting
system, the Section 8 payments continued to flow to the
applicable PHAs. However, some PHAs did not have approved
payments already scheduled in the accounting system prior to
the shutdown, and those payments were reviewed and approved
by excepted employees in HUD headquarters .
Field Office Financial Analysts were called back to work
during the shutdown in order to assess which PHAs would
experience a funding shortfall by February 1 in the event
funds did not become immediately available under a new
Continuing Resolution. Financial Analysts also calculated
the renewal funding requirements for January expirations so
that funds could be immediately assigned as soon as the
shutdown ended.
b: Approximately 119 employees were necessary to operate
the computers that process the Section 8 payments.
This number is calculated by estimating that two
employees (one financial analyst and one supervisor)
would be needed per 59 Field Offices (i.e. 52 Field
Offices, 6 Native American Offices, and the Beaumont
Office.) One employee was also be needed in
headquarters .
Question 25 In most cases the Section 8 payments are made from
previously appropriated f \inds . How are these
previous appropriated fiinds affected by the shut
down for FY 96?
Not affected by the shutdown. We are continuing to make
payments to the housing authorities.
15
292
Question 26. During your testimony before the Subcommittee, you
cited several examples of backlogs that would
accvimulate for each day of a potential shutdown.
Please provide the Subcommittee with an inventory
of the workload backlogs that your Department
associates with the shutdowns. In light of 0PM' s
January 17, 1996 guidance to restore all annual
leave, please provide the Subcommittee with your
management plan for reconciling the accumulated
leave and the workload backlogs that resulted from
the furlough periods .
FHA
Complete inventory is not possible. Addition examples of
Office of Housing backlogs include:
-Reserves for Replacement,
-Rent Increases
-Physical Inspections
-Financial Statement Reviews
-Endorsements
-TPA's
-Closings
-Flex Subsidy Releases
-Section 8 Extensions/Amendments
-Vouchers
-Production processing including; Preapps, Inspections,
-Appraisals, Cost, Mortgage Credit.
Unopened mail received by the Lender Approval and
Recertif ication Division during 2nd furlough:
Initial applications 88
Branch applications 149
Additional sponsor applications ....589
Financial statements for review ....322
Misc . correspondence 119
Significant backlogs from the Office of Mortgage Insureuice
Accounting and Servicing
@12/15 ®1/12
-Mortgage insurance applications
pending endorsements
-Exceptions
-Record changes
-Terminations
-Premium Refunds
-Claims
-Vendor payments (properties)
16
100,
,000
200,
,000
1,
,250
5, 900
6,
,250
2,
,200
18,
,200
2,
,933
10,
,500
7,
,000
17,
,000
0
6,
,000
293
significant Office of Housing procurements delayed three-to-
four weeks include :
• SF auctioneer services (for property disposition)
• Computer support for Single Family Asset
Management System
• Advanced micro-simulation actuarial model
• Technical assistance for Multifamily SWAT teams
• Demonstration contracts for Single Family property
disposition activities in Maryland, California,
and Louisiana
• HUD Homes hotline services
• Asset sales (notes)
Finally, we attach a workload information summary of the
number of single family cases logged in but not endorsed as
of January 18, 1996 by single family field office. The
actual backlog is higher because some cases have been
received by the office but not yet logged in. (Attachment
A.)
FAIR HOUSING AND EQUAL OPPORTUNITY
Based on the average number of fair housing cases opened per
week during the previous fiscal year and our long term
average for case closure we estimate that 464 fair housing
complaints would have been filed during the shutdown and 450
cases closed. These are National figures and include both
HUD and FHAP cases. Although the state and local FHAP
agencies were still open, HUD was unable to refer cases or
process those cases the FHAP's investigated. In addition,
approximately 250 claims or inquires concerning
discrimination would have been submitted that would have
received service from HUD but not result in the filing of a
fair housing complaint.
ADMINISTRATION
Because of the shutdowns, incoming mail accumulated and
required considerable time to sort through. This
contributed to delays in processing actions that were in the
pipeline, extensions of vacancy announcements, rescheduling
of merit staffing panels, delays in issuing selection
certificates and in rating and ranking job applications.
Decisions regarding proposals to remove and discipline
employees were also delayed. Delays occurred in initiating
4 7 reimbursable personnel security investigations and in
closing 24 others.
17
294
Examples of other impacts include a processing and
counselling backlog to accommodate retirements and
separations, many of which occurred during the shutdown.
Optional retirement/buyout 74 employees
Early retirement/buyout 38 employees
Resignation/buyout 5 employees
Declined/buyout 31 employees
Extended/buyout 2 employees
Optional retirement 9 employees
Early retirement 6 employees
Disability retirement 6 employees
The December - January shutdown caused several problems,
including incorrect pay checks. Since pay was issued in
three installments, there was insufficient pay after required
deductions to cover individual obligations. Regular
deductions for financial allotments, court-ordered
garnishments for child support/alimony and commercial debts
were either not processed or significantly reduced.
Pay problems caused a considerable increase in workload- -
countless telephone inquiries from employees respondents, and
attorneys, etc., concerning missing deductions; requests for
pay reconciliations, and coordination with the Department's
payroll agent in New Orleans, Louisiana. Processing delays
occurred in 24 court orders covering actions such as
garnishments, tax levies, child support, and alimony.
Other shutdown impacts included timekeeping. Since employees
were paid manually by NFC with a supplemental pay check and
paid automatically for one week based upon the employee's
work schedule, corrected timecards had to be prepared for
every employee . Employees who should not have been paid
because they were in a non-pay status, were paid; collection
procedures must now be implemented. Due to the overload of
submitting corrected pay data, all actions had to be
resubmitted due to failures in the automated systems.
Personnel Assistants have had to literally spend days
explaining the errors in pay checks created by salary
payments generated during the furlough.
18
295
PUBLIC AFFAIRS
♦Editing of the Annual Report was delayed
♦Invoices for services provided by vendors prior to the
shutdowns were not processed in a timely manner as required
by the prompt payment act .
PUBLIC AND INDIAN HOUSING
The Office of Public and Indian Housing (PIH) accumulated a
backlog during the government furlough that include the
inability to do following:
•Assess 5 0 very large public housing developments and
develop a guide for PHAs to use in assessing the future
viability of their stock.
•Review by field office staff of the formula
characteristics reports data for the CGP Housing Agencies
in preparation for running the FY 1996 CGP formula.
There are approximately 904 PHAs, with well over 21,000
data records, involving all 52 field offices and
headquarters staff.
•Review demolition\disposition applications in
headquarters .
•Progress in the computer matching systems development
effort to detect fraud by tenants in reporting their
incomes for purpose of determining their rent .
•Provide technical assistance to Native American tribes,
housing authorities, or resident organizations.
•Complete processing of regulatory reductions.
•Complete PHMAP assessments for PHAs with FYE 6/30/95.
This meant that these PHAs were not notified of possible
incentives they were eligible for which may have impacted
on other PIH program areas and grant applications.
19
296
COMMONITY PLANNING AND DEVELOPMENT/HOMELESS
During the second furlough, work on 66 grant agreements for
Homeless Assistance projects were delayed and were not
approved until after the shutdown ended. Accompanying these
grant agreements, in some cases, were security and financial
documents which would allow for the assignment and
disbursement /draw down of homeless assistance funds. These
delays forced recipients to explore other areas of funding,
incurring undue hardships or actually closing down their
facilities .
Additionally, technical assistance was not provided to 370
additional projects which were moving toward grant agreement
execution, thereby delaying both the execution of the grant
agreements and the implementation of these projects.
In the HOPWA program, HUD staff were not able to approve
programs and authorize access to program funds for 16 of the
21 competitively selected grants, including identification and
training of project staff who will access funds and account
for the use of such funds.
20
297
ATTACHMENT A
WORKLOAD INFORMATION
SINGLE FAMILY ENDORSEMENTS
NUMBER OF CASES LOGGED IN (RECEIVED) - NOT ENDORSED
AS OF 1/18/96
0102
BANGOR
16
0106
BOSTON
2
0110
BURLINGTON
1
0126
HARTFORD
391
0136
MANCHESTER
0
0143
PROVIDENCE
180
0202
ALBANY
33
0206
BUFFALO
0
0216
CAMDEN
66
0236
NEW YORK
86
0239
NEWARK
111
0306
BALTIMORE
408
0315
CHARLESTON
25
0326
PHILADELPHIA
371
0328
PITTSBURGH
66
0336
RICHMOND
260
0339
WASHINGTON D. C.
1,046
0344
WILMINGTON
31
0406
ATLANTA
42
0409
BIRMINGHAM
306
0414
CORAL GABLES
954
0416
COLUMBIA
45
0419
GREENSBORO
795
0426
JACKSON
177
0429
JACKSONVILLE
395
0436
LOUISVILLE
17
0437
KNOXVILLE
12
0440
MEMPHIS
152
0443
NASHVILLE
22
0444
ORLANDO
677
0446
CARIBBEAN
503
0450
TAMPA
266
0506
CHICAGO
2,187
0510
CINCINNATI
1
0512
CLEVELAND
325
0516
COLUMBUS
366
0528
DETROIT
268
0533
GRAND RAPIDS
145
0536
INDIANAPOLIS
774
0539
MILWAUKEE
6
0544
FLINT
23
0546
MINNEAPOLIS ST. PAUL
223
0550
SPRINGFIELD
212
0602
ALBUQUERQUE
127
0616
DALLAS
158
0621
FORT WORTH
87
0624
HOUSTON
48
0637
LITTLE ROCK
442
298
0641 LUBBOCK 92
0648 NEW ORLEANS 120
0656 OKLAHOMA CITY 8
0659 SAN ANTONIO 163
0662 SHREVEPORT 21
0670 TULSA 35
0705 DES MOINES 236
0716 KANSAS CITY 288
0726 OMAHA 240
0736 ST. LOUIS 95
0740 TOPEKA 75
0805 CASPER 39
0806 DENVER 222
0815 FARGO 1
0820 HELENA 12
0830 SALT LAKE CITY 15
0835 SIOUX FALLS 2
0905 FRESNO 797
0908 HONOLULU 112
0916 LOS ANGELES 21
0920 PHOENIX 250
0925 RENO 0
09 30 SACRAMENTO 425
0933 SAN DIEGO 2
0939 SAN FRANCISCO 327
0943 SANTA ANA 210
0944 LAS VEGAS 27
0945 TUCSON 183
1006 ANCHORAGE 46
1008 BOISE 0
1016 PORTLAND 263
1019 SEATTLE 63
1025 SPOKANE 24
NATIONAL TOTAL 17,262
299
Attachment B
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE DEPUTY SECRETARY
WASHINGTON, DC. 20410-0050
December 13, 1995
Mr. Alan B. Rhinesmith
Deputy Associate Director
Housing, Treasury and Finance Division
Office of Management and Budget
725 17th Street, NW
Washington, DC 20503
Dear Mr. Rhinesmith:
SUBJECT: Revised Contingency Plan for Agency Shutdown
This letter responds to 0MB 's Budget Data Request Number
96-21. It amends the detailed shutdovm plan for the Department
of Housing and Urban Development (HUD) submitted in September,
and constitutes a revised shutdown plan in the event of an
appropriations lapse after December 15, 1995. Our plan is based
on the assumption that a shutdown of short duration can be
managed relatively easily with a minimal staff. However, after a
day or so without funding, the critical needs of HUD clients and
beneficiaries require that more Departmental activities would
necessarily resume, and more HUD employees would be required to
perform them. Details of the proposed staffing levels in each
instance are shown in the enclosure to this letter. To assure
the protection of life and property in programs in the
Department's jurisdiction, we propose the following:
For a short-term shutdown, we would retain on board
essentially the same employees who were working on the last day
(November 17, 1995) of the last shutdown (about 500) . They would
perform activities essential for the protection of life or
property, activities funded by resources remaining available from
funds other than annual appropriations, and activities necessary
for the orderly shutdown of Departmental operations. Most of our
data processing systems would be shut down, which would mean that
most of the Department's financial activities would be suspended.
All non-excepted employees would be furloughed.
300
After the first day of a shutdown, HUD beneficiaries would
begin to feel the effects of the absence of funds, and life and
property would be threatened. It would be necessary to open
payments systems to provide funding to local housing authorities
so that tenants would not suffer unduly from the cold weather and
deferred maintenance.
If the funding lapse lasts more than a day, we would begin
to implement our plan for a longer-term shutdown. Some
activities that had been suspended would be resumed, to protect
life or property, and some employees who had been furloughed
would be brought back on board to perform these activities.
Reopening the payments systems would require a large number of
excepted employees, and our excepted staffing level for a longer-
term shutdown would be about 1,900.
Over a longer term,
1 . We would continue to disburse funds for public housing,
with operating subsidies and modernization funds provided through
local housing agencies providing housing and services to
1.4 million low- income households. For tenant-based rental
assistance , we would propose to reopen the line-of -credit control
system and to add an additional 200 employees to the "excepted"
list to carry out these functions.
2 . For Section 8 project-based rental assistance, we would
reopen the Housing Assistance Payment System, to cover
disbursements for over 1.9 million units of privately-owned
rental housing. Over 4 million people live in these
developments. For Housing, we would add 100 employees to the
excepted list for these functions.
3 . For the FHA Single-Family Mortgage Assignment Program,
to help moderate -income homebuyers who are experiencing
difficulty in paying their mortgages stay in their homes, we
would add 70 employees to provide guidance to lenders concerning
assignment of mortgages in case of default.
301
4. For FHA Multifamily Properties, to authorize the release
of Federal funds to address emergencies (e.g. fires, vandalism,
repairs) in insured and assisted properties, we would add an
additional 150 multifamily Housing employees to the excepted
list, and 60 administrative employees to the excepted list.
5 . For Homeless Services. Services for Persons with HIV/
AIDS and Funds to Cities and Communities, we would add an
additional 120 employees to the excepted list. Reopening the
data systems would provide for the delivery of essential housing
and emergency services to at least 32,000 homeless persons;
provide assistance to approximately 8,200 to 9,500 persons with
HIV/AIDS each day, and provide access to funds for over 1,500
cities and counties which receive HOME and Community Development
Block Grants.
6. If payments are to be resumed under the reopened systems
noted above, an additional 215 employees of the Chief Financial
Officer will be required to be excepted, and another 180
administration employees, most in ADP, will need to be added to
the excepted list. Additional legal staff to provide litigation
support and advice will also be needed.
In total, we are requesting exceptions for up to 1900
employees in the event of a longer-term shutdown.
Please let me know if you have any questions.
Sincerely youi
Enclosure
302
ENCLOSURE
AGENCY: HOUSING AND URBAN DEVELOPMENT
REVISED SHUTDOWN PLANS
Update on excepted/furloughed employees
Short-term Shutdown
Estimates
Employees :
Excepted
Furlouqhed
Housing
28
5307
PIH
24
1383
GNMA
9
56
CPD
12
855
PD&R
5
105
FHEO
16
667
OGC
31
490
CFO
10
385
FDOS
130
207
Admin.
40
977
LBP
0
22
Dep't Mgmt.
34
67
Total, SiE
339
10,521
IG
191
426
WCF
25
284
OFHEO
68
, 0
Total HUD
623
11,231
December
13, 1995
Longer-term Shutdown
Estimates
Excepted Furlouqhed
415
4920
250
1157
9
56
150
717
5
105
29
654
62
459
243
152
132
205
150
867
0
22
34
67
1,479
1,888
9,381
191
299
150
159
68
0
9,839
303
United States
*^ Office of
^gjijg^f Personnel Management
Washington. D.C^ 20415
MAR 13 1996
Honorable John L. Mica
Chairman
Subcommittee on Civil Service
Committee on Government Reform
and Oversight
U.S. House of Representative
Washington, D.C. 20515-6143
Dear Mr. Mica:
Enclosed are responses to questions you sent as a followup to the
hearing held on December 6, 1995, regarding the Government
shutdown. If any additional information is needed, please do not
hesitate to let me know.
Sincerely,
Allan Heuerman
Associate Director
for Human Resources Systems
Enclosure
304
Enclosure
1. Q. Please describe any changes in planning, procedures, and
operations that your agency made between the November
and the December- January shutdowns. Please submit any
revisions and/or supplements to your agency's shutdown
plans. In light of the substantial change between
shutdown numbers reported in the second shutdown, what
changes are contemplated regarding the agency's defini-
tion of emergency functions? Please provide the new
legal reasoning that supports this change from previous
shutdown plans.
A. The Office of Personnel Management (0PM) was not affect-
ed by the December- January shutdown.
2. Q. Please submit the numbers of persons furloughed in each
agency during the two shutdowns. For each function
which was subject to furlough during the first shutdown,
but exempted from furlough during the second shutdown,
please provide policy and legal reasons supporting the
decision to change the status of the functions.
A. 0PM does not collect this information from other agen-
cies. It is up to each agency to carry out its furlough
by determining those activities that are exempt from
furlough and by identifying those employees who will be
furloughed.
With regard to our experience, 0PM placed 2,124 employ-
ees in furlough status during the November shutdown and
was not affected by the December- January shutdown.
3. Q. Please provide a report, by agency and by category, of
all amounts and forms of premium pay (overtime, night
differential, weekend differential, etc.) that was paid
to employees who were furloughed during each shutdown.
A. 0PM does not have access to the data that would be
needed to respond to this question. Each agency is
responsible for administering its own payroll system,
and there is no Governmentwide data source that contains
the amount of premium pay paid by each agency to each
employee who was furloughed. However, the law governing
premium pay for most employees is contained in title 5,
United States Code, and furloughed employees who other-
wise would have been regularly scheduled to worlc during
the recent lapses in appropriations are entitled to
retroactive payments for the following types of premium
pay:
overtime pay (5 U.S.C. 5542 and 5544(a))
• night pay/night differential (5 U.S.C. 5545(a)
and 5343 (f) )
305
-2-
Sunday premium pay (5 U.S.C. 5546(a) and
5544 (a) )
holiday premium pay (5 U.S.C. 5546(b))
- hazard pay differential (5 U.S.C. 5545(d))
environmental differential (5 U.S.C.
5343 (c) (4) ) .
Affected employees also are entitled to the following
types of premium pay, although few, if any, employees
receiving such payments were furloughed:
annual premium pay for standby duty (5 U.S.C.
5545(c) (1) )
annual premium pay for administratively uncon-
trollable overtime work (5 U.S.C. 5545(c)(2))
availability pay for criminal investigators (5
U.S.C. 5545a) .
"Regularly scheduled work" is defined in 0PM 's regula-
tions as "work that is scheduled in advance of an admin-
istrative workweek under an agency's procedures for
establishing workweeks . . . ." (See 5 CFR 550.103.)
The policy described above has been followed consistent-
ly with respect to retroactive payments following each
lapse in appropriations since at least 1986.
The only category of premium pay that was paid to em-
ployees who were furloughed in 0PM was night differen-
tial. To that end, 8 hours of night differential was
paid to furloughed 0PM employees totaling approximately
$ 9.12.
Q. Please provide a report, by agency, of the numbers of
furloughed employees who filed for unemployment compen-
sation during the shutdowns and the amounts paid to
agency employees. Please describe any costs that will
be incurred by your agency as a result of efforts to
collect reimbursement of these payments after routine
pay is restored.
A. 0PM does not collect this information from other agen-
cies. With regard to our experience, 0PM was affected
by only the November shutdown. Since the November
shutdown was too brief for employees to qualify for
unemployment compensation, a collection effort is not
necessary.
306
Q. Please estimate the total costs to your agency associat-
ed with the interruption of operations during November
and December- January . Please provide descriptions of
any unusual costs imposed on the agency or other unan-
ticipated consequences of these interruptions of opera-
tions. Please provide, too, an estimate of any savings
associated with these interruptions.
A. The salary and benefits paid to 0PM employees who were
furloughed in November totaled approximately $1,238,700.
We also incurred some incidental costs such as printing,
mailing, and travel in connection with the orderly
shutdown of 0PM and other Federal agencies.
Q. Please indicate the shutdowns' impact on programs funded
through trust funds, fees, carry over funds, or other
revenues not tied to annual appropriations. Please
describe any changes made in implementing these programs
during the December- January shutdown.
A. In accordance with guidance provided by 0MB Bulletin 80-
14, dated August 28, 1980, (amended by the 0MB
Director's memorandum of November 17, 1981 and updated
by the Department of Justice opinion date August 16,
1995) , positions in programs funded through trust funds,
fees, carry over funds, or other revenue, were excepted
from furlough in 0PM. Funded exemptions in 0PM included
our training and investigations functions funded through
a revolving fund, our retirement and insurance benefit
functions funded through a trust fund, political ap-
pointees who are not subject to furlough, and fee-sup-
ported work in our employment service function. 0PM was
not affected by the December- January shutdown.
Q. Please provide staffing levels for all public affairs
offices in the agency during the shutdown.
A. 0PM 's Office of Communications was responsible for
keeping Federal agencies and departments informed with
up-to-date furlough and re-opening guidance, as well as
unemployment information. This included fielding calls
from thousands of furloughed employees. Accordingly,
six out of seventeen positions were excepted from fur-
lough.
Q. Please provide a report of the number and furlough
status of political appointees, noncareer Senior Execu-
tive Service personnel, and Schedule C appointees during
each shutdown.
A. The following chart depicts the number and furlough
status of 0PM employees in political appointments during
307
-4-
the November shutdown. 0PM was not affected by the
December- January shutdown.
Political
Appointment
Subject to
Furlough
Excepted from
Furlough
Total
Noncareer SES
1
4
5
Schedule C
10
3
13
Presidential
0
3*
3
♦Presidential appointees cannot be placed in a non-duty, non-pay
status since they are not subject to 5 U.S.C. 6301 and attendant
regulations .
9. Q. Please provide estimates of the numbers of employees and
the amount of accrued annual leave that will be restored
by your agency as a result of employees required to work
during the second shutdown. Please describe any other
effects that the second shutdown will have on the admin-
istration of employees' leave programs.
A. 0PM was not affected by the second shutdown.
10. Q. Please describe for the Subcommittee the procedures
required to complete the personnel actions for each
furloughed employee. What efforts has 0PM initiated to
minimize the processing involved in these actions? What
recommendations could you make to the Congress that
would reduce the administrative burden associated with
furloughs related to lapses in appropriations?
A. Section 7513 of title 5, United States Code, establishes
the procedures agencies must follow in furlough situa-
tions. Under normal circumstances, each agency must
prepare and distribute to each affected employee a
proposed notice of furlough 3 0 days in advance; provide
at least seven days for employees to answer orally and
in writing to the proposed notice; notify employees of
their right to representation and their right to appeal
the action; and finally, issue a written decision notice
to employees. The action would then be processed by the
agency through the issuance of a Standard Form 50 (SF
50) . In emergency situations such as lapsed appropria-
tions, agencies are not required to provide 30 days
advance written notice of the proposed furlough (5 CFR
752.404(d) (2)). However, agencies must still issue a
written notice.
0PM took several steps to minimize the processing in-
volved in these actions. We reminded agencies that the
provisions of 5 CFR 752.404(d) (2) do not require an
advance written notice and that employees could be
308
orally notified that they were furloughed, so long as a
written notice of furlough was later provided.
Since Congress historically has authorized Federal
employees to be paid for periods of furlough due to
lapses in appropriations, we advised agencies to delay
the processing of SF 50 's pending completion of the
furlough. Since employees were paid following each of
the two recent shutdowns, agencies were not required to
process SF 50 ' s for the furloughed employees. This
permitted agencies to avoid considerable administrative
expense .
With regard to the issue of how to reduce the adminis-
trative burden associated with furloughs, we recommend
that in situations where agencies have no discretion
about whether employees should be furloughed (i.e.,
lapse in appropriations) the statutory requirements for
furloughs be eliminated. Section 7513 of title 5,
United States Code, requires that employees who are fur-
loughed for 30 days or less be provided with certain
rights and procedures similar to any other adverse
action procedure, such as removal or suspension of more
than 14 days. We believe that a furlough due to a lapse
in appropriations is not the same as other adverse
actionu, where agencies have great discretion in deter-
mining what course of action to take. If the statutory
requirements were eliminated in this situation, we
would, of course, similarly eliminate the implementing
regulatory requirements .
11. Q. During testimony the Subcommittee heard several examples
of backlogs that would accumulate for each day of a
potential shutdown. Please provide the Subcommittee
with an inventory of the workload backlogs that your
agency associates with the shutdowns. In light of 0PM 's
January 17, 1996 guidance to restore all annual leave,
please provide the Subcommittee with your management
plan for reconciling the accumulated leave and the
workload backlogs that resulted from the furlough peri-
ods .
A. 0PM was affected by only the November shutdown. As a
result of the shorter duration of the November shutdown
and the amount of time that has elapsed since that
shutdown, 0PM does not currently have a backlog asso-
ciated with the November shutdown. Additionally, since
the November shutdown took place early in that month, we
do not anticipate any annual leave restoration requests
resulting from the November shutdown.
309
SOCIAL SECURITY
Office of the Commissioner
February 12, 1996
The Honorable John L. Mica
Chairman, Subcommittee on Civil Service
Committee on Government Reform and Oversight
House of Representatives
Washington, D.C. 20515
Dear Mr. Chairman:
This is in reply to your letter of January 18, in which you
submitted a number of questions regarding the Social Security
Administration's (SSA) operations during the recent lapses in
appropriations .
The responses to most of your questions are enclosed, but we have
deferred answering those involving payroll and attendance data
until we can obtain that information from our contract payroll
provider. As a result of furloughs, there have been delays in
updating the automated payroll and attendance system, and it will
take several weeks for this information to become available. We
will, of course, provide answers to those questions as soon as we
can.
As you know, although lapses in appropriations do not affect
funding for our benefit payments, they do affect funding for our
administrative expenses. Thus, during these lapses, we are only
authorized to carry out activities authorized by the Anti-
Deficiency Act. Therefore, the actions we took were dictated by
and fully consistent with the law and with actions
of previous Administrations. We continued to administer our
programs within the constraints of the Constitution and
applicable statutes.
During a lapse of short duration, few SSA activities beyond
continued payment of benefits were allowed. Thus, in
November, we initially stopped all activities except those
involving the payment of benefits.
An extended funding lapse, however, changes the circumstances and
thus the application of the law. A growing backlog of
unprocessed claims would jeopardize our ability to make timely
and accurate payments. Thus, we determined that a lapse of more
than a few days would require us to carry out certain additional
activities, including accepting and processing new benefit
claims .
SOCIAL SECURITY ADMINISTRATION BALTIMORE MD 2 1 235-000 1
310
While I am extremely proud of how our employees pulled together
to continue to meet the basic needs of our customers, there is
no doubt that the shutdowns affected our operations. SSA
developed and committed to a plan to meet detailed performance
objectives both in the President's Budget and at the House-passed
funding level for Fiscal Year 1996. The furloughs resulting from
funding lapses, combined with the continuing uncertain budget
picture and multiple continuing resolutions throughout this
fiscal year, have severely compromised our ability to meet these
important performance objectives.
Sincerely,
,^^
Shirley S/ Chater
Commissioner
of Social Security
Enclosure
311
1 . Please describe any changes in planning, procedures, and
operations that your Agency made between the November and
December- January shutdowns. Please submit any revisions and/or
supplements to your Agency's shutdown plans.
The changes in the operations of the Agency between the November
and the December- January shutdowns are reflected in the four
attached memorandums from SSA to 0MB.
Attachments
312
SCXJAL SECURITY
Of/icc of the Commluioner
January 5, 1996
The Honorabl* Alica Rivlln
Director
Office of Kanageaent and Budget
Vaahington, D. C. 20503
Dear Dr. Rivlin:
Thle is to infom you that the Social Security Adninistration
(SSA) has amended the contingency plan in effect during the
ongoing lapse in Federal appropriations to include the processing
of annual wage reports (AWR) .
Beginning this week, SSA will receive nearly 235 nillion earnings
reports for calendar year 1995 fros enployers and self-enployed
individuals. If processing of these reports does not begin
inaediately, the accuracy and reliability of SSA's clains
processing would be seriously coaproBised, and a serious and
pervanent disruption of the Adainistration's ability to
adainister the trust funds would occur. Tiaely posting of wage
inforaation is necessary to recoaputc the benefit payaents for
three aillion working Social Security beneficiaries, as well as
to compute the national average wage index for 1997. If AWR
processing does not begin iaaediately, SSA will not be able to
accurately conpute the 1997 wage base by the statutorily required
date, resulting in a peraanent loss of receipts for the trust
funds, as well as untiaely or inaccurate benefit adjustaants for
1997.
As a result, SSA is returning to duty 949 SSA eaployees, and in
following past practices, is hiring 253 seasonal eaployees to
handle this workload. Becauae this activity Bust take place at
the Wilkcs-Barre Data Operations Center, other alternatives are
not available.
Sincerely,
Shirley S. Chater
Coaaissioner
of Social Security
tOCUaSKCmUTYADMINOTIIATION WASKINC70N DC SOIM
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SOQAL SECURITY
Office nf the Coinmi!>.si(in(.'r
DEC I 2 1995
The Honorable Alice Rivlin
Director
Office of Management and Budget
Washington, D.C. 20503
Dear Dr. Rivlin:
In reaponee to your request for the Social Security
Administration's (SSA) contingency plan for activities during a
potential second lapse in Federal appropriations, I have enclosed
a chart detailing those functions that would continue to be
performed, and the staff that would be needed to perform them, in
such eventuality. As you can see, I have determined that our
trust funds and benefit programs could not tolerate another
interruption of claims-taking activities at this time. Based
upon our experience during the November 14 to November 19 lapse
in appropriations and, more importantly, the loss of four full
days of work occasioned by that lapse, any further interruption
in service would have a devastating long-term impact on SSA's
ability to process Social Security, Supplemental Security Income
(SSI) and Black Lung claims. Due to the previous appropriations
lapse, we must recover from our inability to process 112,000 new
applications, 5,000 administrative hearings, 800,000 telephone
calls, and a number of other workloads. As a result, SSA's field
offices will remain operational for the taking of new
applications and the continued processing of claims, including
operation of State disability determination services and SSA's
toll-free telephone service. These actions are necessary to
appropriately administer the trust funds and benefit programs
under our jurisdiction.
Social Security disability, retirement arid survivor's benefits
are funded through an indefinite appropriation that does not
require the- passage of annual appropriations legislation. Funds
for Supplemental Security Income (SSI) and Black Lung benefits •
under the Federal Coal Miners Health and Safety Act have been
appropriated through December 31, 1995. Although the
administrative costs necessary to administer these programs are
subject to annual appropriations that have not, as yet, been
enacted, Department of Justice opinions indicate that continued
appropriations for the benefit payments "necessarily implies"
lawful administration of these programs, even in the absence of
appropriations .
As I have indicated, any further interruption of claims
processing would present dif f i.cultie.-j which would be practically
SOQAL SECURJTY ADMINISTRATION BALTIMORE MD 21 1350«)1 •
315
insurmountable and would cripple SSA'a ongoing ability to
properly administer its trust funds and provide service to the
public. The work that accumulated during the previous lapse,
when added to what are already large backlogs in some areas, have
placed the trust funds and benefit programs that we administer in
a tenuous position. Any further hiatus could irreversibly impair
SSA'B capacity not only to distribute accurate payments to
current beneficiaries, but also to process new claims and appeals
"in the pipeline. "
With our contingency plans, in the event of another lapse in
appropriations, not only would SSA continue to pay benefits to
current beneficiaries, it would take new applications for SSI and
Social Security benefits, process pending applications and
appeals, undertake critical post-entitlement actions, and perform
those other activities necessary to properly carry out these
functions. However, SSA would not process applications for
Social Security numbers or replacement Social Security cards and
would cease issuing personal earnings and benefit estimates and
performing annual wage reporting activities. Those employees
whose primary duties are staff support would be furloughed.
Total staffing would be 55,992, and 10,203 employees would be
furloughed.
Sincerely,
^.2^
Shirley S. Chater
Commissioner
of Social Security
Enclosure
316
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SOCIAL SECURITY
Office of the Commissioner
November 16. 1995
The Honorable Alice Rivlin
Director
OSice of Management and Budget
Washington, DC. 20503
Dear Ms Rivlin:
In response to the President's request for a review of agency shutdown plans in light of the
unprecedented shutdown of the Federal government, we have determined that SSA must begin
implementing Phase II of its contingency staffing plan on Monday morning, November 20, 1995
in order to begin accepting and processing claims. SSA is taking this action in order to
appropriately administer the trust funds.
In addition to continuing benefit payments under the Social Security, Supplemental Security
Income (SSI), the Federal Coal Miners Health and Safety ("Black Lung") programs. Phase II will
involve recalling suflBcient staff from furiough to administer these programs, including the taking
of new applications. This action is essential for the SSA to carry out its responsibilities to the
public to administer the trust funds for which it is responsible, and is consistent with the
Department of Justice's advice concenung activities authorized during a lapse in appropriations
Social Security disability, retirement and survivor's benefits are funded through an indefinite
appropriation which does not require annual appropriations legislation Funds for SSI and Black
Lung Benefits have been appropriated through December 31, 1995. Although funds for the costs
necessary to administer these programs have not been appropriated, the Department of Justice
opinions indicate that continued appropriations for the benefit payments "necessarily implies"
lawful continuation of such administration An appropriations lapse which lasts for more than one
to two weeks would cripple SSA's ongoing ability to properly administer its trust funds, and
could irreversibly impair its capacity not only to distribute accurate payments to current
beneficiaries of all of its programs, but also to process new claims and appeals "in the pipeline."
SOCIAL SECURmfADMIMSTP»"n'^N WASHINGTON DC JOIM
iin.iQn 07 . 11
318
Phase II of SSA's contingency staffing plan would operationalizc SSA's field facilities, including
the reopening of SSA's toll-free telephone service, and State DDS facilities Under Phase II, SSA
would take and process new applications for SSI and Social Security benefits, and the agency
would resume processing appeals Under Phase II, however, SSA would not process applications
for Social Security numbers, personal earnings and benefit estimates and annual wage reporting
activities. Employees whose primary duties are staff support would continue to be fijrloughed
Approximately 49,715 staff will be recalled from fijrlough to ensure the payment of benefits to
individuals who are eligible under our programs Total staffing under Phase II of the contingency
staffmg plan will be 54,495. 1 1,700 employees will continue to be furloughed
Sincerely,
^C^
Shirley S Chater
Commissioner of Social Security
Enclosures
319
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^^
SOCIAL SECURITY
Office of the Ciimniissinncr
September 14, 1995
The Honorable Alice Rivlin
Director
Office of Management and Budget
Washington, D.C. 20503
Dear Ms. Rivlin:
In response to your request of August 22, 1995, and following
discussions with your staff, we are providing our contingency
plan to deal with a possible appropriations hiatus. We have
developed a staffing plan for suspension of operations in the
event that neither a regular appropriations bill nor a fiscal
year 1996 continuing resolution to allow operations at the
current rate is enacted by October 1, 1995. The plan would be
operational for 14 days.
According to the summary of the Justice Department's memorandum
to the Office of Management and Budget (OMB) , the Social Security
program operates under an indefinite appropriation. Previously,
the Department of Health and Human Services and OMB further
interpreted Justice's opinion to mean that with respect to 31 USC
1341 (the Antideficiency Act), SSA has funding authority to
continue to pay currently enrolled beneficiaries and maintain
essential records for them. Legal authority also permits funding
for Supplemental Security Income (SSI) and Black Lung benefits
payable during the first quarter in the new fiscal year.
The staffing plan which is enclosed would provide for the minimum
amount of activity necessary to assure the continued issuance of
Social Security and SSI payments to those already entitled to
receive them. This includes the retention of approximately three
employees per field office and an additional 160 employees in
other direct service positions. A total of 4,780 staff would be
needed and 61,415 employees would be placed on furlough. The
enclosure provides additional details on type of activities and
staffing levels that would be needed during any appropriations
hiatus. Under our plan, our national 800 number would not be in
operation and callers would hear a recorded message advising them
of the situation. We would not process applications for Social
Security numbers nor would we process any applications for Social
Security or SSI benefits. We would not process postentitlement
(PE) actions, except for critical matters that affect payments.
Our entire appeals process would also shut down. The State
Disability Determination Services (DDS) would also be affected by
any funding lapse. Therefore, we intend to notify the Governors,
in writing, of the potential impact.
SOCIAL SECURITY ADMINISTRATION BALTIMORE MD JmSOOll
322
Once a funding lapse begins, if it appears that it could continue
beyond a short period, we would need to reassess our ability to
adequately administer the trust funds and SSr and Black Lung
benefits consistent with existing law. We remain hopeful that
actions can be taken to avert putting our plan into effect but we
will be prepared to implement it if it becomes necessary to do
so.
Sincerely,
Shirley S. Chater
Commissioner
of Social Security
Enclosure
323
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324
2 . Please submit the number of persons furloughed in your Agency
during the two shutdowns.
The answer to this question is contained in the attached
memorandums referenced in Question 1.
325
3 . Please provide a report, by Agency and by category, of all
amounts and forms of premium pay (overtime, night differential,
weekend differential, etc.) that was paid to Agency employees who
were furloughed during each shutdown.
We will provide this information as soon as it becomes available.
326
4 . Please provide a report of the numbers of furloughed
employees who filed for unemploYment compensation during the
shutdowns and the amounts paid to Agency employees. Please
describe any costs that will be incurred by your Agency as a
result of efforts to collect reimbursement of these payments
after routine pay is restored.
During the shutdowns, we provided employees with information on
the procedures for filing claims for unemployment compensation in
their state. These procedures vary from state to state and many
provide for employees to file claims directly with the states.
Since the states handle the claims filed with them, we do not
have information on the numbers of employees who filed claims and
the amounts paid to them. With regard to the collection of
reimbursement of these payments after pay is restored, we are
following the instructions in the Labor Department memorandum of
January 24, 1996. A number of states did not pay unemployment
compensation to furloughed employees before pay was restored, so
overpayments need not be collected for them. In the remaining
states, there is some variation in the procedures for collecting
overpayments. We do not know what the costs will be for
collecting overpayments because we are currently working with the
various states to determine what information we need to provide
to them.
Attachment
327
U.S. Department of Labor
JAN 2 4 1996
Employmenl and Gaining Admnistralion i
200 Conslitution Auernje. NW
VV&shingtoo. DC 20210
MEMORANDUM FOR:
SUBJECT :
ALL FEDERAL AGENCY ASSISTANT SECRETARIES
FOR ADMINISTRATION AND MANAGEMENT
AND/OR DIRECTORS OF PERSONNEL
'^"^-^fe^
MARY ANN WYRSCH
Director
Unemployment Insurance Service
Unemployment Compensation for Federal
Employees (UCFE) Program Overpayments Made to
Furloughed Employees
During the recent partial shutdovm of the Federal Government from
December 15, 1995 to January 6, 1996, several States issued UCFE
payments to furloughed Federal employees who were subsequently
issued retroactive salary payments for the period of their
furlough. This is likely to result in the establishment of
overpayments for the furloughed employees who received UCFE
payments .
Under the regulations of the UCFE program, the establishment and
recovery of UCFE overpayments are made uncJer the provisions of
State unemployment compensation law. Accordingly, State
Employment Security Agencies (SESAs) must determine if a UCFE
overpayment has occurred under its State law, and after that
determination has become final, the SESA commences the
overpayment recovery actions permitted under its State law.
The Federal agencies affected by this partial shutdown have
responsibilities under the UCFE program to assist the SESAs in
carrying out their UCFE overpayment determination and recovery
responsibilities. The Federal agencies should-
o Provide, as soon as possible, the following information
to each SESA with whom UCFE claims were filed by furloughed
employees- -
- the name and social security account number of the
furloughed employees,
- the amount of the retroactive salary payment made to
each furloughed employee, and
- the period of time to which the retroactive salary
payment applied.
328
- 2 -
This action is necessary to initiate the claims review and
overpayment determination process. Unless the Federal
agency notifies the SESA, it may not be able to commence the
process.
o Fully cooperate with the SESAs in their establishment and
recovery of UCFE overpayments made to furloughed Federal
employees .
Some State unemployment compensation laws provide that the
employer (the Federal agency in this case) , rather than the SESA,
shall recover the overpayment from the claimant. In these States
the employer, rather than the claimant, shall reimburse the State
for the recovery of the overpayment. If a State unemployment
compensation law has such a provision, the SESA of that State
will contact the appropriate Federal agency to coordinate the
recovery of the outstanding overpayment by the Federal agency and
the Federal agency's reimbursement of the State.
This process is explained on pages VI -24 and VI -25 of the UCFE
Instructions for Federal Agencies, issued March 1995.
If you have any questions concerning the contents of this
memorandum, please contact Bob Gillham of the Unemployment
Insurance Service at 202-219-5312.
329
5 . Please estimate the total costs to your agency associated
with the interruption of operations during November and December-
January. Please provide descriptions of any unusual costs
imposed on the agency or other unanticipated consequences of
these interruptions of operations. Please provide, too, an
estimate of any savings associated with these interruptions.
We estimate the total cost of the two funding lapses to be
$77 million. These costs relate to salaries for furloughed
employees, rent and maintenance for buildings that were not fully
utilized and fees paid for services not rendered as discussed
below:
SSA Payroll ($66 million)
During the furlough periods payroll for SSA employees was
about $11.7 million per day. We estimate that the daily
payroll cost for SSA employees furloughed during the first
period was $10.8 million and the daily payroll cost for SSA
employees furloughed during the second period was $1.8
million. Based on the duration of each furlough, the total
SSA payroll cost of the shutdowns was $66 million.
Disability Determination Services (DOS) Payroll ($2 million)
All state DDS ' s remained open during the second furlough
period temporarily using state funds until federal funds
became available. However, thirteen state DDSs closed their
offices during the first furlough period. Payroll and
related costs for state employees who did not work during
this period are estimated at about $2 million.
Facilities ($8 million)
SSA facilities were not completely closed during the two
shutdown periods because some employees remained on duty to
carry out excepted functions. We incurred full rental costs
even though facilities were not fully utilized.
Services Paid for but Not Rendered ($1 million)
During the shutdown periods some services were paid for but
not rendered such as training classes paid for but not
attended, guard services, medical/vocational expert fees,
rent and maintenance of equipment, etc. We estimate the
related costs at about $1 million.
Although the agency clearly spent less during the shutdown
periods we do not consider this to be "savings". Costs not
incurred due to the lapses in funding (such as training) are
costs deferred rather than saved.
330
6 . Please indicate the shutdowns' impact on programs funded
through trust funds, fees, carryover funds or other revenues not
tied to annual appropriations. Please describe any changes made
in implementing these programs during the December- January
shutdown .
Title II benefit payments continued despite the shutdowns because
they are covered by indefinite, permanent appropriations from the
Social Security trust funds. Supplemental Security Income (SSI)
and Black Lung benefits also continued despite the fact that they
are paid from general fund appropriations. This is because
Congress previously appropriated advance funds for the first
quarter of fiscal year (FY) 1996 to cover SSI and Black Lung
benefits .
Nonetheless, activities which are important to the integrity and
overall effective management of our programs were interrupted
during the shutdown periods. For example, issuance of new or
replacement Social Security numbers (SSN) and verification of
SSNs were deferred as was issuance of personal earnings and
benefit estimate statements. Quality assurance reviews for all
programs were interrupted. Payments to vendors were delayed.
Monitoring of SSA's 800 number accuracy was stopped. Six hundred
pending fraud complaints and 300 new complaints were not
investigated. Job-related training was deferred. Collection and
analysis of management information critical to efficient program
administration was stopped.
331
7. Please provide staffing levels for all public affairs
activities in the agency during the shutdown.
SSA had a total of fourteen public affairs employees on duty
during the shutdown, four at Headquarters and 1 in each of the
10 Regional Offices. They handled public information requests,
including claims-related telephone calls. Congressional
inquiries, and other sensitive inquiries.
332
8 piopc^ pvnviHo . ^Pnnrt. of the number flnd furlough Rtatus of
^2;iU:2i ^Tc"h^^"^p r ^"noinrops in Your fin^nry during eaoh
phntdown.
Of eight noncareer SES appointees, six were excepted from both
furlouqhs The Agency had one Schedule C appointee who was
furloulhed. Decilions relating to political appointees were made
in accordance with the same criteria applied for all Agency staff
members .
333
9. PTfiase provide estimates of the numbers of employees and the
amount of accrued annual leave that will be restored by your
Agency as a result of employees required to work during the
second shutdown. Please provide the number of employees who
might lose accrued annual leave as a result of their status
during the shutdown. Please describe any other effects that the
second shutdown will have on the administration of employees'
leave programs.
We will provide this information as soon as it becomes available.
334
10 Please provide information about the numbers of employees
who have taken annual leave during the months of December and
Januarv fnr each of the past five years. Please estimate the
portion of staff taking leave during these times and the portion
nf the workforce on the job during these months in these years.
We will provide this information as soon as it becomes available.
335
11 . The Subcommittee has received reports that your agency's
managers gathered in San Francisco for a professional conference
during the November shutdown. Please provide the Subcommittee
with a schedule for this conference, the number of managers
participating, the rationale for including this function under
the definition of "emergency" activities. Please provide any
guidance from the Office of Management and Budget, the Office of
Personnel Management, the Department of Justice, or any other
agency that might have provided guidance about the legal or
operational necessity of this conference.
The conference in question was sponsored, scheduled, and funded
by the National Council of Social Security Management
Associations, Inc. (NCSSMA) , which is a professional organization
whose members are supervisors and managers in SSA' s field offices
and teleservice centers. The conference was scheduled for
Tuesday, November 14, 1995, through Thursday, November 16, 1995,
with some committee meetings scheduled for Monday, November 13 .
Fifty-eight SSA employees attended the conference as NCSSMA
officers, delegates, or alternate delegates and several members
of SSA's executive staff attended as invited speakers to discuss
current issues of interest to SSA field managers. In addition,
some employees attended as nondelegates . No SSA funds were used
to pay for travel or other expenses of NCSSMA members.
Due to travel considerations and committee meeting commitments,
many attendees had arrived at the conference site in advance of
the start of the shutdown on November 14 . NCSSMA decided to
continue the conference when the shutdown began. At that point,
furloughed employees were free to continue in attendance. We
understand that most excepted employees, including SSA executive
staff, left the conference to take up their assigned duties as
soon as travel arrangements could be made.
Should there be further questions concerning the conference,
Mr. Don Seatter, President of NCSSMA, may be reached at (803)
727-4397.
336
12 . Please provide the Subcommittee information about any
overtime or other premium pay awarded to managers of Social
Security field offices during the November shutdovm. Please
provide comparable data for the December- January shutdown.
Please provide copies of the personnel guidance, whether internal
or from 0PM or other sources, that support decisions to provide
premium pay for managerial responsibilities.
We will provide this information as soon as it becomes available.
337
13 . During your testimony before the Subcommittiee . you cited
several examples of backlogs that would accumulate for each day
of a potential shutdown. Please provide the Subcommittee with an
inventory of the workload backlogs that your agency associates
with the shutdowns. In light of 0PM' s January 17. 1996 guidance
to restore all annual leave please provide the Subcommittee with
your management plan for reconciling the accumulated leave and
the workload backlogs that resulted from the furlough periods.
Backlogs created by the shutdowns include:
Public Inquiries
Approximately 3,500 inquiries are pending as a result of the
furlough. We estimate that approximately 25% of those
letters are from members of Congress and the majority of the
remainder are from individuals regarding claims.
Hearings
Nearly all of the 10,000 hearings that were delayed because
of the November furlough have been rescheduled .
Appeals
The appeals backlog has grown by approximately 1,000 cases
as a direct result of the November furlough.
Certificates of Coverage
800 requests, which will require approximately 2,000
certificates, are currently pending. Prior to the furlough,
we were able to issue certificates within 3 weeks of
receiving the request. Because of the backlog created by
both furloughs, it now takes 10 weeks to issue a
certificate.
Social Security Number Applications
Processing of about 500,000 applications for Social Security
numbers or replacements of Social Security cards was
deferred until after the furlough ended. Most of this
backlog was cleared quickly because it is not a labor-
intensive operation.
Requests to use restored annual leave will be treated in the same
manner as any request to use annual leave, including
consideration of the impact of the employee's absence on office
workloads. The additional accumulations of leave resulting from
leave restoration are not expected to cause any significant
problems because employees have until the end of 1998 to use
restored leave .
I
338
Department of Veterans Affairs
Assistant Secretary for Human Resources And Administration
Washington DC 20420
iffB 12 1996
The Honorable John L. Mica
Chainnan, Subconunhtee on Civil Service
House of Representatives
2 1 57 Rayfourn House OfBce Building
Washington, DC 20515-6143
Dear Mr. Chainnan:
BECtlVEO
FEB ' ' 1^'=''^
Hf> ISE O^^'T^ ^£ ''*' „o„sLrr
This responds to your letter of January 18, 1996, with follow-up questions from
the Subcommittee's December 6, 1995 hearing, "The Government Shutdown: What's
Essential?"
Because of the decentralized nature of VA operations and the detailed nature of
the questions, not all of the information is readily available. Enclosed are responses to
questions 1, 2, 4, 7, 8 and 10. Responses to the remaining questions will be provided in
approximately 30 days.
Sincerely yours.
Enclosure
339
Follow-up Questions
Subcommittee on Civil Service
Hearing December 6, 1995
"The Government Shutdown: What's Essential?'
1. Please describe any changes in planning, procedures, and operations that your
Department made between the November and the December-January shutdowns.
Please submit any revisions and/or supplements to your Department's shutdown
plans. In light of the substantial change between shutdown numbers reported in the
second shutdown, what changes are contemplated regarding the Department's
deflnition of emergency functions? Please provide the new legal reasoning that
supports this change from previous shutdown plans.
Attached are copies of Departmental shutdown plans developed for Fiscal Year 1996:
• September 15, 1995 (implemented during November shutdown)
• November 17, 1995 (supplementary plan to recall a limited number of employees if the
November shutdown had lasted more than one week)
• December 14, 1995 (implemented during December-January shutdown)
• January 23, 1996 (developed on the basis of the continuing resolution then in effect,
PL 104-92; not implemented as no shutdown occurred)
Functions in VA which were originally determined to be excepted from shutdown during a
lapse in appropriations include health care for veterans; police and security services; burial
in VA national cemeteries; eligibility determinations for excepted activities; technical and
support functions such as operation of automated systems and legal representation for
excepted activities; and executive management and direction of the Department. These
functions were determined to meet the exceptions for protection of life, safety and
property permitted under the Antideficiency Act. Additional functions which are funded
through revolving funds or means other than annual appropriations were also continued.
As reported in VA testimony at the December 6, 1995 hearing, an additional 1,700
employees of the Veterans Benefits Administration were determined to be excepted at the
close of the November 1995 shutdown. These employees were needed to receive and date
benefits claims, assist applicants in filing claims, and respond to inquiries about VA
benefits. This was the only significant change in VA planning based on provisions of the
Antideficiency Act.
340
Additional updates to planning data were made as necessary to reflect current employment
information, to provide appropriate support for functions that had already been
determined to be excepted, or (as described below) to incorporate terms of the current
continuing resolution, rather than on new determinations regarding excepted versus
nonexcepted functions.
The most recent plan (January 23, 1996) was developed based on the continuing
resolution then in effect, PL 104-92, which provided for payment of all veterans benefits
and for payment of contractors for goods and services necessary to patient care through
the end of the fiscal year. Under this plan all those functions previously determined to be
excepted under the Antideficiency Act (protection of life, safety and property) were
continued, plus fianctions associated with the new categories of fimded activities. This
included field ofiSces of the Veterans Benefits Administration, the Board of Veterans
Appeals, and associated support activities such as legal representation and computer
operations. At the time the January plan was prepared, a preliminary determination had
been made to include "in kind" benefits such as provision of veterans grave markers,
however, legal advice has since indicated that the continuing resolution would only apply
to benefits involving financial payments. This issue has been clarified in the current
continuing resolution, PL 104-99, and future plans, should they become necessary, will be
modified appropriately.
2. Please submit the numbers of persons furloughed in each agency during the two
shutdowns. For each function which was subject to furlough during the first
shutdown, but exempted from furiough during the second shutdown, please provide
policy and legal reasons supporting the decision to change the status of the
functions.
Employees Furloughed November 1995
(Plan Dated 9/15/95)
36,354
Employees Furloughed December 1995 - January 1996
(Plan Update 12/14/95)
33,767
The decrease in number of employees furloughed reflects a determination that 1,700
employees of the Veterans Benefits Administration would be recalled to receive and date
applications, assist applicants in filing claims, and respond to inquiries about VA benefits.
Additional adjustments reflect more current planning data, such as the gradual decline in
overall VA employment levels during the plaiming period, and more accurate estimates of
the actual number of employees needed to perform excepted functions.
341
4. Please provide a report, by agency, of the numbers of furloughed employees who
filed for unemployment compensation during the shutdowns and the amounts paid
to agency employees. Please describe any costs that will be incurred by your
Department as a result of efforts to collect reimbursement of these payments after
routine pay is restored.
All furloughed employees were given the necessary forms and instructions to file for
unemployment compensation. Some employees filed their forms through the employing
activity (in VA approximately 230 facilities), some filed directly with the unemployment
offices, and some never filed. Employees exercised their own options and judgment
regarding this matter, and VA has no centralized source of information on the disposition
of their claim forms.
Every quarter VA Central Office receives firom each of the fifty States and the District of
Columbia a list that contains the social security number, name, and amount of
unemployment compensation paid each claimant charged to VA. This list is received
approximately six weeks after the quarter ends. Most employees paid unemployment due
to the furloughs will be reflected in the current quarter that ends March 30, 1996. We wdll
receive the list approximately May 15, 1996 and will be pleased to provide the Committee
with the total amount of unemployment compensation indicated. It should be noted,
however, that the quarterly consolidated reports fi-om the states and Department of Labor
do not indicate the reason for unemployment (e.g., fliilough, separation, resignation), and
that the amount will presumably include costs which are not directly related to the
shutdowns. Similar information for the same quarter of the previous year will also be
provided, which may give the Committee some basis for comparison
Each State and the District of Columbia have laws covering the collection of over-
payments. Some States collect the over-payments, some States require the employer to
collect over-payments, and some States do not consider retroactive pay an over-payment
and allow the claimants to keep both pay and compensation. Given the diversity of
policies and procedures in each jurisdiction, it is not possible to determine associated
costs. However, we currently have all the employing facilities contacting their local
Unemployment Offices to determine local State policies and to assist the State with any
over-payment collections.
i
342
7. Please provide stalling levels for all public affairs offices in the Department
during the shutdowns.
Two employees from the VA public affairs staff were excepted during the November 1995
shutdown (the Assistant Secretary for Public and Intergovernmental Affairs and the
Deputy Assistant Secretary for Public Affairs), and three employees were excepted during
the December 1995-January 1996 shutdown (the two employees excepted during the
November shutdown plus one clerical support employee).
8. Please report the number and furlough status of political appointees, noncareer
Senior Executive Service personnel, and Schedule C appointees, by agency, during
each shutdown.
Category Employees Excepted November Excepted Dec 1995/
1995 January 1996
13 13
0 0
1 1
14 14
10. How many FTEs are needed to run the tape to pay the VA's compensation and
pension benefits?
We do not have information solely on processing compensation and pension benefits. We
do have an estimate on the number of employees required to process both compensation
and pension and education benefits. A total of 3 1 employees were required to run the
February tape.
Presidential
13
Appointees
Schedule C
13
Noncareer SES
7
Total
33
343
List of Attachments (Shutdown PlansAJpdates FY 1996);
• September 15, 1995 (implemented during November shutdown)
• November 17, 1995 (supplementary plan to recall a limited number of employees if the
November shutdown had lasted more than one week)
• December 14, 1995 (implemented during December- January shutdown)
• January 23, 1996 (developed on the basis of the continuing resolution then in eflFect,
PL 104-92; not implemented as no shutdown occurred)
I
344
Addendum to Shutdown Plan November 17, 1995
Supplementary Plan to Recall Limited Number of Employees if November Shutdown Had
Lasted Over One Week
345
THE DEPUTY SECRETARY OF VETERANS AFFAIRS
WASHINGTON
iWOV 1 7 ISSb
Mr. John A. Kosklnen
Deputy Director for Management
OflBce of Mana:gement and Budget
Executive Office of the President
Room 260 Old Executive Office Bldg.
Washington, DC 20503
Dear Mr. Kos]
E^ndosed as requested Is the Department's response to questions related
to a continuing lapse of appropriations and Its affect on our operations.
Should the shutdown last more than one week, we would need to recall
additional employees \dio are currently furloughed so that operations vital to
the delivery of benefits and health care can be maintained.
Your early approval of this revised shutdown plan will be appreciated.
Sincerely yoi
Hershel W
Enclosures
346
QUESTION 1
DEPARTMENT OF VETERANS AFFAIRS
UPDATE ON EXCEPTED/FURLOUGHED EMPLOYEES
CURRENT ESTIMATE REVISED ESTIMATE
EXCEPTED FURLOUGHED EXCEPTED FURIjOUGHED
200392 36^54 205,668* 33.411
* This number includes 1,700 eoqdoyees being recalled to help with beo^its processing
and 2,929 eaq)loyees in Veterans Health Administratioa which is a more accurate estimate
of the actual number of ei]q>loyees needed to provide and to support of delivery of health
care.
347
QUESTION 2
EFFECT OF CONTINUING LAPSE
OF APPROPRIATION
VETERANS HEALTH ADMINISTRATION
An extended government shutdown will have significant impact on the ability of the
Department of Veterans Affairs to continue providing quality health care to the nations
veterans. A VA facility's ability to purchase goods, equipment, supplies, or services is
dependent on the willingness of vendors and contractors to extend credit to the government
As long as vendors and contractors choose to continoe providing goods and services without
leimborsement, VA can continoe to provide healdi care.' In the absence of this willingness to
'^oaT VA payments, health care may be curtailed. Exarq>les of potential problems arising
from VA's inability to pay for goods and services are provided below.
House Staff Disbursements - Affiliated medical schools may not be able to pay 5,000 or more
medical and dental residoits' salaries. This will impair our abUity to continue providing
patient care at VA medical centers.
Utility Service Contracts - Basic utilities such as dectrici^, natural gas and trash may be
terminated due to non-^yment of utility bills.
Medical Equipment Service Contracts - Ser\dce maintenance contracts for MRI, CT and other
major medical equipment in more than 100 medical centers may be terminated by the vendors
for non-payment of services.
Pharmaceuticals/Medical Supplies - Drugs and other pharmaceuticals supplies may not be
replenished by vendors due to non-payment of previous drugs and supplies delivered. Stocks
of some medical supplies such as sutures, bandages and adult diapers costing more than $20
million per year may not be replenished by prime vendors.
Basic Subsistence Supplies - Some local vendors are unwilling or unable to extend credit to
VA facilities to purchase basic foodstuffs such as produce, meat and dairy products. Already,
vendors in Beckley, West Virginia and San Juan, Puerto Rico are indicating that they wUl not
be able to continue to provide food supplies on a credit basis.
Contract Hospitalization and Fee Basis - Up to one million episodes of emergent care of
veterans arc provided in non-VA facilities and may not be available on a contract or fee-
basis.
Prosthetics Service Contracts - Local and small contracts may refuse VA orders to
manufacture and repair prosthetic devices for VA patients without payment, leaving patients
without artificial limbs, wheelchairs and other prosthetic devices.
348
QUESTION 2
2.
Veterans Health Administration
• Construction Contracts - Constniction contracts totaling nearly $500 million may Ije halted or
delayed due to VA's inability to make regular payments. Subcontracts may default on their
payments for labor and materials.
• General Contracts - Services such as ambulance and air ambulance may be terminated due to
non-payment for previous services rendered.
• State Veterans Homes- As maiqr as 16,000 veterans may be! foiced to relocate to VA medical
centers or to be discharged due to non-payment for previous services.
• &neigeacy Pr^Koedness- The Dq>aitmeatofVeteransAfEairs' ability to respond to national
emetgencies may be conq)ionused by an extended government shutdown.
• Employee Hardship Issues - Intoiuption of enq)layee payments may result in significant
hardships to dq)artinent enq)Ioyees. For exanq)Ie many iemployees many not possess
sufficient resources to make mortgage, housing, transportation or medical care payments. In
other instances, employee deductions for alimony, thrift savings plan, pensions, diild
support, or wage garnishment may result in legal difficulties.
349
QUESTION 2
EFFECT OF CONTINUING LAPSE
OF APPROPRIATION
VETERANS BENEFITS ADMINISTRATION
• 3.3 miUion compensation and pensions checks totaling $ U billion for veterans and other
beneficiaries normally deUvercd December 1, 1995, will be delayed.
• For every week VA's regional ofBces cannot process daims, 7,000 letroacdve conqwnsation
and pensions awards worth an average of $13 million will be delayed.
• The current pending woddoad of conq)ensation and peoaons cases will grow by 1 1,000 cases
per day. This will reverse FY 1994 and FY 1995 progress in reducing the backlog from
ahnost 600.000 cases to 380.000 currently.
• 70,000 pending claims for educational assistance for diis fall's «irollment have not been
processed. This will increase by 10.000 if the shutdown goes one more week.
• 200.000 monthly GI Bill enrollment verifications are sdieduled.to be released on November
24. If these forms are not sent out and returned, vetenuis and bther beneficiaries will not
receive their monthly education benefit check.
• Nearly 1.000 seriously disabled veterans in VA's Vocational Rehabilitation program will be
delayed in seeing a VA counselor each day the shutdown continues.
• For ev«y week VA's insurance centers are not open, insurance death claim benefits would be
delayed to 3.500 survivors at a value of $19.2 million.
• Similarly, insurance dividend payments of $18 million to nearly 45,000 veterans would be
delayed each week a shutdown continues.
• The funds required for the pay period ending November 25 may not be available in time to
provide regular paychecks and electronic funds transfer for employees scheduled for
December 1 (EFT) and December 5.
40-190 97 - 12
350
QUESTION 2
EFFECT OF CONTINUING LAPSE
OF APPROPRIATION
OFFICE OF GENERAL COUNSEL
Cuneatly, the Office of Geaeral Counsel (OGC) has designated only one legal advisor in
each state as "essential" exoq)t in a few limited circumstances where the Depaitaaeat was
involved ia active judicial litigation. In VA Central Office, the OGC has designated only the
General Counsel, die Deputy General Counsel and one administrative assistant as essential.
We speculate that if the shutdown continues b^ond this week; -the following adverse
consequences will oocor. Fiist, various pending litigatioilbisfbrevanoustnbunals such as die
EEOC, MSPB, FLRA, and OOVA will be adversely affected due to lack of lawyers and legal
staff to handle the cases. The affect of this will be to prolong decisions affecting the rights of
management, employees and veterans. We also believe that hi^ volume monetary
coUecdons in various legal programs administered by die OGC such as Mcxlial Caie Cost
Recovery and bankiuptcy will stop due to lack of personnel to process die cases.
Government contracts requiring review by this office may also be deU^cd. Some of these
contracts involve millions of dollars in Government obligations. Due to the scardty of
lawyers, all matters in the field requiring legal advice or review at our VA medical centers,
national cemeteries and regional offices will be delayed- Finally, in VA Central office,
pending legislative and regulatory matters requiring legal review and die processing and
rendering of final Departm«ait d«:isions in information lawand EEO matters will be
adversely afiiected. The ultimate monetary cost to the Dq)artmen<. due to the continued
shutdown of the OGC is difficult to assess. However, it is clear that a sustained inability of
this office to provide competent and timely legal advice both here and in the field will
eventually subject both the Department and its employees to unnecessary legal risks and
monetary loss.
351
QUESTION 2
EFFECT OF CONTINUING LAPSE
OF APPROPRIATION
OFFICE OF MANAGEMENT
The Department' Financial Managemeot System has been unavailable to all system users
since implementation of the VA's shut down plan on November 14. 1995. Since this time,
vendor's have gone unpaid for both FY 95 and FY 96 invoices creating a potential serious
crisis for VHA's Hospital System. Without payment, the hospitals will begin to have
problems acquiring additional goods and Gervices from these veadocs. Medical Care unpaid
obligations total $2.57 billion. This will not address payment problems for obligations
incurred since Novonber 14 that are already occurring. These include payments for
subsistence (primarily food) provided by local small bu^ess and benefidaiy travel for
veterans.
352
QUESTION 3
MAJOR CONTRACTS THAT WILL BE SUSPENDED
DUE TO SHUTDOWN
Phannaceutical Prime Vendors provide most of our pharmaceutical requirements
(approximately $3 million each day). These prime vendors wo± on a cash flow basis and as
such, delays in payment have extreme consequences on their business environment. ' We are
currently discussing the "shutdown" situation with them in hopes of averting an interruption
of services, which would be extremely costly and, unless alternate sources of supply are
found, life threatening.
Nursing Home Care contracts. These health care providers require pronyjt payment If the
shutdown persists, these contractors could conceivably refiise further patients or require
current patients be displaced.
8a/small businesses. We have been advised of a least one instance in which 8a firm,
concerned that tiie payment intoniptioa will mean an inabihty to meet payroll, will be
required to suspend work. This will affect many things that the medical centers need to
operate including many perishable food items.
We are conconed that Pronqrt Payment Act p^ialties will accrue. For instance, with regard
to phannaceutical prime vendors, orders placed on November 14 would begin accruing
interest penalties on Novembw 30. By December 30, if we are still unable to pay our
vendors, we will begin incurring interest payments against a principal of approximately $90
million. ($3 million per day in orders X 30 days).
Contracts funded from the NCS operating appropriation that are suspended include those for
maintenance of equipment of cemetery grounds; opiating support contracts such as trash
collection, pest control, and custodial services; and those for AD? services. Additionally,
contracts for maintenance and repair projects at the national cemeteries will not be awarded
during this period. Only contracts related to interments at closed or inactive national
cemeteries, as well as any emergency contracts that may be required to protect life and
property, will be funded during this period.
There are also two types of contracts in NCS which are funded from the Compensation and
Pensions (C&P) appropriation: Graveliners are needed to continue the essential interment
function; therefore, contracts for the purchase of graveliners will continue. Processing of
implications for headstones and markers had been discontinued during the shutdown;
therefore, those contracts arc currently suspended.
Most all VBA contracts are suspended during the shutdown. This includes one time
contracts for special studies, OIT contracts for systems design and development.maintenance,
or installation; property management; non-ADP equipment maintenance;
telecommunications, and administrative services.
353
Shutdown Plan December 14, 1995
Implemented During December 1995 - January 1996 Shutdown
354
THE DEPUTY SECRETARY OF VETERANS AFFAIRS
WASHINGTON
DEC 1 4 1^^
Mr. John A. Koskinen
Deputy Director for Management
Office of Management and Budget
Executive Office of the President
Room 260 Old Executive Office Bldg
Washington, DC 20503
Dear Mr. Koskinen:
Enclosed is an updated shutdown plan for the Department of Veterans
AflEEurs.
As requested, the updated plan reflects experience gained in the November
shutdown, and indicates what adjustments would be necessary should a shutdown
last more than one week.
Sincerely yours,
Hershe! W. Gober
Enclosure
355
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357
Plans for Implementing a Shutdown
Department of Veterans Affairs
Veterans Health Administration
Impact of Absence of Appropriations
The Veterans Health Administration will discontinue all nonexcepted activities in its
headquarters oflBces, medical centers, outpatient clinics, and other health care support
facilities. Employees will be notified of their status; those who perform nonexcepted
activities will be given fiuiough notices in accordance with shutdown guidance and be
advised to listen to news broadcasts to learn if the fimding situation has changed.
Excepted activities to provide health care, research, and protection of life and property
will be fully maintained.
Medical Care
No veteran will have his or her care delayed, deferred, canceled, or otherwise adversely
impacted as a result of shutdown activities. In the field, excepted activities have been
identified to include all direct patient care activities and those support activities necessary
to assist direct patient care providers and maintain service to patients. All excepted
activities will be fully maintained during any furlough period. All employees engaged in
nonexcepted activities will be furioughed.
Canteen Service
The VA Canteen Service is funded by a revolving fiand; therefore, all VCS activities will
be fully maintained during any furlough period to support employees engaged in excepted
activities.
Protection of Life and Property
Police and Security services will be provided in order to ensure the safety of veterans and
their families and employees while in a VA facility. Continuation of these services is also
necessary to protect and secure government property, buildings, and grounds. These
services will be fully maintained during any furlough period.
358
Prosthetic and Medical Research
Many research projects in VA are fionded by grants from outside sources, therefore, they
will be fully maintained during any furlough period. Additionally, a number of projects are
at critical stages where their shutdown could endanger the lives of patients who are
participating in them as test subjects. These activities will be fiiUy maintained during any
furlough period. All employees not identified with these excepted activities or not
otherwise funded will be flirloughed.
VHA Headquarters Staff
Medical Administration and Miscellaneous Operating Expenses is a personnel intensive
activity. A limited number of employees have been identified to perform excepted
activities such as managing VHA's overall operations, organ transplantation issues,
operational and policy issues for VA medical centers, allocation of resources to excepted
activities, and oversight of construction contractual obligations. These activities will be
fiiUy maintained during any fiiriough period. Employees not identified with these limited
excepted activities will be furloughed.
Shutdown Over One Week
In the event a shutdown were to last over one week, VHA estimates that an additional
900-1,000 employees would need to be recalled at any given time to respond to weather-
related or other emergencies (estimate based on typical winter weather experience). Also,
a small number of technical and clinical employees (approximately 10) would be recalled
in Central Office to provide support and guidance fo excepted health care activities in the
field.
Updated 12/12/95
i
359
Plans for Implementing a Shutdown
Department ot Veterans AfTairs
Veterans Benefits Administration
Impact of Absence of Appropriations
The Veterans Benefits Administration will discontinue all nonexcepted activities in its
headquarters offices. Area Offices, Benefits Centers, and Regional Offices. Employees
who perform nonexcepted activities will be advised of their status, given furlough notices
in accordance wth shutdown guidance, and advised to listen to news broadcasts to learn if
there is a change in the fiinding situation Employees performing excepted services will be
available to serve veterans and their families.
VBA employees identified as performing excepted activities in Central Office will oversee
management of VBA excepted operations. Excepted employees at field stations will
determine eligibility for benefits associated with other excepted VA activities (claims for
burial, terminal illness, medical care), receive and process payments, receive and date
benefits claims, assist applicants in filing claims, respond to telephone inquiries about VA
benefits, manage issues involving government property, and maintain VBA automated
records systems. These activities will be fiilly maintained during any furlough period.
Shutdown Over One Week
No significant change in the shutdown plan is anticipated. If necessary, a limited number
of employees would be recalled in order to deal with emergency situations related to
excepted activities.
Updated 12/12/95
360
Plans for Implementing a Shutdown
Department of Veterans Affairs
National Cemetery System
Impact of Absence of Appropriations
The National Cemeteiy System will discontinue all nonexcepted activities in the absence of
appropriations. Employees will be advised of their status, provided furlough notices in
accordance with shutdown guidance, and advised to listen to news broadcasts to leam if
there is a change in the funding situation.
Veterans and their families have placed reliance on the National Cemetery System to
provide gravesites at their time of need. Denial of burial to these applicants would impose
financial hardship, and in many cases, mental anguish. Delay of interment may also result
in health hazards for employees or others. Therefore, the National Cemeteiy System will
continue to bury elig^le veterans during the period covered by the absence of
appropriations. Central Office employees performing excepted activities will provide
management direction and control, and operational support to the field, ^nployees in the
field performing excepted activities determine eligibility for burial, supervise interment
operations, recdve applications for headstones and gravemarkers, and provide for
property protection.
Shutdown Over One Week
No significant change in the shutdown plan is anticipated. If necessary, a limited number
of employees would be recalled in order to deal with emergencies related to excepted
activities.
Updated 12/12/95
361
Plans for Implementing a Shutdown
Department of Veterans Affairs
Headquarters Support Organizations
Impact of Absence of Appropriations
In the absence of appropriations, headquarters support organizations and their
outstationed activities which provide technical assistance to other headquarters elements
and to field operations will stmtdown all nonexcepted activities. Employees will be
advised of their status, provided fiulough notices in accordance with shutdown guidance,
and advised to listen to news broadcasts to learn if the fijnding situation has changed.
Employees retained to perform shutdown activities wll secure all files and government
property, notify customers of our reduced activity level, turn oflF computer operations, and
leave their offices and enter fiulough status.
Excepted activities performed during the shutdown period will include management of the
department; information resources management and financial support to excepted
activities through outstationed components in Austin, Texas; excepted activities of the
General Counsel throughout the United States; and continuation of fimded activities such
as the Offices of Acquisition and Materiel Management and Small and Disadvantaged
Business Utilization, which are fimded through a revolving flmd.
Acquisition and Materiel Management personnel will continue to secure and arrange for
delivery of medical supplies and other essential goods to facilities where excepted
activities are taking place. They will maintain contacts with vendors and ensure on time
delivery of requested items.
The information resources and financial management employees in Austin will operate on-
line systems and run situation-dependent required batch processing operations as needed
in support of excepted activities. They will also process payroll for the periods prior to
funding interruption, process payroll for funded activities, and, as part of shutdown
activities, will process vendor payments for obligations incurred with prior year or
otherwise available funds.
The General Counsel employees will continue with ongoing court appearances, process
Court of Veterans Appeals cases, and provide guidance and advice to excepted activities
as needed.
Employees performing excepted activities in headquarters will provide technical support
to excepted activities in the field as well as to other headquarters organizations Protection
oflife and property activities will continue Included in these activities are protection of
the Secretary, ongoing undercover work associated with criminal investigations, and
investigations of incidents related to excepted activities.
362
Note: In the event of a shutdown December 15, 1995, estimates of fiuloughed employees
include five employees of the VA Law Enforcement Training Center who would be
required to Work through December 22 in order to complete the baac class currently in
session, and would then be placed on a fiirlough status.
Shutdown Over One Week
No significant change in the shutdown plan is antidpated. If necessary, a limited number
of employees would be recalled to deal with emergendes related to excepted activities, or
in order to implement administrative requirements for extending fiirioughs or similar
fiinctions.
Updated 12/12/95
363
VA Plan for Implementation of Furloughs in Event of Lapsed Appropriations
Responsible Organization
The OflSce of Human Resources and Administration (OH&RA) will be the responsible VA
office for coordinating activities necessary to implement lapsed appropriation and similar
furloughs including the following:
1) Be the point of contact with 0MB and 0PM on all matters related to potential
fiirloughs;
2) Provide infonnation regarding plans for furiough to the VA National Partnership
Council;
3) Prepare instructions and guidance to all VA facilities regarding furlough issues, and
4) Conduce briefings/conferences to field and central office officials regarding furlough
information and procedures.
Furlough Process
OHR&A will provide in advance written procedures and master furlough notices to all VA
organizations and ensure complete pre-flirlough distribution to all facilities through a
variety of electronic media.
OHR&A will initiate conference calls to ensure that each facility's lapsed appropriation
contact official has complete understanding of procedures and the budget situation as it
develops.
OHR&A will plan with all VA facilities that in the event that 0MB advdses that there will
be no VA appropriations as of a given date, furlough notices will be delivered to affected
employees consistent with available government-wide guidance.
Facilities will keep employees and unions informed as to the status of possible furlough,
including exclusions fi-om furlough.
Facilities will individually deliver all furlough notices to affected employees.
Each facility will inform all employees of the means by which employees will be notified to
return to work after the furlough.
364
Shutdown Plan January 23, 1996
Developed on Basis of PL 104-92; Not Implemented As No Shutdown Occurred
365
THE DEPUTY SECRETARY OF VETERANS AFFAIRS
WASHINGTON
JAN 23 1996
Mr. John A. Koskinen
Deputy Director for Management
Office of Management and Budget
Executive Office of the President
Room 260 Old Executive Office Bldg.
Washington, DC 20503
Dear Mr. Koskinen:
Enclosed are an updated shutdown plan for the Department of Veterans Affairs,
and a copy of the data on fuiloughed versus excepted employees which was previously
provided to your staff.
As requested, the updated plan is based on provisions of P.L. 104-92.
Sincerely yours,
Enclosures
366
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368
Plans for Implementing a Shutdown
Department of Veterans Afiairs
Veterans Health Administration
Impact of Absence of Appropriations
The Veterans Health Administration will discontinue all nonexcepted activities in its
headquarters offices, medical centers, outpatient clinics, and other health care support
facilities. &nployees will be notified of their status; those who perform nonexcepted
activities will be given fiiriough notices in accordance with shutdown guidance and be
advised to listen to news broadcasts to learn if the funding situation has changed.
Excepted activities to provide health care, research, and protection of life and property
will be fiilly maintained.
Medical Care
No veteran will have his or her care delayed, deferred, canceled, or otherwise adversely
impacted as a result of shutdown activities. In the field, excepted activities have been
identified to include all direct patient care activities and those support activities necessary
to assist direct patient care providers and maintain service to patients. All excepted
activities vdll be fiiUy maintained during any furlough period. All employees engaged in
nonexcepted activities will be fiirloughed. Payments to contractors for services directly
related to patient health and safety will be made as provided in P.L. 104-92.
Canteen Service
The VA Canteen Service is funded by a revolving fimd; therefore, all VCS aaivities will
be fully maintained during any furlough period to support employees engaged in excepted
activities.
Protection of Life and Property
Police and Security services will be provided in order to ensure the safety of veterans and
their families and employees while in a VA facility. Continuation of these services is also
necessary to protect and secure government property, buildings, and grounds These
services will be fully maintained during any fiiriough period.
369
Prosthetic and Medical Research
VA research projects are funded from a two-year appropriation; consequently, it was
possible to continue funding during the first two FY 1996 shutdowns. However, because
the two-year appropriation is now exhausted, any further shutdowns will result in a
cessation of funding. Projects funded from non-VA sources, e.g., pharmaceutical
companies, may be fiilly maintained during any future shutdown period. Additionally,
projects will be maintained which are at critical stages where shutdown could endanger the
lives of patients \\^o are participating as test subjects. Excepted activities may also
involve protection of the scientific viability of a project or the care of animal subjects.
Employees not identified with excepted activities or not otherwise frinded will be
furloughed.
VHA Headquarters Staflf
Medical Administration and Miscellaneous Operating Expenses is a personnel intensive
activdty. A limited mmiberofemployees have been identified to perform excepted
activities such as managing VHA's overall operations, organ transplantation issues,
operational and policy issues for VA medical centers, allocation of resources to excepted
activities, and oversight of construction contractual obligations. These activities will be
fully maintained during any fiuiough period. Employees not identified with these limited
excepted activities will be fiirloughed.
Shutdown Over One Week
In the event a shutdown were to last over one week, VHA estimates that an additional
900-1,000 employees would need to be recalled at any given time to respond to weather-
related or other emergencies (estimate based on typical winter weather experience). Also,
a small number of technical and clinical employees (approximately 10) would be recalled
in Central OflBce to provide support and guidance to excepted health care activities in the
field.
Updated 1/23/96
P.L. 104-92
370
Plans for Implementing a Shutdown
Department of Veterans Affairs
Veterans Benefits Administration
Impact of Absence of Appropriations
All veterans benefits programs vnll be administered at VBA field offices. Excepted
employees will manage and deliver compensation, pension, education, loan guaranty,
insurance, and vocational rehabilitation and counseling benefits, and vnll provide support
operations such as information technology, finance, administrative services and
management directioa VBA employees identified as performing excepted activities in
Central Office will oversee management of VBA excepted operations.
Employees v^o perform nonexcepted activities will be advised of their status, given
fiirlough notices in accordance with shutdown guidance, and advised to listen to news
broadcasts to learn if there is a change in the fimding situation.
Shutdown Over One Week
No significant change in the shutdown plan is antidpated. If necessary, a limited number
of employees would be recalled in order to deal with emergency situations related to
excepted activities.
Updated 1/22/96
P.L. 104-92
371
Plans Tor Implementing a Shutdown
Department of Veterans Aflairs
National Cemetery System
Impact of Absence of Appropriations
The National Cemetery System will discontinue all nonexcepted activities in the absence of
appropriations. Employees will be advised of their status, provided fiirlough notices in
accordance with shutdown guidance, and advised to listen to news broadcasts to learn if
there is a change in the funding situation.
Veterans and their families have placed reliance on the National Cemetery System to
provide gravesites at their time of need. Denial of burial to these applicants would impose
financial hardship, and in many cases, mental anguish. Delay of interment may also result
in health hazards for employees or others. Therefore, the National Cemetery System will
continue to bury eligible veterans during the period covered by the absence of
appropriations. Central Office employees performing excepted activities will provide
management direction and control, and operational support to the field. Employees in the
field performing excepted activities determine eli^ility for burial, supervise and conduct
interment operations, process applications for headstones and gravemarkers, and provide
for property protectioa
Shutdown Over One Week
No significant change in the shutdown plan is anticipated. If necessary, a limited number
of employees would be recalled in order to deal with emergencies related to excepted
activities.
Updated 1/22/96
P.L. 104-92
372
Plans for Implementing a Shutdown
Department of Veterans Affairs
Headquarters Support Organizations
Impact of Absence of Appropriations
In the absence of appropriations, headquarters support organizations and their
outstationed acti\dties which pro\dde technical assistance to other headquarters elements
and to field operations 'mil shutdown all nonexcepted activities. Employees will be
advised of their status, provided fiirlough notices in accordance with shutdown guidance,
and advised to listen to news broadcasts to learn if the fiinding situation has changed.
Employees retained to perform shutdown activities will secure all files and government
property, notify customers of our reduced activity level, turn ofif computer operations, and
leave their ofiSces and enter fiuiough status.
Excepted activities performed during the shutdown period will include management of the
department; information resources management and financial support to excepted
activities through outstationed components in Austin, Texas; excepted activities of the
General Counsel throughout the United States; and continuation of fimded activities such
as the OfiSces of Acquisition and Materiel Management and Small and Disadvantaged
Business Utilization, which are funded through a revolving fiind. As authorized under
P.L.94-102, adjudication of veterans benefits appeals and medical contracts appeals will
continue.
Acquisition and Materiel Management personnel will continue to secure and arrange for
delivery of medical supplies and other essential goods to facilities where excepted
activities are taking place. They will maintain contacts with vendors and ensure on time
delivery of requested items.
The information resources and financial management employees in Austin will operate on-
line systems and run situation-dependent required batch processing operations as needed
in support of excepted activities, including those associated with PL 104-92 They will
also process payroll for the periods prior to fiinding interruption, process payroll for
funded activities, and process vendor payments for obligations incurred with prior year or
otherwise available funds.
The General Counsel employees will continue with ongoing court appearances, process
Court of Veterans Appeals cases, protect property interests in the loan guaranty program,
and provide guidance and advice to excepted activities as needed.
373
Employees performing excepted activities in headquarters will provide technical support
to excepted activities in the field as well as to other headquarters organizations and will
protect the government's interests in managing contracts which are fully funded and time
sensitive (e.g., VACO renovation). Protection of life and property activities will continue.
Included in these activities are protection of the Secretary, ongoing undercover work
associated Tmth criminal investigations, and investigations of incidents related to excepted
activities.
Shutdown Over One Week
No significant change in the shutdown plan is anticipated. If necessary, a limited number
of employees would be recalled to deal with emergencies related to excepted activities, or
in order to inclement administrative requirements for extending fiirloughs or similar
fimctions.
Updated 1/22/96
P.L. 104-92
374
VA Plan for Implementation of Furloughs in Event of Lapsed Appropriations
Responsible Organization
The Office of Human Resources and Administration (OH&RA) will be the responsible VA
office for coordinating activities necessary to implement lapsed appropriation and similar
furloughs including the following:
1) Be the point of contact with 0MB and 0PM on all matters related to potential
fiirioughs;
2) Provide information regarding plans for furlough to the VA National Partnership
Council;
3) Prepare instructions and guidance to all VA fecilities regarding furlough issues, and
4) Conduce briefings/conferences to field and central office officials regarding furiough
information and procedures. .
Furlough Process
OHR&A will provide in advance written procedures and master flirlough notices to all VA
organizations and ensure complete pre-flirlough distribution to all facilities through a
variety of electronic media.
OHR&A will initiate conference calls to ensure that each facility's lapsed appropriation
contact official has complete understanding of procedures and the budget situation as it
develops.
OHR&A will plan with all VA facilities that in the event that 0MB advises that there will
be no VA appropriations as of a given date, furlough notices will be delivered to affected
employees consistent with available government-wide guidance.
Facilities will keep employees and unions informed as to the status of possible flirlough,
including exclusions from furlough.
Facilities will individually deliver all furlough notices to affected employees.
Each facility will inform all employees of the means by which employees will be notified to
return to work after the furlough.
a and c^anplan.doc
375
U. S. Department of Justice
Office of Legal Counsel
Office of Ihe Washinglon. DC. 20S30
Assisuni Attorney General
August 16, 1995
MEMORA>fDUM FOR ALICE RIVLIN
DIRECTOR, OmCE OF MANAGEMENT AND BUDGET
From: Walter Dellinger
Assistant Attorney General
Re; Government Operations in the Event of a Lapse in Appropriations
This memorandum responds to your request to the Attorney General for advice
regarding the permissible scope of government operations during a lapse in appropriations.'
The Constitution provides that "no money shall be drawn from the treasury, but in -
consequence of appropriations made by law." U.S. Const, art. I, § 9, cl. 7. The treasury is
further protected through the Antideficiency Act, which among other things prohibits all
officers and employees of the federal government from entering into obligations in advance
of appropriations and prohibits employing federal personnel except in emergencies, unless
otherwise authorized by law. See 31 U.S.C. § 1341 et seq.'
In the early 1980s, Attorney General Civiletti issued two opinions with respect to the
implications of the Antideficiency Act. See "Applicability of the Antideficiency Act Upon A
Lapse in an Agency's Appropriations," 4A Op. O.L.C. 16 (1980); "Authority for the
Continuance of Government Functions During a Temporary Lapse in Appropriations," 5 Op.
O.L.C. 1 (1981) (1981 Opinion). The 1981 Opinion has frequently been cited in the ensuing
years. Since that opinion was written, the Antideficiency Act has been amended in one
' We do not in this memorandum address the different set of issues that anse when the limit on the public
debt has been reached and Congress has failed lo raise the debt ceiling.
• For the purposes of this inquiry, there are two relevant provisions of the Antideficiency Act. The first
provides that "[a]n officer or employee of the United Stales Government or the Distnct of Columbia government
may not . . . involve either government in a contract or obligation for the payment of money before an
appropriation is made unless authorized by law." 31 U.S.C. § 1341(a)(1)(B). The second provides that "(a)n
officer or employee of the United Stales Government . . . may not accept voluntary services ... or employ
personal services exceeding that authorized by law e.xcept for emergencies involving the safety of human life or
the protection of property." 31 U.S.C. § 1342.
376
respect, and we analyze the effect of that amendment below. The amendment amplified on
the emergencies exception for employing federal personnel by providing that "[a]s used in
this section, the term 'emergencies involving the safety of human life or the protection of
property' does not include ongoing, regular functions of government the suspension of which
would not imminently threaten the safety of human life or the protection of property." 31
U.S.C. § 1342.
With respect to the effects of this amendment, we continue to adhere to the view
expressed to General Counsel Robert Damus of the Office of Management and Budget that
"the 1990 amendment to 31 U.S.C. § 1342 does not detract from the Attorney General's
earlier analyses; if anything, the amendment clarified that the Antideficiency Act's exception
for emergencies is narrow and must be applied only when a threat to life or property is
imminent." Letter from Walter Dellinger to Robert G. Damus, October 19, 1993. In order
to ensure that the clarification of the 1990 amendment is not overlooked, we believe that one
aspect of the 1981 Opinion's description of emergency governmental functions should be
modified. Otherwise, the 1981 Opinion continues to be a sound analysis of the legal
authorities respecting government operations when Congress has failed to enact regular
appropriations bills or a continuing resolution to cover a hiatus between regular
appropriations.
I.
Since the issuance of the extensive 1981 Opinion, the prospect of a general
appropriations lapse has arisen frequently. In .1981, 1982, 1983, 1984, 1986, 1987 and
1990, lapses of funding ranging from several hours to three days actually did occur. While
several of these occurred entirely over weekends, others required the implementation of plans
to bring government operations into compliance with the requirements of the Antideficiency
Act. These prior responses to the threat of or actual lapsed appropriations have been so
commonly referred to as cases of "shutting down the government" that this has become a
nearly universal shorthand to describe the effect of a lapse in appropriations. It will assist in
understanding the true extent of the Act's requirements to realize that this is an entirely
inaccurate description. Were the federal government actually to shut down, air traffic
controllers would not staff FAA air control facilities, with the consequence that the nation's
airports would be closed and commercial air travel and transport would be brought to a
standstill. Were the federal government to shut down, the FBI, DEA, ATP and Customs
Service would stop interdicting and investigating criminal activities of great varieties,
including drug smuggling, fraud, machine gun and explosives sales, and kidnapping. The
country's borders would not be patrolled by the border patrol, with an extraordinary increase
in illegal immigratiqp as a predictable result. In the absence of government supervision, the
stock markets, commodities and futures exchanges would be unable to operate. Meat and
poultry would go uninspected by federal meat inspectors, and therefore could not be
marketed. Were the federal government to shut down, medicare payments for vital
operations and medical services would cease. VA hospitals would abandon patients and close
-2-
377
their doors. These are simply a few of the significant impacts of a federal government shut
down. Cumulatively, these actions and the others required as part of a true shut down of the
federal government would impose significant health and safety risks on millions of
Americans, some of which would undoubtedly result in the loss of human life, and they
would immediately result in massive dislocations of and losses to the private economy, as
well as disruptions of many aspects of society and of private activity generally, producing
incalculable amounts of suffering and loss.
The Antideficiency Act imposes substantial restrictions on obligating funds or
contracting for services in advance of appropriations or beyond appropriated levels,
restrictions that will cause significant hardship should any lapse in appropriations extend
much beyond those we have historically experienced. To be sure, even the short lapses that
have occurred have caused serious dislocations in the provision of services, generated
wasteful expenditures as agencies have closed down certain operations and then restarted
them, and disrupted federal activities. Nevertheless, for any short-term lapse in
appropriations, at least, the federal government will not be truly "shut down" to the degree
just described, simply because Congress has itself provided that some activities of
government should continue even when annual appropriations have not yet been enacted to
fund current activities.
The most significant provisions of the Antideficiency Act codify three basic
restrictions on the operation of government activities. First, the Act implements the
constitutional requirement that "No Money shall be drawn from the Treasury, but in
Consequence of Appropriations made by Law." U.S. Const, art. I, § 9, cl. 7. Second,
when no current appropriations measure has been passed to fund contracts or obligations, it
restricts entering into contracts or incurring obligations (except as to situations authorized by
other law). Third, it restricts employing the services of employees to perform government
functions beyond authorized levels to emergency situations, where the failure to perform
those functions would result in an imminent threat to the safety of human life or the
protection of property.' The 1981 Opinion elaborated on the various exceptions in the
Antideficiency Act that permit some continuing government functions, and we will only
summarize the major categories here:
• Multi-year appropriations and indefinite appropriations.
Not all government functions are funded with annual appropriations. Some operate
under multi-year appropriations and others operate under indefinite appropriations provisions
that do not require passage of annual appropriations legislation. Social security is a
prominent example of a program that operates under an indefinite appropriation. In such
' These restrictions are enforced by criminal penalties. An officer or employee of the United States who
knowingly and willfully violates the restrictions shall be fined not more than $5,000, imprisoned for not more
than 2 years, or both. 31 U.S.C. §1350.
-3-
378
cases, benefit checks continue to be honored by the treasury, because there is no lapse in the
relevant appropriation.
• Express authorizations: contracting authority and borrowing authority.
Congress provides express authority for agencies to enter into contracts or to borrow
funds to accomplish some of their functions. An example is the "food and forage" authority
given to the Department of Defense, which authorizes contracting for necessary clothing,
subsistence, forage, supplies, etc. without an appropriation. In such cases, obligating funds
or contracting can continue, because the Antideficiency Act does not bar such activities when
they are authorized by law. As the 1981 Opinion emphasized, the simple authorization or
even direction to perform a certain action that standardly can be found in agencies' enabling
or organic legislation is insufficient to support a finding of express authorization or necessary
implication (the exception addressed next in the text), standing alone. There must be some
additional indication of an evident intention to have the activity continue despite an
appropriations lapse.
• Necessary implications: authority to obligate that is necessarily implied by statute.
The 1981 Opinion concluded that the Antideficiency Act contemplates that a limited
number of government functions funded through annual appropriations must otherwise
continue despite a lapse in their appropriations because the lawful continuation of other
activities necessarily implies that these functions will continue as well. Examples include the
check writing and distributing functions necessary to disburse the social security benefits thai
operate under indefinite appropriations. Further.examples include contracting for the
materials essential to the performance of the emergency services that continue under that
separate exception. In addition, in a 1980 opinion, Atomey General Civiletti opined that
agencies are by necessary implication authorized "to incur those minimal obligations
necessary to closing [the] agency." The 1981 opinion reiterated this conclusion and
consistent practice since that time has provided for the orderly termination of those functions
that may not continue during a period of lapsed appropriations.
• Obligations necessary to the discharge of the President's constitutional duties and
powers.
Efforts should be made to interpret a general statute such as the Antideficiency Act to
avoid the significant constitutional questions that would arise were the Act read to critically
impair the exercise of constitutional functions assigned to the executive. In this regard, the
1981 Opinion noted that when dealing with functions instrumental in the discharge of the
President's constituti9nal powers, the "President's obligational authority . . . will be further
buttressed in connection with any initiative that is consistent with statutes - and thus with the
exercise of legislative power in an area of concurrent authority -- that are more narrowly
drawn than the Antideficiency Act and that would otherwise authorize the President to carry
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379
out his constitutionally assigned tasks in the manner he contemplates." 1981 Opinion, at 6-
7."
• Personal or voluntary services "for emergencies involving the safety of human life or
the protection of property."
The Antideficiency Act prohibits contracting or obligating in advance of
appropriations generally, except for circumstances just summarized above. The Act also
contains a separate exception applicable to personal or voluntary services that deal with
emergencies. 31 U.S.C. § 1342. This section was amended in 1990. We will analyze the
effects of that amendment in Part 11 of this memorandum.
Finally, one issue not explicitly addressed by the 1981 Opinion seems to us to have
been settled by consistent administrative practice. That issue concerns whether the
emergency status of government functions should be determined on the assumption that the
private economy will continue operating during a lapse in appropriations, or whether the
proper assumption is that the private economy will be interrupted. As an example of the
difference this might make, consider that air traffic controllers perform emergency functions
if aircraft continue to take off and land, but would not do so if aircraft were grounded. The
correct assumption in the context of an anticipated long period of lapsed appropriations,
where it might be possible to phase in some alternatives to the government activity in
question, and thus over time to suspend the government function without thereby imminently
threatening human life or property, is not entirely clear. However, with respect to any short
lapse in appropriations, the practice of past administrations has been to assume the continued
operation of the private economy, and so air traffic controllers, meat inspectors, and other
similarly situated personnel have been considered to be within the emergency exception of
§ 1342.
* The Attorneys General and this office have declined to catalog what actions might be undertaken this
heading. In 1981, for example, .\ttomey General Civiletti quoted Attorney General (later Justice) Frank
Murphy. "These constitutional powers have never been specifically defmed, and in fact cannot be, since their
extent and limitations are largely dependent upon conditions and circumstances. . . . The right to take specific
action might not exist under one state of facts, while under another it might be the absolute duty of the
Executive to take such action. " 5 Op. O.L.C. at 7 n.9 (quoting 39 Op. Atfy Gen. 343, 347-48 (1939)). This
power should be called upon cautiously, as the courts have received such executive branch assertions
skeptically. See, e.g.. Youneslown Sheet & Tube Co. v. Sawver. 343 U.S. 579 (1952); George v. Ishimaru.
849 F. Supp. 68 (D.D.C.). vacated as moot. No. 94-5111, 1994 WL 517746 (D.C. Cir.. Aug. 25. 1994). But
see Haig v. Agee. 453 U.S. 280 (1981); In re Neagle. 135 U.S. I (1890).
380
II.
The text of 31 U.S.C. §1342, as amended in 1990, now reads:
An officer or employee of the United States Government or of the District of
Columbia government may not accept voluntary services for either government
or employ personal services exceeding that authorized by law except for
emergencies involving the safety of human life or the protection of property.
This section does not apply to a corporation getting amounts to make loans
(except paid in capital amounts) without legal liability of the United States
Government. As used in this section, the term "emergencies involving the
safety of human life or the protection of property" does not include ongoing,
regular functions of government the suspension of which would not imminently
threaten the safety of human life or the protection of property.
31 U.S.C. § 1342. Because of the § 1342 bar on employing personal services, officers and
employees may employ personal services in excess of other authorizations by law only in
emergency situations.' This section does not by itself authorize paying employees in
emergency situations, but it does authorize entering into obligations to pay for such labor.
The central interpretive task under § 1342 is and has always been to construe the
scope of the emergencies exception of that section. When the 1981 Opinion undertook this
task, the predecessor to § 1342 did not contain the final sentence of the current statute,
which was added in 1990. Examining that earlier veVsion, the Attorney General concluded"
that the general language of the provision and the sparse legislative history of it did not
reveal its precise meaning. However, the opinion was able to glean some additional
understanding of the statute from that legislative history.
The Attorney General noted that as originally enacted in 1884, the provision forbade
unauthorized employment "except in cases of sudden emergency involving the loss of human
life or the destruction of property." 23 Stat. 17. He then observed that in 1950, Congress
enacted the modem version of the Antideficiency Act and accepted revised language for
The 1981 Opinion concluded ihai:
(djespiie the use of the term 'voluntary service,' the evident concern underlying this
provision is noi government agencies' acceptance of the benefit of services rendered
without compensation. Rather, the original version of § |1342J was enacted as part of an
urgent deficiency appropriation act in 1884, Act of May 1, 1994, ch. 37, 23 Stat. 15, 17, in
order to avoid elaims for compensation arising from the unauthorized provision of services
to the government by non-employees, and claims for additional compensation asserted by
government employees performing extra services after hours. This is, under |§ 1342],
government officers and employees may not involve government in contract for
employment, i.e., for compensated labor, except in emergency situations. 30 Op. Att'y
Gen. 129, 131 (1913).
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381
§ 1342 that originally had been suggested by the Director of the Bureau of the Budget and
the Comptroller General in 1947. In analyzing these different formulations, the Attorney
General stated that
[wjithout elaboration, these officials proposed that cases of sudden
emergency' be amended to 'cases of emergency,' 'loss of human life' to
'safety of human life,' and 'destruction of property' to 'protection of property.
These changes were not qualified or explained by the report accompanying the
1947 recommendation or by any aspect of the legislative history of the general
appropriations act for fiscal year 1951, which included the modem §[1341].
Act of September 6, 1950, Pub. L. No. 81-759, §1211, 64 Stat. 765.
Consequently, we infer from the plain import of the language of their
amendments that the drafters intended to broaden the authority for emergency
employment.
5 Op. O.L.C. at 9.
The 1981 Opinion also sought guidance from the consistent administrative practice of
the Office of Management and Budget in applying identical "emergencies" language found in
another provision. That other provision prohibits 0MB from apportioning appropriated
funds in a manner that would indicate the need for a deficiency or supplemental
appropriation, except in cases of "emergencies involving the safety of human life, [or] the
protection of property" -- phraseology identical to the pre- 1990 version of § 1342.*
Combining these two sources with the statutory text, the Attorney General articulated two
rules for identifying functions for which government officers may enter into obligations to
pay for personal services in excess of legal authority other than § 1342 itself:
' 31 U.S.C. § 1515 (recodified rrom § 665(e) at ihe lime of the Civiletli opinion). Analyzing past
adminisiraiive practice under this statute. Attorney General Civiletli found that:
Directors of the Bureau of the Budget and of the OfHce of Management and Budget have
granted dozens of deflciency reapportionments under this subsection in the last 30 years,
and have apparently imposed no test more stringent than the articulation of a reasonable
relationship between the funded activity and the safety of human life or the protection of
property. Activities for which deficiency apportionments have been granted on this basis
include [FBI] criminal investigations, legal services rendered by the Department of
Agriculture in connection with state meat inspection programs and enforcement of the
Wholesome Meat Aa Of 1967, 21 U.S.C.§§ 601-695, the protection and management of
commodity inventories by the Commodity Credit Corporation, and the investigation of
aircraft accidents by the National Transportation Safety Board. These few illustrations
demonstrate th^ common sense approach that has guided the interpretation of § 665(e).
Most important, under § 665(e)(2), each apportionment or reapportionment indicating the
need for a deficiency or supplemental appropriation has been reported contemporaneously
to both Houses of Congress, and, in ihe face of these reports. Congress has not acted in
any way to alter the relevant 1950 wording of § 665(e)(1)(B), which is, in this respect,
identical to § 665(b).
-7-
382
First, there must be some reasonable and articulable connection between the
function to be performed and the safety of human life or the protection of
property. Second, there must be some reasonable likelihood that the safety of
human life or the protection of property would be compromised, in some
degree, by delay in the performance of the function in question.
While we continue to believe that the 1981 articulation is a fair reading of the
Antideficiency Act even after the 1990 amendment, see Letter from Walter Bellinger to
Robert G. Damus, October 19, 1993, we are aware of the possibility the second of these two
rules might be read more expansively than was intended, and thus might be applied to
functions that are not emergencies within the meaning of the statute. To forestall possible
misinterpretations, the second criteria's use of the phrase "in some degree" should be
replaced with the phrase, "in some significant degree."
The reasons for this change rest on our understanding of the function of the 1990
amendment, which comes from considering the content of the amendment, its structure and
its sparse legislative history. That history consists of a solitary reference in the conference
report to the Omnibus Budget Reconciliation Act of 1990, Pub. L. No. 101-508, 104 Stat.
1388:
The conference report also makes conforming changes to title 31 of the United States
Code to make clear that . . . ongoing, regular operations of the Government cannot
be sustained in the absence of appropriations, except in limited circumstances. These
changes guard against what the conferees believe might be an overly broad
interpretation of an opinion of the Attorney General issued on January 16, 1981,
regarding the authority for the continuance of Government functions during the
temporary lapse of appropriations, and affirm that the constitutional power of the
purse resides with Congress.
H.R. Rep. No. 964, 101st Cong., 2d Sess. 1170 (1990). While hardly articulating the
intended scope of the exception, the conference report does tend to support what would
otherwise be the most natural reading of the amendment standing alone: because it is phrased
as identifying the functions that should be excluded from the scope of the term "emergency,"
it seems intended to limit the coverage of that term, narrowing the circumstances that might
otherwise be taken to constitute an emergency within the meaning of the statute.
Beyond this, however, we do not believe that the amendment adds any significant new
substantive meaning to the pre-existing portion of § 1342, simply because the most prominent
feature of the addition - its emphasis on there being a threat that is imminent, or "ready to
take place, near at h^nd," see Webster's Third New International Dictionary 1130 (1986) -
is an idea that is already present in the term "emergency" itself, which means "an unforeseen
combination of circumstances or the resulting state that calls for immediate action" to
383
respond to the occurrence or situation. Id. at 741.^ The addition of the concept of
"imminent" to the pre-existing concept of "emergency" is thus largely redundant. This
redundancy does, however, serve to emphasize and reinforce the requirement that there be a
threat to human life or property of such a nature that immediate action is a necessary
response to the situation. The structure of the amendment offers further support for this
approach. Congress did not alter the operative language of the statute; instead, Congress
chose to enact an interpretive provision that simply prohibits overly expansive interpretations
of the "emergency" exception.
Under the formulation of the 1981 Opinion, government functions satisfy § 1342 if,
inter alia, the safety of human life or the protection of property would be "compromised, in
some degree. " It is conceivable that some would interpret this phrase to be satisfied even if
the threat were de minimis, in the sense that the increased risk to life or property were
insignificant, so long as it were possible to say that safety of life or protection of property
bore a reasonable likelihood of being compromised at all. This would be too expansive an
application of the emergency provision. The brief delay of routine maintenance on
government vehicles ought not to constitute an "emergency," for example, and yet it is quite
possible to conclude that the failure to maintain vehicles properly may "compromise, to some
degree" the safety of the human life of the occupants or the protection of the vehicles, which
are government property. We believe that the revised articulation clarifies that the
emergencies exception applies only to cases of threat to human life or property where the
threat can be reasonably said to the near at hand and demanding of immediate response.
See also Random House Dictionary of the English Language Unabridged 636 (2d ed. 1987)
("emergency" means "a sudden, urgent, usually unexpected occurrence or occasion requiring immediate
action"); Webster's II New Riverside University Dictionary 427 (1988) ("an unexpected, serious occurrence
or situation urgently requiring prompt action").
384
TESTIMONY OF
WALTER DELLINGER
ASSISTA>rr ATTORNEY GENERAL
OFFICE OF LEGAL COUNSEL
BEFORE A JOE^ HEARING OF THE
SENATE BUDGET COMMITTEE
and the
HOUSE BUDGET COMMITTEE
September 19, 1995
Chainnan Domenici and Chairman Kasich, Members of the Committees:
I appreciate the invitation to appear today before the Budget Committees from both
Houses to discuss with you the executive branch's interpretation of the laws providing for
government operations in the event of a lapse in appropriations. The Department of Justice
welcomes this opportunity to have a full public discussion of the conclusions we have
reached so far. In addition to answering your questions, we would very much like to have
the benefit of your thinking, either this morning or after you have had an opportunity to
consider further the submissions we have made. Any thoughts you have about the proper
resolution of these often difficult legal questions will be most welcome by the Department-of
Justice and will be given careful attention as we continue the process of elaborating the
applicable legal standards.
In recent weeks, the Office of Legal Counsel has been concentrating on the legal
issues associated with a lapse of appropriations, and this is the focus of ray remarks today.
In the course of our analysis, we have reviewed and been guided by the 1981 opinion by
Attorney General Civiletti interpreting the Antideficiency Act, which has formed the basis for
contingency planning by the administrations of President Reagan and President Bush 'and by
this administration. On August 16, 1995, 1 issued an Office of Legal Counsel memorandum
reaffirming the conclusions of the 1981 Civiletti opinion and assessing the consequences of a
1990 amendment to the Antideficiency. Let me briefly sketch our inteipretation of the law.
INTRODUCTION
Our starting point in addressing these questions is the Constitution itself. One of the
Constitution's least heralded, but most fundamentally important, provisions is found in
Article I, § 9. It reads:
"No Money shall be drawn from the Treasury, but in Consequence of
Appropriations made by Law."
This provision expresses what is commonly known as Congress's "power of the
purse." It is no exaggeration to say that it is a principle for which patriots fought and died,
385
and it means what it says: without authorization by the vote of the people's representatives
in Congress, not one dime can be spent from the United States Treasury.
Therefore, one consequence of a lapse in appropriations is mandated by the
Constitution - no one can be paid any money from the Treasury when the necessary
appropriations bill has not been enacted. Should we reach October 1 without all
appropriations bills having been signed into law, and no continuing resolution in place,
employees cannot be paid, contract payments cannot be made, government rents cannot be
paid, in all cases where the necessary appropriations bill is lacking.
If the government operated exclusively on a daily pay-as-you-go basis, a lapse in
appropriations would necessarily mean that any and all activities of the government that
required disbursements from the Treasury would just come to a halt. The government is not
a daily pay-as-you-go operation, however. Consistent with Article I, § 9, it would be
possible for the government to make contracts with individuals and firms for goods and
services even when it currently lacked the funds to pay off those contracts. So long as
suppliers, contractors and employees were willing to contract with the federal government on
the basis of a promise to pay in the future, activities of government could continue on that
basis ~ but for the limitations embodied in the Antideficiency Act.
The Antideficiency Act provides that no federal official is permitted to contract or
obligate funds before an appropriations measure has been enacted. By preventing the federal
government from even obligating itself to pay for goods or services before Congress has
made an appropriation, the Antideficiency Act reinforces the constitutional principle that the
Congress must decide how much money to spend and how to spend it.
If the Antideficiency Act were an absolute bar on obligating funds in advance of
appropriations, then the results would be just as I have described ~ the entire portion of the
federal government that requires annual appropriations would come to a halt. Congress,
however, has not made the Antideficiency Act an absolute bar on obligating funds in advance
of appropriations. It has instead provided for certain exceptions. For the functions covered
by these exceptions the goveinment may continue to obligate funds even though
appropriations bills have not been enacted.
The exceptions to the Antideficiency Act do not necessarily reflect any considered
judgment by the Congress as^ to which activities are crucial or essential and which are not.
Instead, for reasons I will elaborate, there are a variety of different excq>tions that permit
some very discretionary and perhaps even insignificant functions of government to continue
operating, while other, critically important activities must be curtailed.
386
A. EXCEPTIONS TO THE ANTmEFICIENCY ACT
1. Multi-year, Permanent, and Indennite Appropriations
One initial explanation for a great deal of continuing functions of the federal
government is that the Antideficiency Act does not by its own tenns apply to a substantial
portion of those functions at all. The Act only prohibits incurring obligations in advance of
appropriations, and a majority of current government expenditures "occur under multi-year,
permanent or indefinite appropriations that do not lapse on the expiration of the current fiscal
year. Some examples include social security payments, medicare payments and interest
payments on the national debt.
Some salaries are paid out of permanent appropriations, too. Sometimes this occurs
because salaries are paid out of a fiind that collects fees from users. An example would be
the lawyers in the Justice Department's antitrust division whose salaries are allocated to the
account that collects merger pre-clearance fees under the Hart-Scott-Rodino law. Sometimes
it occurs because Congress has simply enacted an appropriations measure that continues for a
period of years or even indefinitely. An example would be the salaries of members of
Congress.
In all these cases, obligations may be made and money may be withdrawn from the
treasury to pay the recipients of these obligations. The Constitution is not violated because
the sums in question are drawn from the Treasury '^in Consequence of Appropriations ma3e
by Law." Congress has in fact enacted an appropriation, and the Antideficiency Act is not
implicated because the expenditures or obligations are not taking place or being incurred in
advance of an appropriation.
2. Employees Whose Continuing Work Does Not Incur Any Obligation
Some employees of the federal government operate under terms that obligate the
federal government to pay them so long as they occupy a certain post or position, whether or
not they are performing services. Examples include certain foreign nationals who are
employed by the State Department in various localities where local labor laws create such
terms. Certain high-ranking members of the executive branch who have been confirmed by
the Senate, such as cabinet secretaries, provide other examples. In addition, the Constitution
forbids the salary of the President or of Article EI judges to be reduced while they are in
office. The obligation to pay the salaries of these officeholders is created by the Constitution
without regard to \14hether they actually perform services.
In these cases, the authority to incur the obligation to pay such individuals is
contained in the Constitution or in- the legislation that creates or authorizes such arrangements
to be entered into in the first place. Furthermore, having such individuals actually perform
387
services during a lapse in appropriations does not incur any additional obligation — the
obligation already exists as a result of the original hiring, appointing, or electing of the
individual. As a result, the Antideficiency Act is not violated if those individuals continue to
work. Bear in mind always that the fact that monies are not appropriated to pay them
means, of course, that they do not actually receive pay until funds are appropriated.
3. The Emergency ExceptloD
The excq)tion that probably explains the greatest number of employees who will not
be furloughed during a lapse in appropriations is expressly stated in the statute. The
Antideficiency Act, in § 1342, authorizes federal officials to "employ personal services" in
"emergencies involving the safety of human life or the protection of property." In 1990 this
provision was amended to clarify its scope, so that the statute now expressly states that the
emergencies it refers to "doQ not include ongoing, regular functions of govenmient the
suspension of which would not imminently threaten the safety of human life or the protection
of property."
This articulation is consistent with the advice that the Dq)artment of Justice had been
giving since Attorney General Civiletti's 1981 opinion. The interpretations of the
Department of Justice and the settled practice of the executive branch indicate that a function
may be continued under the emergency exception if two conditions are met. First, there
must bear some reasonable and articulable connection between the function to be performed
and the safety of human life or the protection of property. Second, there must be some ~
reasonable likelihood that the safety of human. life or the protection of property would be
compromised, in some significant degree, by delay in the performance of the function in
question.
In applying the exception relating to property and life, it is necessary to make certain
assumptions. For example, the continued functioning of FAA air traffic controllers is
necessary only if the nation's airports remained open and air transportation were to continue.
In this area, as in others, we have looked to past practice as an interpretive guide. With
respect to any short lapse in ^)propriations, the consistent practice of past administrations has
been to assume the continued operation of the private economy. Consequently, air traffic
controllers, meat inspectors, and other similarly situated personnel have been considered to
be within the emergency excq>tion of § 1342. We have not determined whether this
assumption would continue to be justified if a lapse in appropriations extended beyond a
short period.
Because the,^tideficiency Act authorizes federal officials to "employ personal
services" to continije functions encompassed within the emergency exertion, obligations to
pay compensation may be given to those federal employees who perform emergency
functions during an appropriations lapse. It is important to note, however, that these
employees may not receive an actual payment of money from the Treasury unless and until
388
an appropriation is enacted. During an extended lapse in appropriations, the nation would be
depending upon ability and willingness of prison guards, border officials, law enforcement
agents, air traffic controllers and others to continue working even though they would not be
receiving pay checks.
4. Obligations Expressly Authorized by Law
In some cases. Congress has passed other legislation that authorizes the government to
enter into obligations in advance of appropriations. Attorney General Civiletti's opinion
concluded that such authorization cannot be derived from the sort of general authorizing
statute Congress necessarily enacts when creating a government program. Rather, to be
considered "expressly authorized," a statute must clearly authorize the incursion of
obligations regardless of a lapse in appropriations. An example of such authority is the
statute that permits the military to incur obligations on behalf of the United States in the
absence of appropriations "for clothing, subsistence, forage, fuel, quarters, transportation, or
medical and hospital supplies." 41 U.S.C. § 11(a).
5. Obligations Necessarily Implied by Law
Attorney General Civiletti's opinion also recognized instances where the speciflc
terms of a statute imposing duties upon or vesting authority in federal officers and employees
lead necessarily to an inference that such officers or employees are authorized to incur
obligations in advance of appropriations. It is on this basis, for example, that Attorney
General Civiletti concluded that agencies may incur obligations in order to conduct an
orderly termination of the unautliorized activities of the agency. The Attorney General
interpreted the Antideficiency Act to require nonexcepted functions to terminate. He then
reasoned that because it would in fact be impossible to terminate functions without incurring
any obligations at all and because a statute that imposes a duty impliedly confers the
authority to fulfill that duty, the Antideficiency Act itself requires, by necessary implication,
federal ofTicers to incur obligations associated with an orderly shutdown.
A second kind of necessarily implied authorization arises in situations where the
government has a duty to continue an activity, but the administrative personnel necessary to
carry forward that activity or function are funded through appropriations that have lapsed.
The Civiletti opinion concluded that in such a case. Congress haid impliedly authorized the
staffing necessary to maintain the activity. The example he used was of the personnel in the
Social Security Adyiinistration necessary to maintain the activity of disbursing social security
t)enerits to eligible individuals.
389
6. The President's Core Constitutional Duties
The Constitution itself vests certain duties and powers in each of the three branches.
As to the executive branch, the President's constitutional powers include the pardon power,
the commander in chief power, the foreign affairs powers, the power to make
recommendations to Congress, and the power to demand opinions in writing of the heads of
departments. Attorney General Civiletti did not take an unduly broad view of this power.
For example, he did not reason that, because the Constitution vests "the executive Power" in
the President and charges him to "take Care that the Laws be faithfully executed," the
President is "authorized by law" to carry out all statutorily vested executive power. Attorney
General Civiletti did, however, read the Antideficiency Act as leaving with the President the
authority to make 'those obligations necessarily incident to presidential initiatives undertaken
within his constitutional powers. " Obligations incurred in undertaking these functions are
"authorized by law"; va^, the Constitution.
For all three branches, but especially for the executive branch, the specific functions
that they are constitutionally entitled to undertake will depend on the facts and circumstances
surrounding the proposed activity. Whether a particular function is necessarily incident to
the exercise of the President's foreign affairs power, for example, will depend upon the
factual setting. Attorney General Civiletti recognized that where the President seeks to take
action that is grounded in his constitutional authority, his assertion of authority is buttressed
in those cases in which there are acts of Congress authorizing the activity asserted. He also
observed that valid assertions of the President's constitutional authority are typically marked
by both urgency and necessity.
B. NONEXCEPTED FUNCTIONS
It bears emphasizing that the Antideficiency Act mandates the termination of all
functions other than the excepted functions set out above. As I have indicated, the functions
that the Antideficiency Act allows to continue during an appropriations lapse are not r
determined by whether a particular activity is important or "essential" in some general sense.
As a result, a number of fiinaions that are, by any conception, important and essential must
nevertheless terminate during a lapse in appropriations. In contrast, other functions that, if
assessed in order of importance, would be unlikely to rank higher than many nonexcepted
functions would nevertheless continue.
C. THE DEBT CEILING
Finally, as Director Rivlin outlined, the situation in which neither an appropriations
bill nor a continuing resolution has been enacted is entirely different from the situation in
which the failure to raise the debt ceiling deprives the Treasury of authority to issue more
debt as defined in the statutory debt ceiling, 31 U.S.C. § 3101(b). Among those differences
390
is this: In the case of a lapse of appropriations, Art I, § 9 of the Constitution prevents the
Treasury from honoring any unauthorized claim for payment against the United States and
the Antideficiency Act prohibits affected agencies from entering into many contracts or
obligations to pay. By contrast, reaching the debt ceiling does not deprive the departments
of the government of the authority to employ workers and otherwise enter into obligations.
Nor does it deprive the Treasury of statutory authority to honor claims for payment. The
problem would be, rather, that the Treasury may on any given day lack the funds to honor
all the authorized claims that are submitted to it. In an extreme case, the government might
face a calamity unknown in its two-hundred year history, namely a default by the United
States on its debt obligations.
CONCLUSION
The Antideficiency Act protects that central constitutional provision committing the
power of the purse to Congress. It was drawn, however, with a specific context in mind.
Unfortunately for present purposes, that context is not a general appropriations lapse. In
1820, when the first version of the Antideficiency Act was enacted, and through its formative
revisions. Congress had in mind the practice, apparently common at the time, of executive
branch agencies obligating more funds than had been appropriated for authorized activities in
an attempt to force Congress after the fact to appropriate more funds than Congress had
wished or chosen to appropriate.
Although the Antideficiency Act was not written with a general lapse in
appropriations in mind, the act applies to that situation. Because its drafters did not consider
the contingency of a general appropriations lapse, it is often difficult to apply to the many
specific and often very complicated questions that attend a general appropriations lapse. For
that reason, we rely heavily on the precedents of administrative construction and practice in
issuing guidance on the application of the Antideficiency Act to a general appropriations
lapse. Since the scope and contours of the Antideficiency Act are very often difficult to
define, we are grateful for these hearings and welcome the opportunity to receive any
thoughts or suggestions that members of the Committees might have.
391
RESPONSE TO QUESTIONS OF THE SUBCOMMITTEE ON CIVIL SERVICE
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
U.S. HOUSE OF REPRESENTATIVES
DECEMBER 6. 1995
Please summarize for the sxibcommlttee the functions
performed by Justice Department employees who have continued
to work during the shutdown, and explain the Department's
rationale for continuing that work \inder the applicable
standards and guidelines?
The core mission of the U.S. Department of Justice is the
enforcement of the nation's laws and, consequently, the
protection of life and property throughout the country and
around the world. Additionally, about 10 percent of the
Department's employees are funded through reimbursements,
fee accounts, no-year funds, or carry-over funding which did
not expire with the lapse in appropriations. In all,
approximately 75 percent of the Department's employees were
exempt from the recent furlough.
By appropriation, the workers who continued their functions
were engaged in the following kinds of activities:
General Administration (GA) . In addition to providing
executive direction to the Department, employees provided
mission-critical law enforcement applications for various
components nationwide on a 24 hours-a-day, 7 days-a-week
basis at the Justice Data Center, provided services relating
to communications for senior managers and law enforcement
personnel, and also relevant financial management services
required for employees deemed "exempt" during the furlough
period.
The Executive Office for Immigration Review (EOIR) exempted
a number of its Immigration Judges so that hearings for
incarcerated aliens could continue.
Office of the Inspector General (OIG) . Employees continued
criminal investigations and provided support services for
exempt employees .
U.S. Parole Commission (USPC) . Employees answered calls,
responded to requests for emergency warrants and processed
parole certificates.
General Legal Activities. Employees ensured that criminal
litigation continued uninterrupted; sought continuances for
all civil and appellate litigation; proceeded with civil and
appellate litigation if attempts to secure continuances
failed; provided legal advice to the White House and the
National Security Counsel on national security matters; were
392
available to provide administrative advice and resource
allocation guidance to Civil Rights Prosecution personnel
and the Assistant Attorney General, Civil Rights Division,
in the event of civil disorder; were available to respond to
and investigate complaints of alleged criminal civil rights
violations involving endangerment of life or property and to
handle voting rights issues and complaints from
institutionalized persons concerning life threatening
situations. Also, employees provided uninterrupted
communication among Federal, State, local, and international
law enforcement entities.
U.S. Attorneys. These employees addressed criminal matters
and civil matters of urgency, and to provided support to
exempt employees .
U.S. Marshals Service. Employees carried out duties
associated with judicial security, prisoner security and
prisoner transportation. A limited number of employees
provided overall direction and support to essential
activities.
Commvmity Relations Service (CRS) . Employees provided
resettlement, education, and conflict resolution services to
over 14,000 Cubans at Guantanamo.
United States Trustees Program. These employees protected
the United States Government from liability in bankruptcy
matters and coordinated criminal matters with the U.S.
Attorneys and the Federal Bureau of Investigation.
Federal Bureau of Investigation. All operations of the FBI
are directed toward national security and the investigation
of violations of law involving protection of life and
property. Accordingly, all FBI agents and 70 percent of
support personnel in the field were exempt. At FBI
headquarters, all agents and approximately 85 percent of the
support personnel are considered excepted. These staff
members provided direction and investigative support to
field operations. This includes the entire Criminal Justice
Information Services Division which provides fingerprint
identification services to criminal and national security
investigations .
Drug Enforcement Administration. Employees provided
oversight and direction to or carried out narcotics
investigations around the world.
Immigration and Naturalization Service (INS) . These
employees provided overall direction to the agency;
controlled the U.S. border and protected property; continued
working on active criminal cases; detained in-cvfstody
393
aliens; and conducted inspections of applicants for
admission to the United States.
Bureau of Prisons (BOP) . Staff at Federal correctional
institutions maintained the custody of Federal inmates. At
several institutions under construction, a small number of
staff protected property and ensured security against
compromise. Employees also continued inmate custody
responsibilities over some 10,000 inmates in contract
facilities.
No previous shutdown lasted more than 3 days. Did the
Department of Justice make any assun^tions with respect to
the length of the shutdown? If so, what time frame was
assvimed, eind how did it affect the Department's decisions
with respect to the functions amd positions that were
continued after the lapse of appropriations?
The contingency plan which the Department submitted to the
Office of Management and Budget was based on a 2 -week lapse
in appropriations. The plan and internal Department
guidance recognized, however, that operational necessities
could well -- and did -- dictate changes. For example, the
initial plan did not provide a sufficient number of
employees in United States Trustees' Offices to adequately
represent the interests of the United States in the
Bankruptcy Courts; as a result, additional employees were
called back to duty. Similarly, the initial plan did not
provide for a significant number of Immigration Courts to
remain open, given the detention requirements of the
Immigration and Naturalization Service.
Thus, the Department of Justice implemented its contingency
plan with the assumption that flexibility would be required
in its administration.
How would your determination with respect to what fxinctions
or positions to continue cheuige if the shutdown were to
last:
a. 10 days
b. 30 days
c. 90 days
As noted above, the Department exercised flexibility in
administering its contingency plan over the 6 days of the
November 1995 lapse in appropriations. Similar flexibility
would be required in the event of a longer lapse. As
operational needs dictated, some employees who were
initially furloughed would have been returned to duty (and,
- 3 -
394
perhaps, subsequently furloughed again) ; others who had
remained on duty would have been furloughed.
The core principle would remain unchanged. The Department
would retain on duty only those employees 1) who are paid
from funds which have not lapsed or 2) whose work relates to
emergencies involving the safety of human life or the
protection of property.
Please provide a description of your agency's £\inctions and
activities that were continued during this interruption o£
routine operations . Please indicate any special funding
mecheuiisms (e.g., carry forward, trust funds, fee accounts,
reimburscible agreements) used to support these continuing
activities.
Our response to 4th question above addresses the first part
of this question.
The attached chart provides the special funding mechanisms
available to the Department to continue certain operations
during a furlough. The chart includes carryover funds for
those accounts that had multi-year authority and for the fee
accounts (largely for immigration activities) , which do not
require congressional action. The Federal Prison Industries
and Commissary Fund are the Department ' s two trust funds
that receive their funding from non-appropriated sources.
The Troops to Cops funding from the Department of Defense is
the major reimbursable agreement that provided resources
during the funding hiatus.
Please estimate the total costs to your agency associated
with the interruption of operations between November 14 and
November 20, 1995. Please provide descriptions of any
unusual costs imposed on the agency or other unanticipated
consequences of this interruption of operations. Please
provide, too, an estimate of any savings associated with
this interruption of activities.
The attached table provides the cost estimate associated
with the funding hiatus for Department of Justice
components. These costs are associated mainly with the
salaries and benefits of furloughed Department employees
(24.5 percent of total Department staffing). The personnel
cost estimate for the furlough period was derived by
multiplying the number of employees furloughed in each
organization by the average salary and benefit cost. That
total was prorated (as 3.5 furlough days of the 260 day
workyear) to arrive at the cost for each organization.
Other unusual costs are noted on the second table. No
savings have been identified.
- 4 -
395
Copies of relevant documents internal to the U.S. Department
of Justice are attached.
- 5
396
04-Oec-95
04:18 PM
FURLOUGH
DEPARTMENT OF JUSTICE
TOTAL PERSONNEL COSTS
DURING FURLOUGH PERK30
NUMBER OF
AVGSAL
TOTAL
EMPLOYEES
AVERAGE
a BENEFITS
COST
FURLOOGHED
SALARY
(1.31%)
P.5 DAYS)
APPROPRIATTON
mSCRETlQWAKY
FWCnOfW. COPE; 750
590
49,690
65.004
516 996
433
47 192
61.822
71.504
360.348
249
54 583
560
49,690
65.004
490.706
U.S. PAROLE COMMISSION
6S
46.471
60.877
53.267
OFFICE OF THE SOUCITOR GENERAI
29
60,318
79,017
30.847
TAX DMSON. _
434
55,631
72,877
425.768
CRMNAL OMSION __ __
509
62.796
82.263
563,658
CML tXVISION
724
64,470
84.456
823,118
ENVIR. « NAT RESOURCE OMSION
508
53.033
69.473
475,090
OFFICE OF LEGAL COUNSEL
21
49.831
65.279
18,454
CIVIL RIGHTS OMSION
394
57,975
75.947
402.813
INTERPOL _ -...
49
43,625
57.149
37,696
386
52,204
68.387
355,351
5,128
80,050
104.866
7,238,946
337
44,558
58,371
264,802
COMMUNITY RRATIONSSFRVICF
107
63,299
82,922
119,439
904
40,632
53,228
647.743
ORGANIZED CRIME DRUG ENFORCEMENT
9
48,545
63,594
7.706
cpriFRAt pf IRFA" "F iN\/P?Tirt»Tin*(
5,099
44.633
58.469
4.013.350
1,5S2
53.541
70.139
1.493.685
IMMIGRATION AND NATURALIZATION SERVICE
4,240
30.635
40.132
2.290.603
FEDERAL PRISON SYSTEM:
SALARIES AND EXPENSES
1,385
33.224
43.523
811.461
NATL INSTTTUTE OF CORRECTK3NS
BUILDINGS AND FACaJTIES
FEDERAL PRISON INOUSTRES
CO»*flSSARY FUND _
rmmu pristim xv.«mi
1,385
33,224
43.523
811.461
376
59,421
77.842
393,998
SinTOTAL, OOMFSTK DISCRETIONARY
24.118
22,075.520
FUNCTIONAL CODE! ISO
FORBGN CLAIMS SETTLEMENT COMMISSION
4
57.095
74.794
4,027
SUBT, DISCRETIONARY AUTK _
24.122
22,079.547
M4MDAT0RY
FEES AND EXPENSES OF WITNESSES
...
...
SUBT. MANDATORY AUTHORnY. „
...
us TniKTPFS
mvFRVinN rnuTRnt pFF
iMuinRiTirwi ii<:pb rpF
FNFORCFMFNT FINFS
IMMIGRATION 1 FOAI I7ATION
IMMIGRATION EXAMINATIONS FEE.
LAND BORDER INSPECTION FEE.
...
BREACHED BOND DET. FUND
...
SUBT, FEE-FUNDED ACCOUNTS
TOTAL, DEPARTMENT OF JUSTICE
24.122
22.079.547
397
DEPARTMENT OF JUSTICE
UNUSUAL COSTS AS A CONSEQUENCE OF THE FURLOUGH
FEDERAL BUREAU
OF INVESTIGATION
S1S,750 Costs assodatad wHh sanding people home from training.
$221 ,974 Overtime costs associated with personnel having to catch up on woric for days lost
Total
Not available A contract to refurt>ish the firearms range at Quanlico was sent out for bids. The three
■ttNslime top bidders backed out dwing the furiough, so the FBI wfl have to use the fourth
bidder which wl possibly cost mSons more in the futu-e. The bid amount coUd not
be furnished because they are procurement sensitive.
J237.724
UNITED STATES
MARSHALS SERVICE
$23,000 Headquarters employees at the training academy in Georgia were recaled home,
leaving 20 district personnel without Instructors for a Fnandal Management
Information System (FMIS) training dass. This is the cost to cancel the dass.
Unknown Couthouse design meetings in San Juan. Pittsburgh, Brooklyn, Greensboro, and
Riverside were canceled and must be rescheduled. The delay adversely impacts
ttw courthouse renovation and constivKtion schedules in these cities.
Unknown The security assessment and project spedficatlan meeting for ttie high threat Mai
in Lawton, OK for the Oklahoma City bombing trial was canceled and must be
rescheduled.
$5,000 Headquarteis spent $5,000 to recal a merit promotion work group on travel. The
implementation schedule for the merit promotion plan has been set back several
weeks.
$1 ,750 Prisoner Operations Division spent $1 ,750 to recaO three Headquarters employees on
travel. The canceled trips included an environmerrtal impact statement at BOP's
metropoital detention center in Hawai, a meeting to negotiate prisoner beds in
San Diego, and an annual advisory board meeting sponsored by tt<e National
Institute of Corrections.
Not available Inmate designatiorts to BOP facSties have been backed up about one week. The
at this time average cost per day, per inmate, to remain in a kxal jail for this extended period
is $55.50. (The expedient nature of tt«s drU precluded the data gathering for exact
number of inmates involved).
Total
$29,750
IMMIGRATION AND
NATURALIZATION SERVICE
$4,300 Several attorneys were required to return from detais.
Unknown Work that would have been done during the period of the furlough was delayed and
added to backlogs. In most cases, overtime could be used to address the work
affected, such as: personnel processing, routine accounting, and vouchor processing.
Total
$4,300
398
U.S. Department of Justice
Washinpon, D.C. 20S30
August 21, 1995
MEMORANDUM FOR HEADS OF DEPARTMENT COMPONENTS
FROM: STEPHEN R. COLGATE
Assistant Attorney General
for Administration
SUBJECT: Contingency Planning for a Lapse in Appropriations
The purpose of this memorandum is to share with you guidance the
Attorney General has provided with respect to the contingency
plans you are preparing in the event it is necessary to furlough
non-essential employees as a result of a lapse in appropriations.
Your staff are preparing plans to be submitted no later than this
Friday, August 25, 1995.
Generally, the Attorney General wants component heads to be
conservative in designating employees as "essential," especially
those in headquarters or other "overhead" functions and
occupations. In drafting your plans, you should recognize that,
in the event of a prolonged furlough, it will be possible to
bring some employees back to work if the need for their services
becomes essential -- and to furlough others — as conditions
change.
Specifically with respect to litigation, the Attorney General has
given the following guidance, based on an assumption that the
Judicial Branch will continue to operate through the furlough:
• Criminal litigation will continue without interruption
as an activity essential to the safety of human life
and the protection of property.
• Civil litigation will be curtailed or postponed, to the
extent that the Courts will permit such an approach
without harm to the interests of the United States. In
the event that such an approach is not possible, civil
litigation will continue without interruption as an
activiity essential to the protection of property.
Your staff may address any questions concerning this approach to
their counterparts on the Budget Staff.
399
U.S. Department of Justice
ifaihmpon, D.C. 20S30
August 23, 1995
MEMORANDUM FOR HEADS OF DEPARTMENT COMPONENTS /^ U'Ulv'
FROM: STEPHEN R. COLGATE / \ (y{/'^ \j
Assistant Attorney General y~j\y \
for Administration /
SUBJECT: Contingency Planning for a Lapse in Appropriations
The purpose of this memorandum is to share with you additional
guidance the Attorney General has provided with respect to
contingency planning for a lapse in appropriations.
Several questions have arisen with respect to training activities
which might otherwise be carried out in early October. In making
your plans, you should follow these principles:
• Basic training of new employees in occupations which
are generally designated as essential will continue.
For example, new agent training for the Federal Bureau
of Investigation and the Drug Enforcement
Administration at Quantico and basic training of U.S.
Marshals Service, Bureau of Prisons, and Immigration
and Naturalization Service employees at the Federal Law
Enforcement Training Center will not be interrupted.
• In-service training of current employees, even those in
essential occupations, will be cancelled.
• Training of State and local officers (for example, in
the National Academy Program) will be discontinued for
the duration of the lapse in appropriations.
As indicated in my earlier correspondence on this subject, the
Attorney General wants component heads to be conservative in
undertaking any activities which could be viewed as "ongoing,
regular functions of government, the suspension of which would
not imminently threaten the safety of human life or the
protection of property." 31 U.S.C. § 1342.
Please contact me if you have any questions about this guidance.
400
U. S. Department of Justice
Wathintum. D.C 20530
SEP 14 1995
MEMORANDUM FOR HEADS OF DEPARTMENT COMPONENTS
FROM: STEPHEN R. COLGATE
Assistant Attorney General
for Administration
SUBJECT : Furlough Update and Informational Materials
Events of the last several days seen to have lessened the
prospect of furloughs of federal employees, including many in the
Department, on or about October 1, 1995. Nonetheless, we believe
it is prudent to proceed with preliminary notifications to
employees in the event that furloughs are necessary.
In the event of a shutdown, you will be recjuired to issue
official furlough decision notices to nonexcepted employees.
Only those employees who, as identified in your recently approved
contingency plan, perform "emergency" functions (i.e., whose
duties involve the safety of human life or the protection of
property) or whose salaries are paid from other than Fiscal Year
1996 appropriations will be permitted to work.
Certain materials are attached for your information and use. We
will issue updates and additions to this information as
conditions change — which we fully expect will be the case. You
should take several steps to alert employees to the events which
may occur:
• The Attorney General has signed a memorandum to all
employees (copy attached) about the prospect of a
furlough; you should ensure that it is distributed to
all employees of your component.
• Consistent with any labor relations obligations you may
have, you should provide your own notice to employees
with more specific information about their benefits and
entitlements and the meaning of the furlough. A draft
memorandum which you may use for this purpose is
attached, along with supplemental benefits information
to provide to employees. We will update this informa-
tion as it is revised and provide you with an amended
paper to be attached to the furlough decision notice.
401
Heads of Department Components 2
• Again, consistent with labor relations obligations, you
should notify employees, by appropriate means, whether
they are expected to report to duty in the event of a
furlough (i.e., they are "excepted") or whether they
will not be expected to report.
If furloughs do take place, the Department will activate a
Furlough Information Hotline to provide employees current
information. The hotline numbers will be (202) 514-1087 for
Washington, D.C. Metropolitan Area callers and 1-800-521-6079 for
long distance callers.
you should also begin your internal planning for the issuance of
furlough notices to nonexcepted employees. To assist in that
process, we have attached the following information:
• A delegation from the Deputy Attorney General giving
you the authority to issue furlough decision notices to
attorneys, members of the Senior Executive Service, and
incumbents of senior-level (SL) and scientific or
professional (ST) positions.
• A draft furlough decision notice for issuance to
employees. You must also ensure that furlough decision
notices are to be issued to employees on detail. These
employees are subject to furlough in the same manner as
employees who are not on detail.
• Merit Systems Protection Board (MSPB) form and MSPB
regulations, which include the addresses of MSPB
regional offices, where employees may file appeals.
The appeal form may be given to employees with the
furlough decision letter or when they return to work.
Employees will also be able to obtain a copy of the
appeal form from the Furlough Information Hotline.
• A Department Security Officer memorandum concerning the
securing of sensitive and classified information during
furlough.
• A time line of the Department's activities through
October 2, 1995.
The draft materials will be provided electronically to components
on the EAGLE and AMICUS networks. Three and 1/2" diskettes
containing copies of the materials in WordPerfect 5.1 format will
be provided for components which are not connected to the EAGLE/
AMICUS network. Please have your staff contact Robert F. Seymour
of the Justice Management Division Personnel Staff's Policy Group
by September 15 to identify the contact person who should receive
the diskette or the e-mail and to indicate your requirements for
402
Heads of Department Components 3
diskette size and WordPerfect format if they differ from those
described above.
To ensure employees are paid for pay period 19 (September 17-30,
1995), the last pay period in Fiscal Year 1995, the National
Finance Center (NFC) will begin accepting Time and Atten-
dance Reports (TiAs) for pay period 19 as early as Monday,
September 25, 1995. The NFC will continue to accept and process
TiAs through Saturday, October 7, 1995. However, since its own
employees could be furloughed, NFC wants to receive TiA reports
no later than close of business on Tuesday, October 3, 1995.
The Department of Labor is considering the establishment of a
"special" unemployment compensation claims process to make it
possible for Federal employees to file claims without having to
visit State agency local offices, and for Federal agencies not to
have to process wage and separation information on Form ES-931.
Labor will issue information on and instructions for this
"special" claims process by September 15, 1995.
The Department of Justice Federal Credit Union is offering
generous loan terms to members, as described in the attached
information.
We will continue to apprise you of developments concerning the
shutdown of government operations, and provide updated guidance
as it becomes available. Questions concerning this matter may be
referred to Vivian Jarcho, Assistant Director for Policy, on
(202) 514-6397.
Attachments
403
O^fto nf tl|p Attnntpy Olenpral
9a9i{tngton,9. (0. 20530
Septenfcer 12, 1995
MEMORANDOM FOR ALI' DEPARTMENT OF JUSTICE EMPLOYEES
FROM: THE ATTORN,
SUBJECT: Notice o£/ Possible Furlough Due to a
Lapse in Appropriations
I am sure that most of you have heard news and other reports
about the prospect of furloughs if the Department of Justice
appropriations bill for fiscal year 1996 or a continuing
resolution is not passed by the Congress and signed by the
President by October 1, 1995. The last few days have brought
indications that such furloughs may be avoided. That is welcome
news. However, I want to be sure that you have as much
information as possible so that you can take the personal steps
which would be necessary in the event furloughs occur.
During a "lapse in appropriations," agencies may not
obligate funds except to maintain the minimum level of emergency
activity and to effect an orderly shutdown of Government
operations. Accordingly, furloughs would be required for all
Department employees except for those who are performing excepted
activities or shutdown activities, as defined by the Office of
Management and Budget.
In a furlough, workers are placed temporarily in a nonwork
and nonpay status. If fiscal year 1996 funds are not appropri-
ated for the Department by October 1, 1995 and if you are not
identified as an "emergency" (or "exempt") worker, you will be
provided specific information as to the starting date and
projected duration of the furlough and of any appeal rights you
may have. Even those employees who are designated to report for
duty may not receive paychecks during the appropriations lapse.
You and your' colleagues across the country provide services
vital to the well-being of our Nation and I fervently hope that
we will avoid having to furlough any employees. However, in
consideration of your own and your family's well-being, I must
encourage you to consider and plan for the financial hardship
that a furlough would bring.
I will make every effort to ensure that you are kept
informed of developments in this situation.
404
U. S. Department of Justice
Washinfiofi.D.C. 20SJ0
MEMORANDtnt FOR ALL (COMPONENT'S NAME) EMPLOYEES
FROM: Head of Component
SUBJECT: POSSIBLE FORLODGH DDE TO A LAPSE IN APPROPRIATIONS
As we approach the beginning of fiscal year (FY) 1996, there have
been indications that budgetary and policy differences between
the Administration and the Congress may delay the passage of FY
96 appropriations. In years past, we have faced a lapse in
appropriations and even gone through agency shutdown procedures.
Such shutdowns have never exceeded a day or two, and the
appropriations bill which finally passed allowed us to restore
employee pay retroactively.
In the last few days, there have been positive signs that ws will
avoid a lapse in appropriations this year. However, prudence
dictates that the Department — and you as individuals — make
certain plans in the event that furloughs do occur. If furloughs
occur and you are affected, you will begin to feel the impact on
your personal finances on the pay day that falls on October 26,
1995.
We will make it a priority to keep you apprised of significant
developments. However, quickly communicating any actual shutdown
and return-to-work situations may be difficult since they may
occur while you are not in a duty status. At such times, it will
be your responsibility to stay informed of the situation through
public news media and to return to work when funding has been
restored.
In the event of a shutdown, official furlough decision notices
will be issued to non-excepted employees. Only employees who
perform "excepted" functions (i.e., whose duties involve the
safety of human life or the protection of property) or whose
salaries are paid from other than FY 96 appropriations will be
permitted to work. You will be informed by your supervisor if
your position falls in either of these categories.
The Department has established a Furlough Information Hotline to
provide employees with furlough information. If furloughs become
405
All Employees of f Component Namel
a reality, the hotline will be activated on October 1, 1995. The
numbers will be (202) 514-1087 for metropolitan area callers and
1-800-521-6079 for long distance callers.
Attached are several pages of information which should answer
many of the questions you may have on how furlough would affect
your benefits, pay, leave, and other important matters. We will
update this material as more information becomes available.
Questions concerning this matter may be referred to the (indicate
Executive Office. Administrative Office. Human Resources Office,
or other office as appropriate) .
Attachment
406
BTFECTS or rUIlLOUGH ON EMPLOYEE BENETITS
AMD OTHER IMFORTAKT MATTERS
EMPLOYEE BEMEFITS
Health Banaflts - Enrollments In tha Federal Employees' Health Benefits
Program (FEHB) will continue for no more than 365 days in a nonpay status.
The government's contribution will continue while employees are in a nonpay
status. Employees premiums will accumulate during the furlough and
contributions will be withheld from their pay upon return to duty.
Cancelling PEBB Coverage While on Furlough - Employees are cautioned not to
cancel FEHB coverage to avoid payment of premiums while in a nonpay status or
reduced-pay status. If cancelled, employees must wait for a FEHB open season
to re-enroll. Further, cancellation of FEHB coverage may affect an employee's
right to carry such coverage into retirement or while in receipt of workers*
compensat ion .
Life Insurance - Enrollments in the Federal Employees' Group Life Insurance
Program will continue for 12 consecutive months in a nonpay status without
cost to the employee or the agency.
Retirement - Retirement coverage continues at no cost to employees while in a
nonpay status. When employees are in a nonpay status for only a portion of a
pay period, their contributions are adjusted In proportion to their basic pay.
The exception would be an employee who had substantial time in a nonpay status
earlier in the year if the furlough causes him or her to have mors than six
months time in a nonpay status during the calendar year.
Thrift Savings Plan - When an employee is in a nonpay status for an entire pay
period. Thrift Savings Plan (TSP) employee and agency contributions a^e not
made for that pay period. This is true even if the employee is receiving
benefits from the Office of Workers' Compensation Programs. TSP
contributions, including the agency automatic (1%) contributions made to the
accounts of employees covered by the Federal Employees' Retirement System are
based upon the basic pay the employee earned for the pay period. Because the
employee's basic pay is zero, TSP contributions are zero. Employees cannot
make up the missed TSP contributions when he or she returns to pay status.
If an employee receives some basic pay for working a portion of a pay period,
the agency automatic (1%) contribution for the pay period is determined using
the basic pay the employee earned for the pay period. The employee's
contribution, based on a percentage of pay, is also determined by using the
basic pay earned for the pay period. For contributions based on a whole
dollar amount, the employee contribution is reduced to 10 percent of the
employee's basic pay (if FERS) or 5 percent (if CSRS) if the elected amount
exceeds the 10 or 5 percent limit. If the elected whole dollar amount exceeds
the employee's net pay for the pay period, no employee contribution is made
for the pay period.
Thrift Savings Plan Loans - Because under the TSP loan program, loan payments
may only be made through payroll allotments, employees in nonpay status are
not eligible to receive TSP loans until they return to pay status. If an
employee who has a TSP loan misses payments for less than 90 days, the loan
payment schedule will be extended. However, the loan must be repaid in full
by the fifth anniversary of the loan issuance date for education, medical, or
financial hardship loans and by the eighteenth anniversary of the loan
issuance date for residential loans.
If an employee misses payment for 90 or more days and (a) the employee is in
an approved nonpay status, e.g., furlough; and (b) the TSP has been so
informed; and (c) the employee returns to pay status so that loan payments
407
resune within one year, the employee must reamortize the loan when he or she
returns to pay status. If the employee fails to reamortize the loan, the loan
must be prepaid in full. If the loan is not reamortized or prepaid in full, a
taxable distribution will be declared.
In situations similar to that described above, except the TSP is not informed
of the nonpay status and the employee does not return to pay status, the
employee must prepay the loan in full at the end of the first ye<u: of the
nonpay status or be subject to a taxable distribution of the unpaid loan
principal and any accrued interest. The Department has notified TSP of those
employees who have loans and are furloughed effective October 1, 1995.
PAY IS8PEB
Pay Check for Pay Period ending September 30, 1995 - Time and attendance (TGA)
reports for Pay Period 19 (September 17-30, 1995) will processed by
the National Finance Center (NFC). NFC will begin accepting T&A's for pay
period 19 as early as Monday, September 25, 1995, and will continue to accept
and process T&A's through Saturday, October 7, 1995. Employees will receive
their pay checks by the October 12, 1995 pay day.
Holiday Pay During a Furlough - Employees are entitled to be paid for a
holiday, if they eure furloughed on the last workday before a holiday o£ the
first workday after a holiday. This is based on the presumption that, but for
the holiday, the employee would have worked. However, employees are not
entitled to be paid for a holiday if a furlough includes both the last workday
before the holiday and the first workday after the holiday. In this
situation, there is no longer a presumption that, but for the holiday, the
employee would have worked on that day.
Contlnttatlon of Pay - Employees who are receiving continuation of pay (COP)
due to job-related injuries are maintained on COP status during periods of
furlough.
Senior Executive Service Performance Awards - The payment of performance
awards to Senior Executive Service employees may be delayed until after the
furlough when funds are available.
Payment for Court Services - Employees who serve as witnesses or jurors on
furlough days will retain all monies received from the court.
Workers' Compensation - Workers' compensation benefits will continue through
the furlough period.
Deductions from Pay - When an employee's gross pay is insufficient to permit
all deductions to be made, deductions are made in accordance with the order
of withholding precedence established by the General Accounting Office. The
order of precedence is as follows: (1) civil service retirement and Medicare,
FERS (basic and Old Age Survivors and Disability Insurance (OASDI), or OASDI
for those employees not covered by a Federal retirement system; (2) Federal
income taxes; (3) health insurance premiums; (4) basic life Insurance;
(5) State income taxes; (6) city income or employment taxes; (7) indebtedness
to the United States; (8) garnishment for alimony and child support payments;
(9) court ordered bankruptcy payments under Chapter 13 of Title 11, United
States Code; (10) optional life Insurance — additional first, standard
second, and family third; (11) other voluntary repayments of indebtedness to
the United States in the order specified by the employee; and (12) all other
voluntary deductions, starting with the Thrift Savings Plan or repayment of
loans from that plan for any employee (FERS or not) contributing to the thrift
plan, and then allotments and assignments, which shall be made in the order
determined by the paying agency.
Wlthln-Orade Step Increases - Wlthin-grade step increases sure awarded on the
basis of length of service and individual performance. Such increases may not
be denied or delayed solely because of lack of funds. However, extended
periods of nonpay status due to furlough for lack of funds, may affect the
timing of such increases. The amount of workweeks in a nonpay status that is
408
creditable towarde completion of the required waiting period for within-grade
■tep increases is as follows: two workweeks for advancement to steps 2, 3, and
4 of the General Schedule; four workweeks for advancement to steps 5, 6, and
7; and six workweeks for advancement to steps 8, 9, and 10. For prevailing
rate employees (WG, WL, and WS schedules), an aggregate of one workweek in a
nonpay status is creditable service for advancement to step 2; three weeks for
advancement to step 3; and four weeks for advancement to steps 4 and 5. Thus,
if a General Schedule employee in steps 1, 2, or 3 of the grade is furloughed
for more than two workweeks during the waiting period, his or her within-grade
Increase would be delayed by at least a full pay period.
Oaeaploymen't Coapensation - Federal employees are covered for unemployment
insurance (01) purposes under the Onemployment Compensation for Federal
Employees (OCFE) program. The UCFE program is administered by the individual
States, and UCFE benefits are generally determined and paid under the 01 law
of the State which the Federal employee worked.
State 01 laws provide for the payment of partial weekly amounts when
individuals are employed less than full-time during a week. State 01 laws
vary as to the number of hours and/or days the individual must be in non-
employment status during a week in order to be eligible for a partial weekly
payment, but in most cases, an individual in furlough status for 1 or 2 days
during a week would not be eligible for a partial OCFE payment for that week.
Individuals at grade levels of grade 9, step S, and higher would need to be on
furlough status for at least 4 days per week in order to be eligible to
receive a partial OCFE payment for the week. In addition, most State 01 laws
provide that the first week of 01 and (OCFE) eligibility is a non-paid
"waiting week" and therefore, OCFE payments vrould not actually begin until the
second week of eligibility in States with a 'waiting week."
Individuals normally file OCFE claiiss at the State agency local office nearest
to where they live or work. The address and telephone number of these local
offices are listed under the State government sector in the local telephone
directory. However, given the present furlough situation and the massive
number of Federal employees who will be affected, the O.S. Department of Lalsor
(DOL) will be implementing a "special" OCFE claims process for this shutdown
only. DOL will issue guidance on this process by September 15, 1995.
LEAVE ISBDBS
Leave Requests During Furlough - The necessity to furlough employees due to
lack of work or funds supersedes leave rights. Thus, all annual, sick, court
leave, or leave for bone marrow or organ donation is cancelled during the
furlough period. However, military leave must be charged on a nonwor)cday when
the nonworkday occurs wholly within the period of military leave for military
duty.
Leave Without Pay During Furlough - Employees who are on approved leave
without pay (LWOP) during the furlough period may be continued in a LHOP
status if there is no expectation that the employees may return to duty on the
proposed furlough days. The LHOP may be terminated and employees placed in a
furlough status. However, such action is unnecessary since there is no work
or funds involved.
Use or Lose Annual Leave - Employees who have properly scheduled "use or lose"
annual leave and are unable to use some or all of the scheduled leave because
of a furlough should make every effort to reschedule the "use or lose" annual
leave for use before the end of the current leave year. However, if this is
not possible, authority may be granted to restore the leave after the
beginning of the new leave due to an exigency of public business, i.e., the
need to furlough employees because of lack of work or funds.
Family and Medical Leave - Furlough days cannot be counted towards the 12-week
entitlement to leave under the Family and Medical Leave Act (FMLA). Employees
cannot take leave under the FMLA on days that coincide with the dates of
furlough.
409
EMPLOYMEMT AWO INJURY WHILE ON FURLOUGH
Bmployaent during Furlough - The standards of conduct for executive brauich
employees state in the definition of an employee that status as an employee is
unaffected by pay or leave status. This means that Federal employees will
still be considered to be employees when on furlough and thus subject to all
of the rules on conduct.
The standards prohibit an employee from having outside employment that
conflicts with his or her official duties. Employees remain subject to this
requirement during furlough. Thus, an employee may not, now or during a
furlough, work for an entity he can affect in carrying out his official
responsibilities. Further, employees subject to any approval requirement for
engaging in outside employment will remain subject to that requirement during
furlough.
The only Department-wide requirement for seeking approval for outside
employment goes to the practice of law. If an employee would like to practice
law for compensation, now or during a furlough, he must obtain approval frotn
the Deputy Attorney General. To engage in unpaid practice of law, he needs
only to obtain approval from his component head. Employees of Bureaus may be
required to seek approval before engaging in other employment in addition to
the practice of law. Such employees should consult their Deputy Designated
Agency Ethics Official for specific requirements. Generally, employees of the
Offices, B02u:ds and Divisions have no other approval requirement. For
example, an OBO employee may, now and during a furlough, work for a fast food
restaurant or a supermarket, as long as there is no conflict with his
government duties, without obtaining approval. All employees remain subject
to other restrictions on outside activities including restrictions on partisan
political activities.
Volunteering to Perform Tour Job vniile on Furlough - Agencies are not
permitted to accept voluntary services of an individual unless authorized by
law. Thus, an employee may not volunteer to do his or her job on a nonpay
basis during a furlough period.
Work on a Furlough Day in Exchange for Time Off for Religious Observances -
Employees may not work on a furlough day in exchange for taking a day off at
another time for religious observances. The statute that permits employees to
take compensatory time off for religious observances does not authorize an
agency to accept the voluntary services of any individual on a furlough day.
Periods of time worked in exchange for taking time off for religious
observances must be scheduled on non-furlough days.
Injury While on Furlough - Employees are not eligible for workers'
compensation while on furlough. Workers' compensation is paid to employees
only if they are injured while performing their duties. Employees on furlough
are not in a duty status for this purpose.
SERVICE CREDIT
Tlae-ln-Orade - Time, in a nonpay status is creditable service for meeting
time-in-grade requirements.
Completion of Probation - An aggregate of 22 workdays in a nonpay status is
creditaCble service towards completing a probationary period.
Retirement - An aggregate nonpay status of six months in any calendar year is
creditable service. Thus, there is no effect on an employee's high-3 average
unless the furlough causes the employee to be in a nonpay status for more than
six months during the calendar year.
Career Tenure - The first 30 calendar days of each nonpay period is creditable
service towards meeting the service requirements for career tenure.
Severance Pay - Nonpay status time is fully creditable for the 12-month
continuous employment period required by 5 U.S.C. 5S95(b)(l) and 5 CFR
410
550. 70S. However, for purposes of determining service creditable towards the
computation of an employee's severance pay fund under 5 U.S.C. 5595(c)(1) and
5 cm 550.707-708, no more than six months of nonpay status time per calendar
year is creditable service.
Military Duty or Workers' Compensation - Nonpay status for employees who are
performing military duty or being paid workers ' compensation counts as a
continuation of Federal employment for all purposes upon the employee's return
to duty.
Annual and Sick Leave - When an employee accumulates 60 hours of nonpay
status, his or her annual and sick leave credits are reduced by an amount
equal to the amount of leave the employee earns during that pay period. For
purposes of computing annual leave accrual rates, creditable service is
limited to an aggregate of six months nonpay status in a calendar year.
gMPLOYEB SERVICES
Department of Justice Recreation Association - The Department of Justice
Recreation Association facility located in the Main Justice building will be
closed during the furlough period.
DOJ Cafeteria - The cafeteria in the Main Justice Building will be open
during the furlough period.
DOJ Federal Credit Union - The DOJ Federal Credit Union (DOJFCU), located in
the Main Justice Building, will be open during the furlough period. The
DOJFCU has informed the Department that they are developing a series of plans
to help ease the financial burden on employees being placed In a nonpay status
The plans include special loan programs to its members, the elimination of
certain fees and penalties on savings and loan progrtuns will eliminated; and
extended service hours to provide financial counseling. Additional
Information may be obtained directly from DOJFCU by calling (202) 842-3200
(local calls) or 1-800-842-3200 (long distance callers).
Health Units - To be determined.
Justice Occupational Health Organization - To be determined.
Travel Management Center - Beginning October 1, 1995, Omega World Travel (OHT)
will replace Carlson-Wagonllt Travel as the Department's nationwide Travel
Management Center. Omega's main reservation/ticketing location will be on the
first floor of the Bicentennial Building at 600 E Street, N.W. A small branch
office for tlclcet pick up will be located in the Main Justice Building, at the
same location used by Carlson. These two sites are for employees of the
Offices, Boards, and Divisions, and the Immigration and Naturalization
Service. A reservation center will be located at 320 First Street, N.W. for
employees of the Bureau of Prisons. A reservation center for employees of the
Drug Enforcement Administration and United States Marshals Service will be
located at 700 Army Navy Drive, Arlington, Virginia. Omega will be open
during the furlough period.
411
(i^fficc of tl|e Seputg Attorneg (General
IBaslitngtDu. D.C. 20330
September 11, 1995
MEMORAHDUM FOR HEADS OF DEPARTMENT COMPONEMTS
FROM: THE DEPUTY ATTORNEY GENER^L^Sx.^ .
SUBJECT: Delegation of Authority to Issue Furlough Decision
Notices to Attorneys, Members of the Senior
Executive Service, and Incumbents of Senior-Level
and Scientific or Professional Positions
To date, the Department of Justice's appropriations bill for
fiscal yeetr (FY) 1996 has not been passed by the Congress or
signed by the President. As a result, non-excepted Department
employees may be furloughed effective October 1, 1995, due to a
lapse in appropriations. If furloughs are required, heads of
Department of Justice components are hereby delegated authority
to issue furlough decision notices to attorneys, members of the
Senior Executive Service, and incumbents of senior-level (SL) and
scientific or professional (ST) positions. This delegation of
authority expires when the lapse in appropriations ceases.
412
U. S. Department of Justice
Wtahmpon,aC 20S30
KEMORAMDUM FOR NOH-EZCEPTEO EMPLOYEES
FROM: (Head of Component)
SUBJECT t FDRLOUGH DECISION NOTICE
This is to inform you that fcite the specific reason for
furlough, e.g.. the President has not signed the Department's
appropriations bill for fiscal year (TY) 1996. and that Congress
has not enacted a continuing resolution to cover the hiatus
between appropriations ) . Consequently, the Department of Justice
will be without funds on October 1, 1995.
Under the Antideficiency Act, no obligations may be incurred in
the absence of appropriations except for the protection of human
life or property, the orderly suspension of operations, or as
otherwise authorized by law. Because your services are no longer
needed for orderly suspension of operations and you are not
engaged in excepted or emergency activities, you are being placed
in a furlough status. The furlough status is effective
October 1, 1995, or upon completion of shutdown activities which
will occur no later than October 2, 1995. The furlough is not
expected to exceed 22 workdays. You should listen to public
broadcasts zmd when you hear that a continuing resolution or a FY
1996 appropriation for the Department of Justice has been
approved, you will be expected to report to work on your next
regular duty day.
This action is being taken because of a sudden emergency
requiring curtailment of the Department's activities; therefore,
no advance notification is possible. The customary 30-day
advance notice period and opportunity to answer are suspended
under the provisions of 5 CFR S 752.404 (d) (2) .
If employees are being retained in your competitive level, they
are required for orderly suspension of Department operations or
they are performing excepted activities or shutdown activities as
defined by the Office of Management and Budget.
During the furlough period, you will be in a nonpay, nonduty
status. Also during the furlough, you will not be permitted to
413
serve as an unpaid volunteer, but must remain away from your
workplace unless or until recalled. Since leave cannot be
granted on a nonworkday, all annual, sick, court leave, or leave
for bone marrow or organ donation is cancelled effective October
1, 1995, through the duration of the furlough period. However,
military leave must be charged on a nonworkday when the
nonworkday occurs wholly within the period of military leave for
military duty. ESnployees who serve as witnesses or jurors on
furlough days will retain all monies received from the court.
Employees who have completed a probationary or trial period or
one year of current continuous employment in the competitive
service under other than a temporary appointment may appeal this
action to the Merit Systems Protection Board (MSPB) . Employees
in the excepted service who have veterans preference may appeal
to the MSPB if they have completed one year of current continuous
service in the same or similar positions as the one they now
hold. Employees in the excepted service who do not have veterans
preference and who are not serving a probationary or trial period
under an initial appointment pending conversion to the
competitive service may appeal to the MSPB if they have completed
two years of current continuous service in the same or similar
positions in an Executive agency under other than a temporary
appointment limited to two years or less. Senior Executive
Service career appointees adversely affected may also appeal.
Employees have a right to representation in this matter and may
be represented by an attorney or other person of their choosing.
If you have the right of appeal to MSPB and wish to appeal this
action to the MSPB, you must file the appeal within 30 calendar
days after the effective date of your furlough. A copy of the
MSPB regulations and appeal form and the addresses of the MSPB
Regional Offices having jurisdiction over appeals will be
available in your servicing personnel office once the furlough
ceases. You may also obtain the material from the Department's
Furlough Information Hotline.
The Department has established a Hotline to provide employees
with furlough information. Callers from the metropolitan area
should dial (202) 514-1087. For long distance callers, the
number is 1-800-521-6079. Information which describes the
effects of a nonpay status (due to furlough) on employee benefits
and other matters is attached.
Bargaining unit employees may grieve this action in accordance
with the applicable negotiated agreement or may appeal to the
MSPB in accordance with the procedures outlined above, but not
both. To obtain information on filing a grievance under the
negotiated grievance procedure, contact your union
representative .
Attachment
An.ion Q7 - 14
414
MERIT SYSTEMS PROTECTION BOARD
APPEAL FORM AND
REGULATIONS
INTENTIONALLY OMITTED FROM FAX TRANSMISSION
415
Memorandum
Securing of All Sensitive and Classified
Information Ouring Any Furlough Pen'od
AUG 31 1995
Security Proflrsms Manaaers
Senior Managsment Staff
Justice MaragwnwTt OMsion
D^errv/Rubino
Oepartment Security Officer
In Bccordanea with 28 CFR. Pan 17, entitled 'National Security Information.* Department
of Justice Security Programs Managers must ensure that all National Security Information
in the possession of their respective organizations is appropriately stored/secured during
any furlough period. At a minimum, sensitive information, systems and media should be
stored in lockisd filing cabinets, locked desks, or locked rooms. Lastly, please property
secure all other valuable office equipment to avoid possible theft.
Sf you have any information or equipment which cannot be secured In an appropriate
manner or If there is any security releted situation requiring special attention, pleeae
contact me or the Special Security Center on 514-3738.
416
FURLOUGH CONTINQEKCY FLAKMING
COMMUKICATIONS PLAN
SEPTEMBER
WEEK OF SEPTEMBER 4
Issue memorandum from the Attorney General to all
employees regarding the possibility of a furlough due
to a lapse in appropriations for FY96.
Attend 0PM Interagency Advisory Group meeting to
receive updated information and guidance on preparing
for a furlough due to a lapse in FY96 appropriations or
a failure to raise the debt ceiling.
Prepare memorandum from Steve Colgate to the Heads of
Components providing guidance on procedural issues, LMR
responsibilities, delegations of authority for issuing
furlough notices, effects of furlough on employee
benefits and other important matters, and sample
communications to employees
Coordinate Personnel Staff efforts with Budget Staff
Evaluate updates on the nusibers of employees declared
essential by building to provide information on the
following:
1. number of available staff in health units
2. extent of delivery of cafeteria services in
Main Building and other Federal buildings
Coordinate with security staff on access to Department
buildings (we will be following a holiday schedule) and
shut down procedures for sensitive or classified
information.
Publicize that Travel Services will remain available
for those employees deemed excepted. The Travel
Management Center (TMC) Contract is paid for by the
commissions the contractor receives for ticket sales,
so no government funds actually support it. TMC
operations will continue, although they will reduce
staff in accordance with government reductions
Attempt to receive answers on outstanding questions,
i.e. new process for furloughed federal employees
filing unemployment compensation that is being
explored by the Department of Labor and expected to be
decided by September 12.
Write script for AG Hotline and discuss with Lam Hong,
of TSS.
417
NFC is working on a contingency plan in the event of a
furlough. They don't have the specifics yet, but will
be keeping us posted.
Coordinate Credit Union proposal, DJRA closing, JOHO
status .
Issue memorandun!, from Steve Colgate to the Heads of
Components providing updated guidance on the probable
furloughs, including reminder that all employees should
be notified as to their status, i.e. excepted or
non-excepted to avoid confusion on October 1-2.
(Assumes Department received approval of designations
from 0MB)
WEEK OF SEPTEMBER 11
Advise components that an 800 telephone number has been
established to provide recorded answers to employee
questions. There will be a fax capability so employees
can obtain written information on employee benefits,
i.e. health and life insurance coverage, retirement
benefits, TSP, workers compensation, leave and pay
matters .
Email draft furlough notices and draft decision letters
to designees identified by the components. Save
letters to diskette as requested by components without
access to the eagle network and distribute per their
specifications .
Incorporate the Department's guidance on outside
employment during the furlough into the paper on
employee benefits and other important matters.
WEEK OF SEPTEMBER 18
Prepare memorandum from Steve Colgate to the Heads of
Components with any updates that are available from 0MB
or 0PM regarding a furlough due to a lapse in
appropriations .
Monitor situation and disseminate additional department
guidance as it becomes available.
WEEK OF SEPTEMBER 25
Finalize arrangements in the event a furlough must
commence on October 1 and employee shutdowns are
completed on Monday, October 2.
418
Disseminate any last minute instructions that are
needed.
Ensure that components have clearly identified excepted
and nonexcepted employee and communicated these
designations to all employees in the organization.
SEPTEMBER 29TH (FRIDAY)
Notify all employees that they should report to work on
Monday, October 2nd (or October 1st, for employees
scheduled for weekend duty) , even in the event of
lapsed appropriations, to allow for the orderly
shutdown of the agency.
OCTOBER iSt
- Activate AG furlough information hotline.
OCTOBER 1st or 2nd
Suspend Departmental operations and give employees
(other than those excepted from furlough) decision
notices on furlough. Inform employees to listen to
public broadcasts and report to work as instructed.
- Upon completion of orderly shutdown dismiss non-
excepted employees.
f
419
Department of Justice Federal Credit Union
A FuU Service Hnandal Institution
DATE: August 31, 1995
TO: Vivian Jarcho
FROM: Jeff Moore
RE: Credit Union Furlough Assistance
/
DOJFCU is most interested in providing whatever assistance we can to DOJ employees who are
affected by a possible furlough. The assistance we anticipate providing includes:
1. Allowing existing members with loans to skip their required monthly loan payments
during October.
2. Waiving late payment charges on loans in which payments could not be skipped (such
as mortgage loans).
3. Allowing members with certificates of deposit to redeem their cenificates of deposits
without normally required penalties.
4. Provide loans to members, secured by their savings account, at a deeply discounted rate
of 4.5%.
5. Provide loans to members, without collateral, up to the amount of their net deposit to
the credit union at a rate of 6.0% (realizing the people who need the funds the most
might be the ones whose credit are the worst, we are still prepared to extend this to
every DOJFCU member who has their net deposit coming to DOJFCU).
6. Offer discounted rates on unsecured loans and home equity loans which can be used to
consolidate debts and ease the financial burden of the fiirlough.
7. Provide extended hours in our facilities and with our phone operations between
September 18 and September 28 so DOJ employees can discuss their needs.
While not all of the details have been worked out on all the above, these are the concepts with
which we are working. I am sincere when I say I am open to any reasonable suggestion which
you and John might have.
FO. Box 782 ■ VAshington. D.C. 20044-0782 ■ (202) 842-3200
420
4^^^ ^- ^- Department of Justice
Wrtlwiglon. DC 20S30
November 17, 1995
MEMORANDUM FOR HEADS OF DEPARTMENT COMPONENTS
FROM: Stephen R. Colgate
Assistant Attorney Gener
for Administration
SUBJECT: Furlough Update #1
This is an update on several issues concerning the furlough of
Department employees.
PAY CHECKS
Pay Period 22 Salary Payments - Official Payday, November 22,
1995 Salary payments for this pay period (October 29 - November
11) are not affected by the furlough. Salary payments will be
disbursed through normal distribution channels (Direct Deposit,
Home Mail or Designated Agent delivery) during the week of
November 19.
For those employees who have Direct Deposit, payments should be
received by financial institutions no later than Tuesday,
November 21, 1995. Please note that special arrangements may
need to be made for employees who receive their pay checks via
in-office. Designated Agent (DA) delivery. In the event that the
DA office is unstaffed, a centralized point of contact should be
designated and the employees notified as to where they can pick
up their checks. For employees in the Offices, Boards, and
Divisions, the centralized location is Room 1116, Main Justice
Building.
Pay Period 23 Salary Payments - Official Payday, December 7, 1995
At the present time, salary payments for this pay period
(November 12 - November 25) are impacted by the current lack of
funding which has resulted in the furlough of many employees.
All employees will be paid for any approved leave and/or work
performed on November 12 and November 13. However, as the
required funding for the salaries of most Department employees
lapsed at midnight on November 13, payment of salary for work
421
Heads of Department Components 2
performed after November 13 is generally not authorized at this
time. Those employees whose sources of funding are unaffected by
the general budgetary crisis will be paid based on the complete
Time & Attendance (T&A) record submitted for Pay Period 23.
Specific guidance will be provided regarding the completion and
transmission of Pay Period 23 T&As to address any unusual funding
scenarios or other issues which may arise.
We intend to work closely with Component Finance and Personnel
Officers to develop comprehensive instructions and guidance
relating to salary expenses for Pay Period 23.
LEAVE
The attached guidance from the Office of Personnel Management
(0PM) advises agencies that, after completion of shutdown
activities on November 14, paid leave may not be charged during
the furlough period. If an emergency employee requests and is
approved to be absent from duty — e.g., for medical treatment--he
or she should be furloughed for the approved time period.
UNEMPLOYMENT COMPENSATION
The attached guidance from the Department of Labor notes that
furloughed employees will be eligible, after the waiting period
established by the state in which the employee's duty station is
located, for unemployment compensation. Please note that under
the special filing procedures established for furloughed
employees in the Washington, DC metropolitan area (see JMD
Personnel Staff memorandum to Bureau Personnel Officers of
November 9, 1995), the Department will electronically transmit
the wages of all employees paid through the National Finance
Center. The local jurisdictions have advised us that this
electronic transmission eliminates the need for the agency to
complete or sign the claim form. (All claims forms should
indicate that the employee works for the Department of Justice.
Claim forms for employees working in Maryland should be annotated
with this claim number: 0065643006.) The Justice Management
Division is mailing the necessary forms to the home address of
each Washington, D.C. metropolitan area employee of the Offices,
Boards, and Divisions and other components that have requested
this service.
Please advise employees outside of the metropolitan Washington,
D.C, area to contact their local state unemployment office to
obtain the necessary form(s) to claim their benefits.
422
Heads of Department Components
Attachments
cc: Bureau Personnel Officers
423
INTERAGENCY ADVISORY GROUP
imrrco STATZs
OFTICE OF PERSONNEL MANAGEMENT
WASHINGTON. OC ZMIS
'^S;;^s..vw NOV I 7 1995
MEMOBANDUM FOK DIRECTOBS OF PERSONNEL
FROM:
x^
ASSOCIATE DXRECrOR
FOR HUMAN BESOIJRCES SYSTEMS
SUBJECT: Svppkmental Q*i and A't on Puitongfa Isnies
received by the Office of Persoxmei Maaageoiettt and the Office ofMaiBganent and Budget on
fiidough issues sfficting botb excepted and nonexcepted eoipbyeei mce the lapse in
appropriations that be^ on November 14. 199S. .
As used below, the tenn "TXCEPTED EMPLOYEES" refers to employees who are excepted
fimn a fiiilough because they axe paluiuiiug fimntions rdated to naTirmnl secority, protection of
ute or property, or the ordetly mtpeiwion of ageocy opentioos. (Employees m organiattuns not
afEectedbif the lapse in appiupiiationsaicgovcaued by the regular leave lulea.) OPM will provide
additional Q*s and A's as the need i
QL NONEXCEFTED EMPLOYEES reported fin- woiic at di£Ecrcat times on Tueaday,
November U, and worked vaiyingpedods of time befhre departing on furlough after
OMBiaRTOOed agencies to implement their phase-down plana. Mqr oonscoepted
employees who limited for work on November 14 be cooaidered to have been
fhriougbed fiv a unifbnn period of time on that day, or should agenrifg determine the
number of fiiriough houis on a case-by-case basis for each noncxcepted employee?
AL OFM recommends that agfpf<«^ make an efibit to detenmne, on a case4iy-case basis, the
amount of timfe each nonexcepted employegworiced on Tuesday, November 14. The
lemaimng period of time in the employee's regulaity scheduled tour of duty (after taking
into account part-time woilc schedules, imcommon tours of duty, or previously approved
flexible or compressed woric schedules) would then be considered finlaugh time, even if
the em;doyee had previously been scheduled to take paid or unpaid leave later in the day.
Q2. How should agencies treat EXCEIFTEI) or NONEXCEFTED EMPLOYEES who were
on qiproved leave on November 14 when the fiiriough took eSect and cfid not repoit for
work fi» the rest of the day?
424
A2. Both EXCEPTED aodNONEXCEFTED EMPLOYEES should be charged tlie
appropriate kind of leave for the approxiiuatc period of time &om the begsmiiig of each
indhridiul employee's Qoimal workday until the time other smolsly ««t»itw^ employees
diluted from woric t&a reoetving fislough tioticea. The mnutnimg period of time in the
coiployee's regnlaity scheduled tour of duty would be considered flnloug^ time.
However, an agency tnay subsequently temmiate the fiulough if the cmidoyee's services
axe requred fiir excepted activities folbtviog the absence and the employee is able to
report for work.
Q3. Afier Tuesday, November 14, may EXCEFTED EMPLOYEES take previously
approved anaial leave, sick leave, or other paid leave during the lapse in appropiigtions?
A3. No. W^imn ■!> ifirplnyii^ i* nnt at ■ainrlr anH ^■■■ffiimiing thf Miitj^f H^wmmw^ \^ ttlT
employing agcDcy to be allowable activities in oniniHanrr with the Antidefidency Act, he
or she cannot be in a paid leave statui. Thoefixre, Agencies must take one of the foOowing
actions:
(1) caned ai^ ^tproved leave and require the. employee to report fbr work; or
(2) Bslough the enqiloyeefbr the period of the employee's absence fiom duty. An agency
m^ subsequently tcnninate the fiulou^iftbeenqiloyee's services are still required for .
excepted activities following the absence.
Q4. Miv EXCEPTED EMPLOYEES be granted new leqoesti to annual leave, sick leive,
or other paid leave duting the lapse in appropiiatians?
A4. No. Ifan EXCEPTED EMPLOYEE requests paid leave or is unavailable to be at work
and perform tbe duties determined by the anploying agency to be allowable activities in
complhinne with the AntidcBdmcy Act, the agency oaist take one -of the foPownig
actions:
(1) deny the request for leave and require the employee to report for work; or
(2) fiulou^ the employee during the period of unsvailabiEty. Anagcncymay
subsequently terminate the foriou^ if the enq)loycc's services arc still required fbr
excepted activities following the abseoceL
Questions may be directed to the Office of Compensation Policy, Compensation Administtation
Divisioo, on (202) 606-285S, or the OfBce of Labor Relations and Workforce Petfonnaoce on
(202) 606-2920.
425
Rac»ived from the V. S. Department of Labor
Daemployment Insurance Systems
11/17/96
tmSHPLOXNEHT TJ/BUJtXKCE IMFOXUATION FOR FEOSSJU;, EXSLOYEES
DURXVG A SaUTDOWW OF VEDESAL AOEBOIBS
The duration of ttie current shutdown of the federal government,
and the furlough of 800,000 federal employees has lasted longer
than any previous shutdovms, and longer than anyone anticipated.
While Congressionail leaders have pledged to pass legislation to
ensure that Federal employees are compensated for this period of
furlough, employees are understandably concerned zQjout the work
interruption and the possible loss of income due to the furlough.
Many questions have arisen about eligibility and application i
procedures for unemployment insurance (UI) available to Federal II
employees. ^
The following Q's and A's provide basic information about this
process to Federal employees. Federal employees are reminded
that if they are paid retroactively for the furlough period, they
will be required to pay back any unemployment insurance benefits
received.
Are Federal eoployess eligible for Ol during a shutdown of
Federal agency operations?
Federal employees are eligible to collect UI during periods that
they are out of work under a special program called Unemployment
Compensation for Federal Employees (UCFE) . This' program is
operated by individual states, and eligibility and benefit i
amounts are determined under the law of the State in which the fl
individual works, (last official duty station). •
If a furlough as is lengthy and uncompensated, the conditions for
UI eligibility exist. Should the period of the furlough be
compensated, most State laws would disqualify individuals from UI
eligibility, since they would in effect receive income for the
time they were furloughed. In addition, many States require a
week of uncompensated unemployment before benefits become
payable. These two factors may mitigate against the receipt of
UCFE benefits by furloughed Federal employees.
Again, if there were any receipt of UI benefits, and the furlough
is compensated, the UI benefit emoimt would have to be paid back.
Bow do Federal employees file a claim diirlag a shutdown?
o In the Washington. D.C. Metropolitap Area
426
- The S'tatee of Maryland and Virginia, and the District
of Columbia have developed special nail-in claims
filing packages specifically designed for ftxrloughed
Federal employees. Some Federal agencies provided these
nail- in claims forms to employees prior to their
furlough.
. Other Federal agencies are mailing the appropriate
nail-in claims forms to eaployees, and these forms
should be received by employees by Monday, November 20.
If Federal eaployees have not received nail-in aiains
torma, they nay visit a VZ local office ia the District
of Coluobiay Maryland or Virginia to obtain a aail-ln
dain foxn. Employees should obtain the mail-in claim
form for the State in which their last official duty
station is located.
Copies of the mail-in claims forms for D.c, Maryland,
amd Virginia are in all Washington, D.C. metropolitan
local offices.
oataide the waahincton D.C. Metropolitan Area
- Outside the D.C. area, many states have also developed
special nail-in claims forms specifically designed for
furlough situations.
Zf Federal employees have not received claims filing
instmctions, they should contact the Employment
Security Department in the State in which their last
official duty station is located.
Tbe telephone number of this agency is in the State
Government section of the local telephone book, and
employees can locate the telephone number under the
term "Unemployment Insurance".
Many state Employment Security Department's will
provide information in the local media about special
claims filing instructions for federal employees who
work in their state.
What document/information should Z provide when filing a elaia?
o State Employment Security Agency claims filing instructions
contain that information.
o Federal employees may be asked to provide copies of any wage
and separation information concerning their Federal
employment, such as a W-2, SF-8, SF-50, or their last
earnings and leave statement.
427
U.S. Department of Justice
IMuftm^an, ac 20S30
November 9, 1995
MQIORANDUM FOR HEADS OF DEPARTME3IT COKPOMENTS
from:
SUBJECT:
'{)f-^^
STEPHEN R. COLGATE
Assistant Attorney General
for Adsinistratlon'
Potential Furlouaa Due to Lapse In Appropriations
We have juat received the attached guidance from the Director of
the Office of Kanagemenr and Budget (0MB) concerning the
potential for a lapse in appropriations effective at midnight on
Monday, NovenbBr 13, 1995.
Consistent with that guidance, you should, to the extent that
tine is available today, review your shutdown plans and advise
employees to report to work on Monday. The OMB guidance
indicates the steps that will be taken on Monday and, in the
event of m appropriations lapse, on Tuesday.
I have scheduled a meeting with your Executive Officers for
Monday, NoveBber 13, at 11 a.m. in the Andretta Room in the Main
Justice Building. Thev should note that the time for the meeting
hag been advanced.
We will discuss this information in more detail at Monday's
meeting.
cc: .Executive Officers
428
EXECUTIVE OFRCE OF THE PRESIDENT
OFPtCE OF MANASeMCNT AND BUDGET
WASHINSTeN. ac 20609
November 9, 1995
KEHOSAMDnM FOR HEADS OF EZEOmVE OBPARTMENTS
AND AGEBCIES
r
TKMi Alice M. Rivlin
Director
SOBJECT: Planning For Agency Operations
T*n«i laeBtorandum is designsd to help you plan your agezicy's
activities for next week, in light of recent developments on
fiscal 199S appropriations.
TSxe current Continnlng Resolution (OE.) expires at midnight
oo Monday, November 13, 199S. Ar this point, only two
appropriations bills have been enacted for fiscal 1996. W6 do
not know if Congress will pass a second acceptable CS. by Monday
*-yy^f will continue funding for activities that lack
appropriations. Because there is a real chanrp that this may not
occur, yoa should begin planning nav, as a contingency matter, as
follows :
Ttt^av. ThTirffllftYi iT«'«y*">^'^ ^ You should review your
afautdown plans and ensure that your an^oyees are properly
iBfozntBd. Afi noted above, the C3t ascpires at midnight, Monday.
Dierefore, Monday, Bovendser 13th will be a normal workday for the
Federal Goverosent. 70U should advise employees to report for
work on Monday.
^timA»^^ Mtoveinbeg 13; All employees should .Lupoit Cor work.
Ife will advise you of further developments, including whether a
OL wdLli lUcely be enacted, if not, you should prepare to
iaplement your shutdown plan on Tuesday.
yp^«.>«aY, MorvMber 14; Regardless of whether a CR has been
eaaeeed, all employees should report to work on Tuesday, we will
advise you on whether your shutdown plan is to be implemented, as
foUows.
Shutdown. If no CR has been enacted or will lUcely be
enacted Tuesday, we will issue instructions initiating
a phase-down o£ activities for non-exceptod en?>loyees.
You should complete such phase-down activities Cor non-
excepted personnel, if called for, during the first
t;|^T«»«» hours of the workday.
429
Mormal Operaticms: If a CR will lUcely be enacted on
Tttssday, we will advise agencies i.o operatie in a nozrmal
msnnex.
Afctachad is a eunsnary o£ otir general guidance on agency
operat:icsis in the absence of appropriations.
Tbaz:k you for your cooperaclon in these difficult
cxxcumatances . We will keep in dose touch with you as
davalopments unfold.
Atrarhwiwnt
430
QfBxeral Soidasce an. Agency
Op«xmt:iaas in the Absaaee o£ Ajiprapriatlans
CMB Bulletin SO-14, dated August: 28, 1980 (and anifeixded. by
ths OMB Director's ousorafidiss of November 17, 1981}, requires all
agencies ce naJTitain plans to daal vd.th. an appropriacions hiacos.
If a ahucdown occors, we aBiannw a«ch agency wtH be operating
undez* its shutdown plan as approved by OMB in Septeober. As a
xemindex-, the Attorney Qenaxal'a opinion dared January IE, 198X,
updated by the opinion of the Office of Zisgal Counsel dated
August 16, 1595, reoains in effect. Z& general;
o Btoployees of affected agencies performing non-excepted
activities (as discussed in the Department of Justice
opinions) nay oat perform any services other than those
involved in tha ozdarly suspension of non-excepted
activities.- excepted activities that nay be continued,
axe generally those that are authorized by lav or that
pKotect life and property.
e Jtgencies may not permit voluntary performance of nosi-
excepted services: and
o Agency hearts make the daterrni nations that axe necessary
to operate their agencies diiri ng an appropriations
hiatus (%dthin the guidance established hy the
Department of Justice opinions and this osmorandum, and
pursuant to nozmal agency processes for the resolution
o£ issues of law and policy) .
Please addrewn any questions to your OMB budget examiner (a) ,
or to OMB General Counsel Robert Damus (395-5044) , or Associate
Oenaral Counsel for Budget Rosalyn aettnsn (395-4778) .
431
U. S. Department of Justice
WoMjigion. D.C. 20530
NOV I 3 1995
HEMORANDUM FOR HEADS OP DEPARTMENT COMPONENTS
Ai^"^
FROM: STEPHEN R. COLGATt /
Assistant Attorney fceneral
for Administration
SUBJECT: Possibility of Furlough
As you are probably aware, the continuing resolution to fund
government operations expires at midnight on November 13, 1995.
It is possible that another continuing resolution will be
approved to cover Department of Justice operations until a FY 96
appropriation can be approved. Based on recent media accounts,
it is also possible that the budgetary and policy differences
between the Congress and the President may not be promptly
resolved and could result in a lapse in appropriations.
All employees will be expected to report to work as usual on
Tuesday, November 14, 1995, to engage in orderly shutdown
activities. We will keep you informed of the status of the
Department's funding during this period.
In the event of a shutdown, you will be required to issue
official furlough decision notices to non-exceptad employees and
to release them after 3 hours of shutdown activity on Tuesday.
Only those employees who, as identified in your approved
Contingency Plan, perform "emergency" functions (i.e., whose
duties involve the safety of human life or the protection of
property) or whose salaries are paid from other than FY 96
appropriations will be permitted to work.
The Department of Labor recently issued new guidelines for
unemployment insurance filing procedures in the Washington, D.C.
metropolitan area. They are being forwarded to Bureau Personnel
Officers under separate cover and should be followed in the event
of a shutdown of Federal agencies due to either a lack of an
appropriation/continuing resolution or in the event of a failure
to increase the debt ceiling.
Late in FY 95, materials were provided for your information and I
use in planning and implementing a furlough. You should use this
material to notify non-excepted employees of the possibility of
432
Heads of Department Components 2
furlough. We will issue updates and additions to this
information as conditions change.
You should also begin your internal planning for the issuance of
furlough notices to non-excepted employees. To assist in that
process, you were previously provided with the following
information:
• A delegation from the Deputy Attorney General giving
you the authority to issue furlough decision notices to
attorneys, members of the Senior Executive Service, and
incumbents of senior-level and scientific or
professional positions.
• A draft furlough decision notice for issuance to
employees. You must also ensure that furlough decision
notices are issued to employees on detail. These
employees are subject to furlough in the same manner as
employees who are not on detail. Employees should be
instructed to listen to the news media for instructions
about their return.
• Merit Systems Protection Board (MSPB) form and MSPB
regulations, which include the addresses of MSPB
regional offices, where employees may file appeals.
The appeal form may be given to employees with the
furlough decision letter or when they return to work.
Employees will also be able to obtain a copy of the
appeal form from the Furlough Information Hotline.
• A Department Security Officer memorandum concerning the
securing of sensitive and classified information during
furlough.
The draft materials were provided electronically to components on
the EAGLE and AMICUS networks. Three and 1/2" diskettes
containing copies of the materials in WordPerfect 5.1 format were
also provided for components who are not on network.
If furloughs do take place, the Department will activate on
November 14, 1995 a Furlough Information Hotline to provide
employees current information. The hotline numbers will be
(202) 514-1087 for Washington, D.C. Metropolitan Area callers and
1-800-521-6079 for long distance callers.
We will continue to apprise you of developments concerning the
shutdown of government operations, and provide updated guidance
as it becomes available. Questions concerning this matter may be
referred to Vivian Jarcho, the Personnel Staff's Assistant
Director for Policy, on (202) 514-6397, or in the event of
furlough, John Cahill of the Personnel Staff's Policy Group on
(202) 514-6778.
433
U. S. Departmeiil of Justice
Washiiiglon.D C 20SS0
MEMORANDUM FOR NON-EXCEPTED EMPLOYEES
FROM: (Head of Component)
SUBJECT: FURLOUGH DECISION NOTICE
This is to inform you that neither an annual appropriation nor a
continuing resolution has been enacted to provide funds for the
regular operation of the Department of Justice. Consequently,
the Department of Justice is without funds as of midnight,
November 13, 1995.
Under the Antidef iciency Act, no obligations may be incurred in
the absence of appropriations except for the protection of human
life or property, the orderly suspension of operations, or as
otherwise authorized by law. Because your services are no longer
needed for orderly suspension of operations and you are not
engaged in excepted or emergency activities, you are being placed
in a furlough status. The furlough status is effective
November 14, 1995, or upon completion of shutdown activities
which will occur no later than November 14, 1995. The furlough
is not expected to exceed 22 workdays. You should listen to
public broadcasts and when you hear that a continuing resolution
or a FY 1996 appropriation for the Department of Justice has been
approved, you will be expected to report to work on your next
regular duty day.
This action is being taken because of a sudden emergency. .
requiring curtailment of the Department's activities; therefore,
no advance notification is possible. The customary 30-day
advance notice period and opportunity to answer are suspended
under the provisions of 5 CFR § 752.404 (d)(2).
If employees are being retained in your competitive level, they
are required for orderly suspension of Department operations or
they are performing excepted activities or shutdown activities as
defined by the Office of Management and Budget.
During the furlough period, you will be in a nonpay, nonduty
status. Also during the furlough, you will not be permitted to
434
serve as an unpaid volunteer, but must remain away from your
workplace unless or until recalled. Since leave cannot be
granted on a nonworkday, all annual, sick, court leave, or leave
for bone marrow or organ donation is cancelled effective
Kovember 14, 1995, through the duration of the furlough period.
However, military leave must be charged on a nonworkday when the
nonworkday occurs wholly within the period of military leave for
military duty. Employees who serve as witnesses or jurors on
furlough days will retain all monies received from the court.
Employees who have completed a probationary or trial period or
one year of current continuous employment in the competitive
service under other than a temporary appointment may appeal this
action to the Merit Systems Protection Board (MSPB) . Employees
in the excepted service who have veterans preference may appeal
to the MSPB if they have completed one year of current continuous
service in the same or similar positions as the one they now
hold. Employees in the excepted service who do not have veterans
preference and who are not serving a probationary or trial period
under an initial appointment pending conversion to the
competitive service may appeal to the MSPB if they have completed
two years of current continuous service in the same or similar
positions in an Executive agency under other than a temporary
appointment limited to two years or less. Senior Executive
Service career appointees adversely affected may also appeal.
Employees have a right to representation in this matter and may
be represented by an attorney or other person of their choosing.
If you have the right of appeal to MSPB and wish to appeal this
action to the MSPB, you must file the appeal within 30 calendar
days after the effective date of your furlough. A copy of the
MSPB regulations and appeal form and the addresses of the MSPB
Regional Offices having jurisdiction over appeals will be
available in your servicing personnel office once the furlough
ceases.
The Department has established a Hotline to provide employees
with furlough information. Callers from the metropolitan area
should dial (202) 514-1087. For long distance callers, the
number is 1-800-521-6079. Information which describes _the
effects of a nonpay status (due to furlough) on employee benefits
and other matters is attached.
Bargaining unit employees may grieve this action in accordance
with the applicable negotiated agreement or may appeal to the
MSPB in accordance with the procedures outlined above, but not
both. To obtain information on filing a grievance under the
negotiated grievance procedure, contact your union
representative.
Attachment
.435
EFFECTS OF FURLOUGH ON EMPLOYEE BENEFITS
AMD OTHER IMPORTANT MATTERS
EMPLOYEE BENEFITS
Health Benefits - EnroiZ-mencs in Che Feaeral Employees' Health rsnefics
Program (FEHB) will continue for no mors than 365 days in a nonpay status.
The government's contribution will continue while employees are in a nonpay
status. Employees premiums will accumulate during the furlough and
contributions will be withheld from their pay upon return to duty.
Cancelling FEHB Coverage While on Furlough - Employees are cautioned not to
cancel FEHB coverage tc avoid payment cf premiums while in a nonpay status or
reduced-pay status. If cancelled, empi:yees must 'vait for a FEHB open season
to re-enroll. Further, cancellation of FEHB coverage may affect an employee's
right to carry such coverage into retirament or while in receipt of workers'
compensation.
Life Insurance - Enrollrents in the Federal Employees' Group Life Insurance
Program will continue irr 12 consecutive months in a nonpay status without
cost to Che employee or the agency.
Retirement - Retirement coverage continues at no cost to employees while in a
nonpay status. When employees are in a nonpay status for only a portion of a
pay period, their contributions are adjusted in proportion to cheir basic pay.
The exception would be an employee who had substantial time in a nonpay status
earlier in the year if the furlough causes him or her to have more than six
months time in a nonpay status during the calendar year.
Thrift Savings Plan - '.Then an employee is in a nonpay status for an entire pay
period. Thrift Savings Plan (TSP) employee and agency contributions are not
made for that pay pericd. This is true even if the employee is receiving
benefits from the Office of Workers' Compensation Programs. TSP
contributions, including the agency automatic (IV) contributions made to the
accounts of employees covered by the Federal Employees' Retirement System are
based upon the basic pay the employee earned for the pay period. Because the
employee's basic pay is zero, TSP contributions are zero. Employees cannot
make up the missed TSP contributions when he or she returns to pay scacus.
If an employee receives some basic pay for working a corcion of a pay period,
Che agency automatic (1%) contribution for the pay period is determined using
the basic pay the employee earned for the pay period. The employee's
contribution, based on a percentage of pay, is also determined by using the
basic pay earned for the pay period. For contributions based on a whole
dollar amount, the employee contribution is reduced to 10 percent of the
employee's basic pay (if FERS) or 5 percent (if CSRS) if the elected amount
exceeds the 10 or 5 percent limit. If the elecced whole dollar amounc exceeds
Che employee's net pay for the pay period, no employee contribution is made
for the pay period.'
Thrift Savings Plan Loans - Because under the TSP lean program, loan payments
may only be made through payroll allot:r.ents, employees in nonpay status are
not eligible to receive TSP loans until they return to pay status. If an
employee who has a TSP loan misses payr.ents for less than 90 days, the loan
payment schedule will be extended. However, the loan must be repaid in full
by the fifth anniversary of the loan issuance date for education, medical, or
financial hardship loans and by the eighteenth anniversary of t'r.e loan
issuance date for residential loans.
If an employee misses payment for 90 cr more days and (a) the employee is in
an approved nonpay status, e.g., furlcugh; and (b) the TSP has been so
Informed; and (c) the employee returns to pay status so that loan payments
436
resume within one year. -r.B employee tt-js: reanorcize the laan when he or she
returns to pay status. :f the employee :aiis to reamortize the loan, the l;an
must be prepaid in full. Zi the loan is not reamortized or prepaid in full, a
taxable distribution will cs declared.
In situations similar to -.-.at described above, except the TS? is not infor-ad
of the ncnpay status and i.-.e employee d:es not return to pay status, the
employee must prepay the l:an m full at the end of the first year of the
nonpay status or be subjert to a taxable distribution of the unpaid loan
principal and any accrued i.nterest. The Department has notified TSP of those
employees who have loans sr.d are furlcughed effective October 1, 1995.
PAY ISSUES
Holiday Pay During a Furlough - Employees are entitled to be paid for a
holiday, if they are furlcughed on the last workday before a holiday qx. the
first workday after a holiday. This is based on the presumption that, but for
the holiday, the employee would have worked. However, employees are not
entitled to be paid for a holiday if a furlough includes both the last workday
before the holiday and the first workday after the holiday. "n this
situation, there is no longer a presumption that, but for the holiday, the
employee would have worked on that day.
Continuation of Pay - Empliyees who are receiving continuation of pay (COP)
due to job-related injuries are maintained on COP status during periods of
furlough.
Senior Executive Service Perfomance Awards - The payment of performance
awards to Senior Executive Service employees may be delayed until after the
furlough when funds are available.
Payment for Court Services - Employees who serve as witnesses or jurors on
furlough days will retain all monies received from the court.
Workers' Condensation - '.•.'orkers ' compensation benefits will continue through
Che furlough period.
Deductions from Pay - When an employee's gross pay is insufficient to permit
all deductions to be made, deductions are made in accordance with the order
of withholding precedence established oy the General Accounti.ng Office. The
order of precedence is as follows: (1) civil service retirement and Medicare,
FERS (basic and Old Age Survivors and "isability Insurance 'OASDD , or OASDI
for those employees not r;vered by a Federal retirement system,- (2) Federal
income taxes; i3) health insurance premiums; (4) basic life insurance;
(5) State income taxes; '6) city income or employment taxes; (7) indebtedness
CO the United States; (8) garnishment for alimony and child support payments;
(9) court ordered bankruptcy payments under Chapter 13 of Title 11, United
States Code; (10) optional life insurance -- additional first, standard
second, and family third; (11) other voluntary repayments of indebtedness to
Che United States in the order specified by the employee; and (12) all other
voluntary deductions, starting with the Thrift Savings Plan or repayment of
loans from that plan for any employee FERS or not) contributing to the thrift
plan, and then allotments and assignments, which shall be made in the order
determined by the paying agency.
Hithin-Grade Step Increases - Within-grade step increases are awarded on the
basis of length of service and individual performance. Such increases may not
be denied or delayed solely because cf lack of funds. .However, extended
periods of nonpay status due to furlough for lack of funds, Tiay affect the
timing cf such increases. The amount ;f workweeks in a nonpay status that is
437
creii:2cl= cowards ::mplecicn of -r.i required waicir.g period for v.-il-in-grade
scecincreases is as follows: cvc workweeks for advancemenc zo scsps 2, 5 , and
4 cf rhe"E-eneral Schedule; four -.virkweeks for advancemenc to steps 5. 6, and
7- ir.d s^x workweeks for advancement to steps 8, 9. and 10. For prevailing
rate 'emoicyees (WG, '.IL, and WS s:r.=dules) , an aggregate of one wor.^week in a
noncsy status is creditable servire for advancement to step 2; three weeks for
advancement to step 3; and four weeks for advancemenc Co seeps 4 and 5. Thus,
if i General Schedule emoloyee in steps 1, 2, or 3 of the grade is furloughed
foi-'-ore than two workweeks during the waiting period, his or her •.-.ithin-grade
increase would be delayed by at '.east a full pay period.
nnemployment Coaqjensatlon - Feders: employees are covered for unemployment
insurance (UI) purposes under the Vnemploymenc Compensacion for Federal
Emplcyees (UCFE) program. The UC"E program is adrainiscered by the individual
States, and UCFE benefits are generally determined and paid under the UI law
of the' State which the Federal er.cioyee worked.
Sta'-'" UI laws provide for the pay-enc of parcial weekly araouncs when
individuals are employed less than full-time during a week. State "I laws
var- as to the number of hours and/or days the individual must be i- non-
erapioyment status during a week m order to be eligible for a partial weekly
pavT.enc, but in most cases, an individual in furlough status for : cr 2 days
duir-ng a week would not be eligicle for a parcial 'JCFE payment for tnat week.
Individuals at grade levels of grade 9, step 5. and higher would need to be on
fur'iugh status for at least 4 days per week in order co be eligible to
rec've a parcial UCFE paymenc ftr the week. In addition, most State UI laws
provide that the first week of u: and (UCFE) eligibilicy is a non-caid
"waiting week" and therefore, UCFZ payments would noc actually begin until Che
seccnd week of eligibilicy in States wich a "waicing week."
Individuals normally file UCFE claims ac the Scace agency local office nearesc
to where they live or work. The sddress and telephone number of these local
offices are listed under the Scats government sector in che local telephone
direccory-
LEAVE ISSUES
Leave Requests During Furlough - The necessity to furlough employees due to
lack of work or funds supersedes leave rights. Thus, all annual, sick, court
leave, or leave for bone marrow cr organ donacion is cancelled during che
furlough period. However, milicar/ leave muse be charged on a nonworkday when
che nonworkday occurs wholly within the period of military leave f:r military
duty .
Leave Without Pay During Furlough - Employees who are on approved leave
without cay (LWOP) during the furlough period may be continued in a LWOP
status if there is no expectation that che employees may return cc ducy on che
prccosed furlough days. The LWOF -nay be cerminated and employees placed in a
furlough status. However, such action is unnecessary since there is no work
or funds involved.
Use or Lose Annual Leave - Employees who have properly scheduled "use or lose"
annual leave and are unable to use some or all of the scheduled leave because
of a furlough should make every effort co reschedule che "use or l:se" annual
leave for use before che end of tne current leave year. However, if this is
noc possible, author icy may be granted to restore che leave afcer the
beainnina of Che new leave due ct an exigency of public business, i.e., the
need to furlough employees because of lack of work or funds.
Family and Medical Leave - Furlcuah days cannot be counted towards the 12 -week
entitlement to leave under the Family and Medical Leave Act (FMLA, . Employees
cannot take leave under the FMLA Dn days that coincide with che daces of
furlough.
438
EMPLOYMENT AND INJURY WHILE ON FURLOUGH
Eaploynent during Furlough - The standards of conduce frr executive brsr.ch
employees state in the definition of an employee that status as an empl:yee is
unaffected by pay or leave status. This means that Federal employees ■.<:ll
still be considered to be employees when on furlough and thus subject •:: all
of the r-^les on conduct .
The standards prohibit an employee from having outside employment that
conflicts with his or her official duties. Employees remain subject to this
requirerr.ent during furlough. Thus, an employee may not, now or during =
furlough, work for an entity he can affect in carrying cut his official
responsibilities. Further, employees subject to any approval requirement for
engaging in outside employment xill remain subject to that requirement iuring
furlough.
The only Department -wide requirement for seeking approval for outside
employment goes to the practice of law. If an employee would like to practice
law for coapensation, now or during a furlough, he must obtain approval from
the Deputy Attorney General. To engage in unpaid practice of law, he needs
only to obtain approval from his component head. Employees of Bureaus -ay be
required to seek approval before e.ngaging in other employment in addition tc
the practice of law. Such employees should consult their Deputy Designated
Agency Zthics Official for specific requirements. Generally, employees of the
Offices. Boards and Divisions have no other approval requirement. For
example, an OBD employee may, now and during a furlough, work for a fast food
restaurant or a supermarket, as long as there is no conflict with his
government duties,' without obtaining approval. All employees remain sucject
to other restrictions on outside activities including restrictions on partisan
political activities.
Volunteering to Perform Your Job While on Furlough - Agencies are not
permitted to accept voluntary services of an individual unless authorized by
law. Thus, an employee may not volunteer to do his or her job on a nonpay
basis during a furlough period.
Work on a Furlough Day in Exchange for Time Off for Religious Observances -
Employees may not work on a furlough day in exchange for taking a day off at
another time for religious observances. The statute that permits employees to
take compensatory time off for religious observances does not authorize an
agency to accept the voluntary services of any individual on a furlougn day.
Periods of time worked in exchange for taking time off for religious
observances must be scheduled on non- furlough days.
Injury While on Furlough - Employees are not eligible for workers'
compensation while on furlough. Workers' compensation is paid to employees
only if they are injured while performing their duties. Employees on furlough
are not in a duty status for this purpose.
SERVICE CREDIT
Time-in-Grade - Time in a nonpay status is creditable service for meeting
time-in-grade requirements.
Completion of Probation - An aggregate of 22 workdays in a nonpay status is
creditable service towards completing a probationary period.
Retirement - An aggregate nonpay status of six months in any calendar year is
creditable service. Thus, there is no effect on an employee's high-3 average
unless the furlough causes the employee to be in a nonpay status for irore than
six months during the calendar year.
Career Tenure - The first 30 calendar days of each nonpay period is creditable
service towards meeting the service requirements for career tenure.
Severance Pay - Nonpay status time is fully creditable for the 12-mont.-.
continuous employment period required by 5 U.S.C. 5595(b)(1) and 5 CFR
439
550. 7:s. However. :or purposes of determining service credicabis towards the
romp'jTStion of an empicyee's severance pay fund under S U.3.C. : = 9S!c)(l) and
5 CFR 350.707-708, no more Chan six months of nonpay status time per calendar
year is creditable service.
Military Duty or Workers' Compensation - Nonpay status for ampicyees who are
perfcrming military duty or being paid workers' compensatisn counts as a
continuation of Federal employment for all purposes upon the employee's return
to duty.
Annual and Sick Leave - When an employee accumulates 80 hours of nonpay
status, his or her annual and sick leave credits are reduced by an amount
equal to the amount of leave the employee earns during that pay period. For
purposes of computing annual leave accrual rates, creditable service is
limited to an aggregate of six months nonpay status in a calendar year.
EMPLOYEE SERVICES
Department of Justice Recreation Association - The Department of Justice
Recreation Association facility located in the Main Justice building will be
open during Che furlough period.
DOJ Cafeteria - The cafeteria in the Main Justice Building will be open
during the furlough period.
DOJ Federal Credit Onion - The DOJ Federal Credic Union (DOJFCU) , located in
the Main Justice Building, will be open during the furlough period. The
DOJFCU has informed the Department chat chey are developing a series of plans
to help ease the financial burden on employees being placed in a nonpay status
The plans include special loan programs to its members, the elimination of
certain fees and penalties on savings and loan programs will eliminated; and
extended service hours to provide financial counseling. Additional
information may be obtained directly from DOJFCU by calling (202) 842-3200
(local calls) or 1-800-842-3200 (long distance callers).
Health Units - The Health Unit will be open in the Main Justice Building if
the building is open.
Justice Occupational Health Orgemizatlon - If employees are furloughed che
Justice Fitness Center will be closed.
Travel Management Center - Beginning October 1, 1995, Omega World Travel (OWT)
will replace Carlson-Wagonlit Travel as the Department's nationwide Travel
Management Center. Omega's main reservation/ticketing location will be on che
first floor of the Bicentennial Building at 600 E Street. N.W. A small branch
office for ticket pick up will be Located in the Main Justice Building, at che
same location used by Carlson. These two sites are for employees of the
Offices, Boards, and Divisions, and the Immigration and Naturalization
Service. A resei-'/ation center will be located at 320 First Street, N.W. for
employees of the Bureau of Prisons. A reservation center for employees of the
Drug Enforcement Administration and United States Marshals Service will be
located at 700 Army Navy Drive, Arlington, Virginia. Omega will be open
during the furlough' period.
Employees may call the following telephone numbers for services:
Offices. Boards, and Divisions/'Immioration Service
Regular hours (7:30 a.m. - 5:30 p.m.) (202) 393-8240
Regular hours - Toll Free 1-800-366-3493
After hours - Toll Free 1-800 685-6342
Bureau of Prisons
Regular hours (202) 393-8266
Druo Enforcement .i.-dministration/US. Marshals Service
Regular hours (703) 412-2714
440
U.S. Department of Justice
Waslwigioii, OC 20S}n
November 14, 1995
MEMORANDUM FOR HEADS OF DEPARTMENT COMPONENTS
STEPHEN R. COLGATE
Assistant Attorney General
for Administration
SUBJECT:
Employees on Detail During the Furlough
The Office of Legal Counsel has advised that the determination
whether an employee who is detailed to another agency (including
an agency in another branch of the government) should be made by
the receiving agency. That is, if a Department of Justice
employee is detailed to the Treasury Department, it is the
Treasury Department which determines whether the duties being
performed by the detailee exempt him or her from the furlough.
cc: Executive Officers
1
441
U.S. Department (if Justice
lyasJuiigioii, DC. 205 JO
November 14, 1995
MEMORANDUM FOR HEADS OF DEPARTMENT COMPONENTS
^2^
FROM: STEPHEN R. COLGATE 0^
Assistant Attorney General
for Administration
SUBJECT: Implementation of Continqency Plans
In view of the fact that neither a continuing resolution nor an
annual appropriation for the Department of Justice was enacted as
of midnight, November 13, 1995, you should proceed with the
implementation of your contingency plan and the release of all
"non-exempt" employees after three hours of work today.
442
U.S. Department of Justice
Washiiision, D.C. 20S30
November 17, 1995
MEMORANDUM FOR HEADS OF DEPARTMENT COMPONENTS
STEPHEN R. COLGATE
Assistant Attorney General
for Administration
Guidance for Presidential Appointees
We have received the attached memorandum from the Deputy Director
of the Office of Management and Budget (OMB) which provides
guidance concerning the activities in which Presidential ("PAS")
appointees may engage during the furlough period. You should
review the guidance and ensure that you and appropriate members
of your staffs are complying with OMB's direction.
There is also attached a list of examples of the effects of the
furlough which OMB has assembled.
Attachments
cc: Executive and Administrative Officers
443
EXECUTIVE OFFrCE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON. D.C. 20S03
DEPUTY DIRECTOR
rOR MANACEMCNT
November 16. 1995
MEMORANDUM FOR THE PRESIDENTS MANAGEMENT COUNCIL
iooymK
FROM: John A Koskini
1/ ■
RE: Guidance for Activities of Polmcal Appointees and Other Official^
Enclosed is guidance to political appointees on activities during periods of shutdown.
Also included is a discusaon regarding appearances by political appointees.
These raaterials were distributed at the cabinet meeting this evening and I would
appreciate your ensuring that all appropriate ofiEdals receive copies.
Also enclosed is a set of examples of the impaa of reduced govemmeni services. We are
continuing to expand this document.
I will be organizing a conference call for tomorrow at 2:00 p.m. to discuss emerging issues
surrounding the shutdown.
Alice M. Rivlin
LanyHaas
Kitty Higgins
CFO CouncU
Pcm/Ecm
Agency Chie& of Staff
Agency Shutdown Contacts
444
Gmdance to PAS and Other Oflidals
on Actmties During Period of Shutdown
General Guidance
A PAS official needs to be able to cany out his or her "chain of command*
constitutional responsibilities with respect to those activities of the agency that
continue during a shutdown. An agency's "shutdown activities" consist of —
— those activities for which there exist an appropriation (e.g., a
permanent appropriation),
-- ceitaia constitutiooal activities,
~ "excepted" protection of life and property activities, and
— activities that fall within exceptions e;q)rcssly authorized by law or that
are necessarily implied by other authorities.
Because the obligation to pay PAS officials arises from their status, and
without regard to whether they perfonn any services, a PAS official is not
limited to performing 'shutdown activities," but may also perfonn
non-' shutdown actndties."
A PAS official needs to receive that level of staff suppon which is necessary
for the PAS official to cany out his or her constitutional "chaia of command'
responsibilities with respect to the agency's "shutdown activities" (i.e., the
PAJS official's "shutdown responsibilities').
Thus, a PAS official needs to identify wiiich staff are necessary for the PAS
official to cany out his or her "shutdown responsibilities" (i.e., the PAS
official's "shutdown stafT).
— An employee may not be included in the PAS official's "shutdown
StafT unless it is reasonably anticipated thai the vast majority of the
employee's workday will be devoted to supporting the PAS official
widi regard to "shutdown activities." This is the same principle that
applies, for example, to those employees who are on-board in order for
the agency to perform constimiional or "excepted" functions ~ it must
be reasonably andcipated that the vast majority of each employee's
workday will be devoted to performing those fiinctions.
445
— Tbus. when a employee needs to be on-boaid because the vast majority
of his or her workday will be devoted to "shutdown activities''
(including supporting a PAS official in performing the official's
"shutdown responsibilities"), the employee may devote incidental
periods of the woricday to non-"shutdown activities" (i.e.. assuming no
marginal obligations are incurred). Otherwise, the government would
be paying for a fiill woricday, but getting oidy pan of a workday.
However, alth^.ugh incidental non-"shutdown activities" may be
performed, the employee's first priority must be the performance of
"shutdown activities."
PAS Officials and Travel
o Outof Towq.
o A PAS official mav travel out-of-town to carry out that official's "shutdown
responsibilities."
o To the extent that additional employees are needed to assist the PAS official in
carrying out his or her "shutdown responsibilities," the PAS official may bring
along employees who would otherwise be on-board because the vast majority
of their workday will be devoted to "shutdown activities." While out-of-town,
the vast majority of the employees' workday must be devoted to "shutdown
activities" (if not, then those employees should be back in the office or on
furlough).
o Because out-of-town travel involves an agency incurring marginal obligations,
a PAS official may ngt travel out-of-town to cany out non-"shutdown
activities" (just as an "excepted" employee may not travel out-of-town to carry
out non-"shutdown activities").
o In Town.
o A PAS official mav travel in-town to carry out that official's "shutdown
responsibilities."
o To the extent that additional employees are needed to assist the PAS official in
carrying out his or her "shutdown responsibilities," the PAS official may bring
along employees who would otherwise be on-board because the vast majority
of their workday will be devoted to "shutdown activities."
o PAS official mav travel in-town to carry out non-" shutdown activities" so long
as no marginal obligations are incurred (e.g., no cab fares).
40-190 97 - 15
446
o To the extent that additional employees are needed to assist the PAS official in
carrying out a non-"shutdown activity, ' the PAS official may bring along
employees who would otherwise be on-board because the vast majority of their
workday will be devoted to 'shutdown activities. " Thus, the duration of the
non-"shutdown activity" must be limited to an incidental portion of those
en^)loyces' time (if not, then those employees should be back in the office or
on furlough). In addition, although incidental non-'shutdown activities" may
be perfoimed, the employee's first prioritv must be the performance of
'shutdown activities.'
m. Testimony by PAS and Other &npIoyees
o PAS may testify whether or not the testimony would otherwise fall within their
responsibilities during shutdown.
o Support persons may not assist the PAS unless:
— the PAS is testifying under subpoena,
— activity is independently justified as an excepted activity (i.e. assisting
the PAS in this regard is not an independent "excepted activity" by
itselO, or
— the assistance is undertaken during any brief, incidental and unplanned
periods during the
workday when excepted activities do not need to be performed.
Qft^er Fjnplnyftes
Non PAS employees who are otherwise excepted may not testify (absent
subpoena) unless the testimony is covered under one of the standard excepted
activity categories — that is, such testimony by itself is not an independent
basis for a shutdown exception.
Employees otherwise on furlough may not be called back to duty simply to
testify (absent subpoena) since testimony is not an independent basis for a
shutdown exception.
447
*iPP'^"1"y« of Political ApDointws
As 4i«^»««p<< in the guidance provided on travel and attendance at Congiessional
hearings, PAS officials should ensure that ottier activities undeitakea aie consistent widi the
&ct that much of the government has been shutdown. Public appearances diat address the
iffipaa of the shutdown on govenunent enq>loyees or on other afifectrd publics aze deaily
appropriate. Similariy, activities that are integral to the management of the agency or the
protecti(m of employee morale during this period are encouraged. However, managers
should examine carefully other appearances and activities that under normal circumstances
would be appropriate but under current ciraimstances might be questionable. For example,
some managers may determine that particqiation in some types of routine, narrowly focused
public events or f<Kums would be inappropriate under cunent circumstances.
448
EXAMPLES OF REDUCED GOVERNMENT SERVICES
A. No new OASDI and SSI benefit ^>plications are being processed.
1. On an average day, SSA receives 28,000 a|^lications for retirement,
survivors, or disability benefits for OASDI and SSI. In addition, it handles
200,000 calls through itt 800 telqihonc service, which is dosed during the
shutdown.
2. On an average day, SSA receives 60,000 requests for new or rq>laceme&t
Social Security cards and receives 75,000 visits to local field offices.
B. No new applications for Veterans benefits are being processed.
1. On an average day, VA processes 1,613 new claims for con^>ensation and
pension benefits and 8,074 claims actions from existing beneficiaries for
adjustments to their benefit amount
2. On an average day, VA processes 883 original claims for Montgomery GI Bill
and other veterans education benefits and 4,570 claims for adjustments firom
current beneficiaries.
3. If an ^propriation is not enacted by November 21, over 3.3 million vetexans
and survivors will not receive their benefit checks.
C. No new ^iplications for Medicare are being processed.
1. On an average day, HHS imcesses 10,000 new Medicare beneficiaiies.
D. Head Start services are doeatened.
1. >^thin several days, 60,000 Head Start children willlose services and 11,000
Head Stan staff will be without funding.
E. "Deadbeat Dads' are getting a holiday through the shutdown.
1. The Federal Parent Locator Service to which on average, 20,000 cases per day
are referred is closed.
449
F. Vital legal and law enforcement functions are shutdown or delayed.
1. FBI training of agents and state and local law enforcement officers has ceased.
2. The FBI's liaison function with state, local, and international law enforcement
has been canceled.
3. Federal law provides that only the Attorney General may authorize a Federal
Prosecutor to seek the imposidon of the death penalty. Processing of these
requests — in violent crime and narcotics cases — will be substantially delayed.
4. All dvil litigation has been postponed to the extent possible. This exposes the
United States to significant liability and means that lawsuits which could be
filed on behalf of the government against, for example, elderly fraud
<^)etators, will not be filed. The effects will be fdt by the taxpayer in general
and by victims in pardcular.
5. Investigations of enq>loyment discrimination on the basis of race, sex, religion,
or national origin are suspended.
6. Processing of prison grant applications is slowed down. Appropriated funds to
assist states in constrticting and bringing on line new prison fecilities is
delayed.
7. Collocticm activities by Justice's Qvil Division have ceased. Tlie cessatim of
ctdlectitti activities means that the Treasury receives less income and thus the
deficit actually grows. In addition, individuals who owe the government
moaey can withhold payment without any particular penalty.
G. FHA mortgages are halted.
1. On an average day, the Federal Housing Administration processes 2500 home
purchase loans and refinancings totaling $200 million worth of mortgage loans
for modeiate-and low-income woridng families nationwide. The shutdown has
halted these activities delaying home ownership for those who have played by
tbeT\iles.
H. Reduced funding to poblk housing authorities.
1. On an average day, EDUD provides S25 million in operating subsidies and
modemizatioo funds to the 3400 local housing agencies who in turn provide
public housing and services to 1.4 million low-income households. Shutoff of
this funding will potentially prevent public housing authorities from paying
utilities, providing basic maintenance needs, or paying staff.
450
I. Reduced funding for homdess services.
1. A ooe-day shutdown of HUD's Line of Credit G>ntr(d System could pieveit
the ddiveiy of essential housing and emeigency services provided to at least
32,000 homdess persons.
J. Many protectjons for American workers aie su^)ended due to the shutdown of
mudi of the Labor DqartnienL For each day of the shutdown:
1. 95 percent of workplace safety oMnplainis are going unanswered.
2. 170 wotkpiacc safety and health inflections are not being performed.
3. 190 wodcer complaints of minimum wage and overtime violations would
remain imtesolved.
4. 500 requests for information and assistance from pensioners participating in
plans with S3 trillion in assets are going unanswered.
EL National Park Senrices facilities are closed.
L On an average dof, 726,000 people visit National Park Services facilities.
2. On an average day, 55,000 people visit National Paric Services facilities in the
National Capital R^on, sudi as the Washington M(Miument, Ford's Theater,
die White House, and Great Falls Park.
L. The Smidisoniaa museums, Kmnedy Cento', National Zoo, and National Gallery
(^ Alt are closed.
1. On an average day. 80,000 people viat the Smiihsooian Museums on the Mall
and the National Zoo.
2. On an average day, 12,400 pec^le visit the Natunal Gallery of Art.
3. On an average day, 6,900 people visit die JFK Center for Performing Arts.
(This does not include individuals who pay to attend performances, for which
die Kennedy Center will continue to be opea.)
M. Applications for passports are not being processed and new pas^rts are not being
issued.
451
1. On an average day, die State Dqiaitmeat receives 23,000 applications for
passpoits.
2. On an average day, the State Dqartment issues 22,000 passports.
N. No recruits to join the anned forces are being processed or inducted.
1. On an average day, over 700 memben of the aimed forces are enlisted.
O. The Federal Employment Information System i!s closed.
1. On an average day, 24,000 Amedcaas will be denied access to job
information including veterans transidcniog from active duty to civilian life,
disahlftri veterans vriring information about special hiring programs, college
students seeking careers in public service, and displarrd federal employees
seeking outplacement.
P. Tfiring for Law Eiiforcement Positioits has been interrupted.
1. Hiring of \q> to 400 new Border Patrol Agents has already been delayed by the
cancellation of two recruitment cycles.
Q. Assistance to Small Basintsscs has been interrupted.
1. On an average day, ova 260 small business will not receive SBA guaranteed
financing totaling over S40 million of loans.
2. On an average day, over 90 small business will be prevented from bidding on
government contracts because tb^ will be imable to receive SBA guaranteed
bid bonds which allow them to bid on those contracts.
i. On an average day, 1200 small business owners will not receive SBA-
sponsored traimog and counseling normally available to them.
R, American esq;>orting boanesses are being disadvantaged during a shutdown.
1. On an average day, over 30 expoit licenses with a value or $30.5 million that
would otherwise have been ai^roved by the Bureau of Export Administration
are not being acted upon.
2. On an average day, over 2S0O telq>hone calls and £axes from U.S. businesses
srfVing export advice, infonnatioa and counseling are not being responded to
by the Bureau of Export Administration or the International Trade
Administration due to the shutdown.
452
U. S. Departmeat of Justice
Office of Legal Counsel
Office of lh> Waikuiitan, D. C. 20530
Alliiunl AtloriMy OcnanJ
November 16, 1995
MEMORANDUM FOR JANET RENO
ATTORNEY GENERAL':
Vi
From: Walter Dellinger \/\J
Re: Participation in Congressional Hearings during an Appropriations Lapse
The Department of Justice has been informed that various congressional committees
intend to hold hearings at which Department of Justice officials have been requested to
testify, during the period in which the Department lacks appropriations to pay for the
services of those officials. You have asked under what circumstances Department officials
may participate in these hearings.
The Antideficiency Act ("Act") provides that "[a]n officer or employee of the United
States Government or the District of Columbia government may not . . . involve either
govertunent in a contract or obligation for the payment of money before an appropriation is
made unless authorized by law." 31 U.S.C. § 1341(a)(1)(B). In addition, the Act
establishes that "[a]n officer or employee of the United States Government . . . may not
accept voluntary services ... or employ personal services exceeding that authorized by law
except for emergencies involving the safety of human life or the protection of property." 31
U.S.C. § 1342. These provisions are enforceable by criminal sanctions and their
requirements must be observed. All federal officers and employees must comply with the
law, whether they serve in the executive, legislative, or judicial branch. Where the Act
applies, it restricts the functions that federal officers and employees may perform during an
appropriations lapse to only those functions that are encompassed by one of the exceptions to
the Act's general prohibitions. The question thus becomes under what conditions, if any,
does participation in congressional hearings constitute an excepted function for employees
subject to the Act's restrictions.
Before addressing those exceptions, we note that the Act is not implicated at all by
the activities of federal employees for whom no obligation in advance of an appropriation is
incurred by employing a particular individual, even when appropriations are currently lacking
for that individual. A prominent example is provided by those officers who are appointed by
the President with the advice and consent of the Senate. These officers are entitled to their
salaries by virtue of the office that they hold and without regard to whether they perform any
453
services during the period of appropriations lapse. SfiS United Stetes v. Grant. 237 F.2d 511
(7th Cir. 1956). Therefore, no federal officer or employee incurs an obligation in advance
of appropriations when these officers perform services; instead, this obligation arises by
virtue of their status and caimot be obviated by placing them on furlough status.'
Where the Act does not apply, as in cases like these, officers and employees may
participate in congressional hearings, although the participation of Senate-confirmed officers
is subject to the significant limitation that support persons to whom the Act does apply may
not assist those officers unless these activities are independentiy justified under the Act's
exceptions. You have indicated that you do not intend to make available Senate-confirmed
officials of the Dqiartment to participate in congressional hearings unless they have adequate
and thorough support to ensure fiiU preparation. This effectively means that the exceptions
of tiie Act define the limits of the Dq)aitment's ability to comply witii requests for
testimony. We turn, therefore, to address the scope of those excqitions.
There are two major excq)tions to the Act. First, there is an excq)tion for functions
that relate to "emergencies involving the safety of human life or the protection of property."
31 U.S.C. § 1342. The Act states that this phrase "does not include ongoing, regular
functions of government the suspension of which would not imminentiy threaten the safety of
human life or the protection of property." LL In the highly unusual event that suspension of
the Department's participation in a congressional hearing would imminentiy threaten the
safety of human life or the protection of property, the Department may legally participate in
the hearing.
' Similarly, the Act would not forbid a fiirlougbed oflicer or employee from paiticipiting in i coogressional
bearing if that officer or employee participated in his or her individual capacity. So, for instance, an officer or
employee who is nominated for a position that is subject to Senate confirmation may, while on furlough status,
participate in his or her own confirmation hearing.
Another analogous situation may arise when a non-Senate confirmed officer or employee reports for
work because his or her dutie* fall within an exception to the Act, but there are intervals during the day when
the officer or employee is not engaged in an excepted function. If these intervals are anticipated to be brief,
such that the officer or employee could not be dismissed from work and then recalled in lime to perform the
n:xt excepted function activity, then the employee may remain at work throughout the intervals. During these
intervals, officers and employees may perform non-excepted functions, because the need for the officer or
employee's availability would justify the Department in keeping the officer or employee in the close vicinity of
his or her duty station to await the onset of the excepted function. Consequently, the Department would be
obligated to compensate such employees while they are awaiting the excepted function work whether they spend
this interval performing the non-excepted function or simply sit idle. During these intervals, then, such officers
and employees are akin to Senate-confirmed presidential appointees in that they must be paid for these intervals
regardless of whether they perform a oon-excepted fiinction, and thus the government incurs no additional
obligation by virtue of that work being performed. The non-excepted fiinctions that such officen or employees
may perform during these brief intervals between excepted functions include services relating to participation in
congressional hearings where participation is not otherwise authorized.
454
The Act also states that governmental functions that are otherwise authorized to be
undertaken despite a lack of appropriations may continue during an appropriations lapse. S^
31 U.S.C. § 1341(a)(1)(B); nL § 1342. In the context of the Dqiartment's participation in
congressional hearings, there are two types of authority that satisfy this "otherwise
authorized* exception: express authorization and necessarily implied authorization. See
Authority for the Continuance of Government Functions during a Temporary Lapse in
Appropriations. 5 Op. O.L.C. 1, 3-5 (1981).
Officers and employees of the Justice Department may participate in congressional
hearings that take place during a lapse in appropriations if there is express legal authority to
participate despite a lack of appropriations, or an express requirement to do so. We are not
aware of any statute that grants the officers and employees of this Department such authority
in the case of general requests for congressional testimony. Express authority would exist,
however, if Congress or a committee were to issue a subpoena requiring the Department or
specific officials to participate in a hearing during an appropriations lapse. Departmental
policies with respect to responsibilities to the judicial system provide a precedent: it has long
been the Department's position that, during an appropriations lapse, attorneys representing
the govenunent are to comply with a court order that they continue with litigation even
though the litigation does not fall within an exception to the Act. Ss& Memorandum for
William Tyson, Director, Executive Office for United States Attorneys, from Robert Shanks,
Deputy Assistant Attorney General, Office of Legal Counsel, addendum, at 2 (Mar. 24,
1982); see also Rojas v. United States. 55 F.3d 61 (2d Cir. 1995) (scheduling order imposes
a duty on attorney, nonperformance of which can subject attorney to contempt sanctions
under 18 U.S.C. § 401(3)). We would follow the same principles with respect to a
congressional order that imposes a legal duty. SaJ 2 U.S.C. §§ 192, 194 (imposing legal
duty to comply with a duly issued legislative summons or subpoena).
The Department's officers and employees may also participate in a hearing despite an
appropriations lapse if authority for such participation arises by necessary implication from
another specific statutory duty or duties. SfiS 5 Op. O.L.C. at 3-5. In the context of
congressional hearings, this exception permits the Department to participate where there is
express authority or an express and specific appropriation for the hearing itself, and the
Department's participation is necessary for the hearing to be effective, even though there is
no specific authority or <^7propriation available for the Department to participate. This
exception also operates where there is express authority for a si)ecific Department official to
participate - such as might arise from a subpoena - but no express authority for support or
assistance of the witness. The Department would regard support and assistance to the
otherwise authorized participation as being justified by necessary implication. This approach
follows from the well-settled practice with respect to Social Security. S^ 5 Op O.L.C. at 5
n.7.
We are not aware of any other exceptions to the Act that would permit the
Department to participate in congressional hearings during an appropriations lapse. It has
from time to time been suggested that the "authorized by law" exception to the Act includes
-3-
455
all activities that derive from or relate to a constitutional power, such as the "legislative
power." Such a construction would authorize Congress to continue holding hearings during
an appropriations lapse and would allow the Department to participate. Such a construction,
however, is impermissible because it would necessarily nullify the Antideficiency Act. The
federal government is a government of limited and expressly enumerated powers. Those
powers are denominated in the Constitution, and the federal govenunent may only undertake
those activities that are constitutionally authorized. SSfi United States v. Lopez. 1 15 S. Ct.
1624 (1995). Consequently, if all constitutionally authorized functions - legislative,
executive, and judicial — were excepted, the Act would not apply to any activity of the
federal government.
We have also considered whether a decision by Congress to go forward with hearings
in which DcpaitmtM officers caimot participate would result in a congressional encroachment
upon the President's constitutional authority.' We conclude that no encroachment would
occur. The Supreme Court has repeatedly pronounced that statutes are to be construed to
avoid serious constitutional questions, where such a construction is permissible. See, e.g..
Crowell v. Benson. 285 U.S. 22, 62 (1932). Attorney General Civiletti recognized in his
1981 opinion that it would "raise grave constitutional questions" if the Act were to be read to
prohibit the President from exercising his constitutional powers. 5 Op. O.L.C. at 6.
Construing the Act as covering executive branch participation in congressional hearings
generally, however, does not raise grave concerns over impermissible congressional
encroachment on the executive's constitutional role.^ The Constitution grants the President
authority to "recommend to [Congress's] consideration such measures as he shall judge
necessary and expedient." U.S. Const, art. II, § 2, cl. 2. Congress does not encroach upon
this power by revising to include the participation of the President or his subordinates in a
regular congressional hearing, however unwise and counterproductive such a decision might
' We have applied this same analysis in examioing the application of the Act to the judicial branch. See
Memorandum for William Tyson, Director, Executive Office for United States Attorneys, fh>m Robert Shanks,
Deputy Assistant Attorney General, Office of Legal Counsel, at 2 (Mar. 24, 1982); cf. Plant v. Spendthrift
Farm. Inc.. IIS S. Ct. 1447 (1995) (striking down congressional encroachment on the judicial branch).
' This assertion is made with the exceptions to the Act in mind. We believe that any instances where grave
conceras might otherwise be raised would fall within the emergency exception or one of the other exccptioos to
the Act. We also note that the Act does not raise corresponding encroachment concerns when applied to
Congress. Whereas the Attorneys General and the courts appropriately remain vigilant against congressional
encroachment, there is no 'grave constitutional' obstacle that prevents Congress, through the Act, from
deciding to curtail - or to postpone until appropriations are available - regular legislative, investigative, or
oversight hearings. Moreover, the Act does not prohibit members of Congress by themselves from conducting
hearings, because their salaries are paid from permanent appropriations. It is extremely difficult to see how
interpreting the Act to preclude Department of Justice officers or employees from participating in those hearings
would raise a grave question as to whether Congress has encroached on its own constitutionally-based authority
to conduct hearings.
-4-
456
be. So long as the President retains a means of making legislative recommendations,
Congress generally is not obligated to grant the executive a platfonn at its hearings/
The Antideficiency Act places a substantial limit on the functioning of federal officers
and employees generally, including officers and employees of the Dq>artment of Justice.
These limits extend to participation in congressional hearings conducted during a period of
lapsed appropriations. During such a period, an officer or employee of the Dq)aitment of
Justice may participate in congressional hearings if he or she is a Senate-confirmed officer, if
appropriated funds are available for his or her participation, if he or she is subpoenaed, or if
the hearing falls within one of the categories set forth above.
* Thai said, the decision to exclude the Presideol from the deliberalioiu at crucial momenU in the
legislative process would be relevant in a presidential decision to veto such a bill.
-5-
457
Department of Veterans Affairs
Assistant Secrctary for Human Resources And Administration
Washington DC 20420
APR 0 H W96
The Honorable John L Mica
Chairman, Subcommittee on Civil Service
House of Representatives
2157 Raybum House Office Building
Washington, DC 20515-6143
Dear Mr. Chairman:
This is in further response to your letter of January 18, 1996, with follow-up
questions from the Subcommittee's December 6, 1995 hearing, "The Government
Shutdown: What's Essential?"
In my letter of February 12, 1996, we provided responses to questions 1, 2, 4, 7, S
and 10 of your inquiry Enclosed are responses to questions 5, 6, 11 and 12. Responses
to the remaining questions (3 and 9) will be forwarded in approximately 30 days
Sincerely yours,
Enclosure
458
Follow-up Questions
Subcommittee on Civil Service
Hearing December 6, 1995
'The Government Shutdown: What's Essential?''
Question 5: Please estimate the total costs to your agency associated with the
interruption of operations during November and December-January. Please
provide descriptions of any unusual costs imposed on the agency or other
unanticipated consequences of these interruptions of operations. Please provide,
too, an estimate of any savings associated with these interruptions.
The following tables provide the estimated payroll and non-payroll costs the Department
incurred with the interruption of operations during November and December- January.
The payroll costs are salaries paid to employees who were flirloughed and the overtime
associated with backlog caused by the interruption of operations. The non-payroll costs
include lost interest penalties under the auspices of the Cash Management Improvement
Act; lost discounts; and postponed travel.
Estimated Payroll Costs of Furloughed Employees
Includes Overtime Used to Reduce Resulting Backlogs
Veterans Health Administration (VHA):
Medical Care/ Research $68,908,630
MAMOE $3,800,000
Subtotal VHA $72,708,630
General Operating Expenses (GOE):
Veteraris Benefits Administration (VBA) $43,037,000
Includes overtime to reduce backlog ($1,386,000)
General Administration $9,065,178
Includes overtime at Austin Finance Ctr ($62,000)
Subtotal GOE $52,102,178
National Cemetery System: $2,119,000
Includes overtime due to backlog of headstones
and markers ($70,000)
Inspector General: $1,957,000
Total Payroll Costs $128,886,808
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Estimated Non-Payroll Costs
Veterans Health Administration (VHA):
Pre-paid tuition costs for furloughed employees $13,000
Cancellation penalty of field advisory group $500
Subtotal VHA $13,500
Veterans Benefits Administration (VBA):
Overhead fixed costs incurred during shutdown
$11,613,000
Board of Veterans' Appeals:
Travel for recalled Board members
$2,000
Human Resources and Administration (HRA):
Pre-paid tuition costs for furloughed employees
Recall EEO investigators in field
$2,065
$7,000
Subtotal HRA
$9,065
Office of Management:
Interest Penalties *
$170,000
Lost Discounts*
$122,000
Contract Cost - Recall
$8,300
Contract Deliverable Delay
$6,000
Travel for recalled staff
$2,000
Subtc
>tal Office of Management
Total Non-Payroll Costs
$308,300
$11,945,865
* These costs are borne by various appropriations and are only identified by the
Office of Management.
6. Please indicate the shutdowns' impact on programs funded through trust funds,
fees, carry over funds, or other revenues not tied to annual appropriations. Please
describe any changes made in implementing these programs during the December-
January shutdown.
Medical Care Cost Recovery Program. The Medical Care Cost Recovery Program
(MCCR) is a revolving fund with all associated program operation costs provided from
funds collected. As such, all MCCR funded employees were determined to be excepted
fi-om furlough. Because of this the shutdowns had little impact on the MCCR program
460
Veterans Canteen Service. The Veterans Canteen Service (VCS) was created by
Congress in 1946 to provide articles of merchandise and services essential to the comfort
and well being of veterans who receive care and treatment at Department facilities. All
expenses associated with the operation of VCS activities (such as salaries, equipment cost,
utilities, etc.) are paid for fi-om revenues generated by the sale of goods and services.
VCS operates retail stores, food courts, vending programs and service department
activities (dry cleaning, photo developing, barber shops, etc.) in every VA medical center
in the system. All of the income generated by VCS activities in excess of operating
expenses is returned to the VA medical centers with the goal of improving patient care.
The shutdowns had a significant impact on VCS activities. Faced with the prospect of a
payless payday, employees in VA medical centers curtailed buying to only essential
purchases. Coming as it did, just ten days before Christmas, the second shutdown had an
especially negative impact on what is normally a busy selling period in the retail industry.
By comparing average daily sales figures for the shutdown period with similar sales
information for the three month period preceding the shutdown, it is possible to produce a
reasonably accurate estimate of the impact on sales. The average daily sales decline has
been calculated to be $46,500 or a total sales loss of $697,000 for the fifteen day
shutdown.
In response to the shutdown, the VCS implemented a program designed to assist VA
employees. When VA employees did not receive a full paycheck in early January, VCS
initiated "OPERATION PANTRY." This program was developed to ensure that
employees would be able to buy basic grocery items. Canteens were authorized to stock
basic grocery items (which are not normally carried), and sell those items to employees in
exchange for postdated checks.
Research and Development. The Research and Development program in the Veterans
Health Administration receives no support from trust funds or fees. Carry over funds
from a two-year appropriation were used to maintain medical center research operations
for two of the three weeks in the December- January shutdown. After these funds were
depleted, medical centers had to furlough research employees exclusive of those
designated as "excepted." Excepted employees continued to perform such functions as
the protection of government property, care of laboratory animals, and maintenance of cell
cultures. The interruption of routine research will extend completion dates for the
affected projects in most cases. Research programs fijnded from extra- VA sources (both
federal appropriations and non-federal funds) were not affected by the shutdown.
Office of Acquisition and Materiel Management (Supply Fund) The Supply Fund is
a revolving fund which VA health care facilities may use to procure medical supplies and
equipment on a reimbursable basis. Although Supply Fund employees were not
furloughed themselves, the furlough of other staff who were not available to participate in
various activities resulted in the following:
• There was a reduction in the number of purchase orders issued electronically.
461
• The testing and implementation of various automated systems designed to improve the
efficiency of procurement activities was delayed.
• There were delays in vendor payments.
• Standardization actions on selected medical products were delayed.
• National blanket purchase agreements impacting Nuclear Medicine, Dental and
possibly Bio-Medical Engineering services at VA medical centers may be delayed
• Supply Fund revenues were reduced due to reduced shipments of x-ray film and fewer
requests for computer upgrades, x-ray inspections, etc.
Insurance and Loan Guaranty Programs. Initially, employees who process claims for
accounts administered by the Veterans Benefits Administration were fiirioughed regardless
of the fijnding source. Subsequent clarification of shutdown guidance, however, permitted
VA to except employees needed to obligate funds in programs with existing obligation
authority. Based on this guidance, VA's General Counsel determined that because VA's
life insurance programs are funded through either trust funds, trust revolving funds or
public enterprise revolving fund accounts, the processing of insurance claims and the
payment of insurance awards could resume. In addition, because VA has permanent
indefinite authority to pay obligations of the Liquidating and Financing Accounts of the
Loan Guaranty Revolving Fund and the Guaranteed and Indemnity Fund, VA could also
resume administering those functions. Accordingly, 200 insurance employees were
recalled January 3, 1996 and 400 loan guaranty employees were recalled January 5, 1996,
in order to process appropriate activities of those programs.
Federal Supply Schedule Contract Audits. The Office of Inspector General (OIG)
conducts Federal Supply Schedule (FSS) contract audit and advisory services and reviews
of contractor compliance with drug pricing provisions of PL. 100-585 These activities
are funded through a reimbursable arrangement with the VA's Supply Fund The Supply
Fund is a revolving fiind and is not funded by direct appropriations. During the
shutdowns, OIG staflF(17 FTE) engaged in these audit and review activities continued to
work. Operational changes were not required.
Office of Financial Management. VA's Office of Financial Management noted that in
general, operations of trust and revolving funds and excepted activities suffered from the
lack of support typically provided by fiirioughed employees. For example, the
establishment of new accounting codes to support field fiscal activities was completely
shut down, preventing the timely and accurate recording of fiscal information; payroll
operations did not receive adequate guidance, resulting in reprocessing of payroll data;
and meetings between fiirioughed and excepted or funded employees were canceled,
resulting in delays in needed site visits, system enhancements, and other improvements.
462
11. The President decided to call 1700 VA field stafT back to work to process new
VA claims—even though the agency was not going to pay benefits because veterans'
benefits are in an annual appropriations stream, rather than indefinite or multi-
year appropriations. Why should you recall intake workers to sign up new
beneficiaries that you recognize you can't pay?
Based on the below legal rationale, the Department of Justice opined that VA could call in
employees to date applications for benefits and appeals, since a VA claimant may have a
property right in the underlying benefit from the time an application
is received. VA's failure to preserve the effective date of receiving a claim might result in
a partial loss of a benefit, resulting in the deprivation of a property right.
In opinions of April 25, 1980, and October 16, 1995, which analyzed the provisions of the
Antideficiency Act (31 U.S.C. §§1341 and 1342), the Attorney General of the United
States elaborated on the various exceptions in the Antideficiency Act that permit some
continuing government functions. One example is the "necessary implication" exception
which allows agencies to incur obligations in advance of appropriations for the
administration of benefit payments under entitlement programs to the extent that funds are
available. We agree with the statement in question 1 1 that funds to pay VA benefits were
not available, and therefore, VA was not authorized to bring in additional employees to
actually pay benefits.
However, the basis for recalling these employees was the result of an oral opinion given by
the Department of Justice in a conference call with VA officials during the lapse of
funding in November of 1995. The opinion was based on the Department
of Justice's interpretation of the language in section 1342, in which the Federal
government is precluded from employing personal services "except for emergencies
involving the safety of human life or the protection of property." Relying on the principles
of due process and an old decision of the Comptroller of the Treasury, Comptroller
Tracewell to the Postmaster. 9 Comp. Dec. 182 (1902), the Department of Justice
concluded that the "protection of property" contemplated by section 1 342 extends beyond
property owned by the Federal government and includes property in which the
government has an immediate interest or has some duty to perform in connection with the
property.
VA requested a written confirmation of the oral opinion. Please find enclosed a copy of
the March 15, 1996, Department of Justice opinion.
12. During testimony the Subcommittee heard several examples of backlogs that
would accumulate for each day of a potential shutdown. Please provide the
Subcommittee with an inventory of any backlogs that your Department associates
with the shutdowns. In light of OPM's January 17, 1996, guidance to restore
annual leave, please provide your management plan to reconcile the accumulated
leave and the workload backlogs attributable to furloughs.
463
Veterans Health Administration (VHA). Although direct health care services to
veterans were continued during the shutdowns, most employees in VHA headquarters
were furloughed. As a result, the following delays and backlogs were experienced
• CD-ROM Equipment Purchase and Installation Project: 4 weeks delay. This project
allows for the elimination of paper directives and forms throughout VHA via use of
CD-ROM.
• DHCP Software Development for 10-1 OT: 4 week delay. This project wall allow for
a computerized Form 10-lOT, Application for Medical Care.
• Resource Based Relative Value Scale Software Development: 3 weeks delay. This
project allows VA to utilize the Health Care Financing Administration (HCFA)
payment schedule for private outpatient care under VA auspices
• Centralization of Fee Basis Payment Process: 4 weeks delay This project will allow
for all VA Fee Basis care payments to be processed centrally at the CHAMPVA
center.
• 1996 "Means Test" Level Implementation: 2 weeks delay Provides necessary
financial information necessary to determine a nonservice connected veteran's
category of care.
• HCFA Price Implementation: 4 weeks delay. Provides computerized financial
information for determining billing rates for private inpatient care under VA auspices.
• rVC Equipment Purchase (National Buy RFP): 4 weeks delay. Provides new VA
Patient Identification with demographic and photographic information.
During the November 1995 shutdown, activities of the Health Administration Center,
which processes claims and requests to authorize or reimburse for health care services,
were also impacted. This included processing applications for CHAMPVA and Foreign
Medical Care benefits, processing of beneficiary and vendor reimbursement claims,
development of appeal cases associated with those benefit programs, and other initiatives
to promote efficiency and contain administrative costs of providing health care. During
the course of the fijrlough, approximately 240 applications for benefits, 12,000 claims for
reimbursement, and 540 appeal cases were received and added to the processing inventory
that was pending at the onset of the furiough. In addition, 905 written inquiries were
received and added to pending inventory and 3, 160 telephonic inquiries were attempted
but unanswered. Although most HAC operations were continued during the second
shutdown, the absence of appropriations caused suspension of disbursements for an
estimated 38,000 claims totaling over S5.8 million. The situation created an additional
burden on beneficiaries, and generated an increase of over 120 calls per day.
464
Veterans Benefits Administration (VBA). The following is a summary of the impact of
the furloughs on workload in the Veterans Benefits Administration.
About 1.3 million pieces of mail were received in VA regional offices during the
shutdowns. Prior to the November shutdown, the total compensation and pension claims
pending were 397,000. That total peaked at approximately 420,000 af^er the second
shutdown.
Before the first shutdown, VBA had reduced the time for decisions on original claims for
compensation to about 146 days. As of January 31, 1996, this number had increased to
152 days. Processing time is expected to continue increasing for the next several months
and then begin to decline again to about 140 days for the month of September. However,
the cumulative impact of these trends will increase the cumulative days pending to around
150 days for FY 1996, an increase of 10 days over the original estimate.
In mid-November, there were 90,000 education claims pending. As of the end of January,
there were 136,000 claims pending. WTiile the shutdovms certainly contributed to the
increase, they were not its exclusive cause. The volume of education claims fluctuates in
correlation to the schedule of school semesters. Consequently, January is typically a large
volume month for school registrations. Payments to beneficiaries with an education claim
pending are currently being processed within 35 days for an original claim and 25 days for
a reopened claim.
The increased workload in home loan guarantees and appraisals, caused by the shutdown,
has been processed and the pending is back to a normal level.
The 8,000 Vocational Rehabilitation Counseling appointments that were canceled because
of the shutdown are being rescheduled. We do not have an estimate for completing all
vocational rehabilitation counseling rescheduling at this time.
National Cemetery System (NCS). The following is a summary of backlogs experienced
in National Cemetery System activities due to the shutdowns. As resources permit, NCS
will approve overtime to remedy backlogs created by the shutdowns.
• Approximately 27,000 headstone and marker orders were not processed during the
furloughs.
• Approximately 16,000 hours normally devoted to the installation of headstones and
markers were lost during the furloughs.
• Approximately 26,000 hours per month are devoted to preventive maintenance of
equipment and buildings, grounds and graves maintenance, seeding and fertilizing,
establishing turf areas, and renovation and repair caused by seasonal storms and other
factors; it is unlikely that many of these lost hours can be made up during this fiscal
year.
465
Prior to the shutdowns, adequate contract provisions were in place to provide accurate
and timely delivery of headstones and markers. The shutdowns prevented processing of
orders and the payment of contractors for delivery of headstones and markers. This left
many contractors with no alternative but to terminate employees and close down major
production lines. Now that the shutdowns are over, many manufacturers are struggling to
recruit new employees skilled enough to meet the demands of the orders now being
placed. The shutdowns also prevented the development of necessary specifications to
post bids on the new upright granite headstones. This contract should have been awarded
by now, but due to the shutdowns is long overdue for distribution to potential bidders,
thus delaying manufacture, delivery and installation of these headstones.
NCS reports that families are concerned that graves have had only temporary markers for
a very long time; they are further disillusioned when they learn that the delivery of the
permanent headstone or marker is still months away. The volume of telephone calls to the
Office of Memorial Programs "800" number are at an all-time high and little satisfaction
can be offered to callers at this time. Dissatisfaction with service delivery has resulted in
increased correspondence, including Congressional correspondence, and the need to
devote many more hours than is normal to addressing concerns caused by the shutdowns.
Board of Veterans' Appeals (BVA). The following is a summary of the impact of the
fijrloughs on workload in the Board of Veterans' Appeals.
The most notable effect of the shutdowns on the operations of the BVA is the loss of
decisions that otherwise would have been made during the period of the furloughs. BVA
estimates that approximately 2,400 VA appellate decisions were not made that would have
been made during the two shutdown periods. This loss incrementally adds to VA's
current appellate backlog and to the time all VA appellants must wait for decisions on
currently pending appeals. BVA originally estimated that it would be able to produce a
total of 35,200 appellate decisions during FY 1996, which would enable the Board to
achieve an end-of-year response time of around 640 days. Decision-making performance
losses associated with the shutdown reduced expected FY 1996 BVA production by
approximately 2,400 decisions.
Eighteen appellate hearings scheduled to be conducted in the BVA's Washington, DC,
offices during the period of the shutdowns had to be canceled. These hearings must be
rescheduled for some future date, at the option of the appellants, thus delaying final
decisions on the related appeals. Two VBA Board members were conducting field
hearings in Chicago at the time of the first shutdown announcement. They were recalled
to their Washington, DC, duty station, and 52 appellate hearings scheduled for that week
were canceled. In addition, 86 hearings scheduled to be conducted in Huntington, W^
and Roanoke, VA during the week of January 8-12 were canceled.
Office of the Inspector General (OIG). The major backlog in OIG workload that
accumulated during the shutdowns resulted from the Hotline staff not being available to
466
respond to calls and letters reporting fraud, waste and abuse in VA programs and
operations. During a normal 4-week period, the OIG Hotline would receive about 1 ,400
contacts. In addition, important OIG services provided to veterans and the general public,
the Department, and Congress were delayed. For example:
• Work was suspended on responding to 86 Freedom of Information Act (FOIA)
requests from the media, veterans and the general public for information in OIG
reports and files.
• All work was stopped on about 50 audits, 60 healthcare inspections, and 20 special
inquiries that were in process at the time of the fiirlough. Delays in completing this
work could increase the Department's vulnerability to fraud, waste and abuse in its
programs and operations.
• Work continued on only a few of the 350 active criminal investigations currently being
conducted, including drug trafficking. The collection of information needed to
successfully prosecute the subjects of these investigations was delayed. OIG reports
that while it may be possible to "catch up" and continue with these investigations,
some time sensitive information has been lost.
• Work was stopped on responding to 40 priority inquiries from members of Congress
Other Headquarters Activities. The following impacts were reported for other VA
headquarters activities as a result of the government shutdowns.
• With furlough of virtually the entire Office of Public Affairs, the Department's ability
to respond to national and local media and public inquiries and to disseminate
materials and information regarding the impact of the shutdowns and veterans' benefits
in general was severely restricted.
• Archival and news media monitoring operations were suspended, causing the loss of
materials used for historical and reference purposes.
• Development of products and events such as the Veterans' Benefits handbook and the
upcoming National Disabled Veterans Winter Sports Clinic were temporarily halted
• Responses to priority correspondence, including Congressional inquiries, and
development of critical management, budgetary and legislative reports, were delayed.
• The backlog of EEO investigations increased by approximately 175 cases.
• The Office of Security and Law Enforcement reported a backlog of 14 inspections as a
result of the shutdowns and a delay in one investigation. Two Basic Police Training
classes were canceled, resulting in a backlog of new police officers requiring training.
467
• Master contract negotiations with the American Federation of Government Employees
for a collective bargaining agreement covering 120,000 of the Department's
employees were delayed from January until March
• Advisory services were not available to VHA field stations as they conducted wage
surveys and analyzed data for new wage schedules for nurses as required under the
Nurse Pay Act. Through extraordinary staff efforts, virtually all schedules were
validated after return fi-om furlough in time for automated processing January 23,
1996.
• Delays were experienced in processing physician special pay actions and other pay
matters affecting employees.
• Development of new policy was delayed for critical matters such as staffing
adjustments for medical personnel.
• Backlogs were experienced in headquarters finance operations, including payroll
processing functions, vendor payments, processing of travel vouchers, and payments
to other Federal agencies. (Most backlogs have been or will be reduced to pre-
furlough levels through use of overtime, compensatory time, or planned process
improvements.)
• Delays in developing or enhancing major automated systems, such as the Financial
Management System and PAY-VA, as well as resolution of production and other
problems, were experienced.
• Other information resources management backlogs or delays were reported in such
areas as Freedom of Information Act/Privacy Act; Release of Names and Addresses;
Federal Register publications; telecommunications activities; and delegations of
authority.
Management Plan. VA offices reported that the Office of Personnel Management
guidance on restoration of annual leave to furloughed employees is not likely to present a
significant problem in resolving backlogs. Individual leave requests will be approved
judiciously, and consistent with operational requirements. Employees will have until the
end of 1998 to use the restored leave, which should provide sufficient opportunity to
schedule time off appropriately.
10
468
. '•;,. ^ U. S. Department of Justice
'^■' Office of Legal Counsel
Office of the Washmglnn. D C 20530
Depiily Assitttant Attorney General
March 15, 1996
Mary Lou Keener
General Counsel
Department of Veterans Affairs
Washington DC 20420
Dear Ms. Keener:
By letter of December 14, 1995 to Christopher H. Schroeder, then a Deputy Assistant
Attorney General in this office, you requested written confirmation of oral advice supplied
during the lapse of funding for the Department of Veterans Affairs that occurred in
November of 1995.
Specifically, the advice related to whether there was a legal basis to find that some
1700 employees of the Veterans Benefits Administration could continue working despite the
lapse in funding, because these employees were needed in order to accept benefits claims on
behalf of veterans. On the basis of the facts presented to us that the time of the oral advice,
and repeated subsequently in your letter, we concluded that there was. That continues to be
our conclusion.
The Antideficiency Act, 31 U.S.C. §§ 1341,1342, ("ADA") prohibits any officer or
employee of the United States from incurring obligations of any kind, including for personal
services, when an appropriation is lacking for those obligations, unless authorized by law.
31 U.S.C. 11341(a)(1)(B). One such exception to the general rule of the ADA that is
authorized by law permits an officer or employee of the United States to "employ personal
services" "for emergencies involving the safety of human life or the protection of property."
31 U.S.C. §1342. Pursuant to this emergency exception, departments such as the
Department of Veterans Affairs may lawfully obligate the United States to pay for the
services of employees whose work activities "involv[e] ... the protection of property." Id.
The general construction of the emergency exception was set forth in a 1981 opinion by
Attorney General Civiletti, and followed by all subsequent administrations. See "Authority
for the Continuance of Government Functions During a temporary Lapse in Appropriations,"
5 Op. O.L.C. 1, 7-11 (1981)
In determining the scope of the term "property" for purposes of the emergency
exception, both the executive branch and the Comptroller General have concluded that it
encompasses at least property owned by the United States itself, as well as private property
in which the United States "has an immediate interest or in connection with which it has
469
some duty to perfonn ' 9 Comp. Dec. 182. IS.*) (1902) (decision of the Comptroller of the
Tf«asury). In the cited decision, the Comptroller of the Treasury detennined that paying for
the services of an individual who gathered up mail scattered in a train wreck came within the
emergency exception. As the Comptroller General has put it, the emergency exception
extends to the protection of private property "for which the government has some •
responsibility." Principles of Federal Appropriations Law. 2d Edition. Vol. II, at 6-70
(1992).
Under the laws governing awards of certain veterans benefits, the date on which a
veteran files an application for such benefits establishes the date on which benefits begin to
accnie. See. e.g. . 38 U.S. C. §5 1 10(b)(3)(A) ("the effective date of an award of disability
pension to a veteran ... shall be the date of application or the date on which the veteran
became pennanently and totally disabled, if the veteran applies for a retroactive award within
one year from such date ..."). To the extent that Veterans Affairs offices are unable to
receive applications to establish the effective date of such benefits, veterans may not be able
to establish their eligibility and, as a result, may lose benefits to which they would otherwise
be entitled. On these facts, we concluded that the statutory scheme had charged the
Department of Veterans Affairs with the responsibility to receive applications for benefits in
a timely manner in order to protect such benefits as might otherwise be lost. Consequently,
employees who accept benefits claims in order to secure benefits for veterans are performing
functions "involving the protection of property" within the meaning of the emergency
exception to the ADA, and therefore employing their personal services is permissible under
the ADA.
Very truly yours,
H. Jefferson Powell
Deputy Assistant Attorney General
470
U.S. DEPARTMENT OF LABOR
DEPUTY SECRETARY OF LABOR
WASHINGTON, DC.
20210
December 29, 1995
The Honorable John L. Mica
Qiairman
Subcomniittee on Civil Service
House Government Reform and Oversi^t Committee
2157 Raybum House Office Building
Washingon D.C. 20515-6143
Dear Mr. Chairman:
This is a foUow-iq) to my letter of December 22, 1995, which acknowledged receipt of your
letter of Decemba 20, 1995, in which you requested information on attendance and leave
practices for the Depatment. As promised in my letter, today 1 am providing information
requested in items 2B, 3A, 3B, and 3D. I recognize that the enclosed information does not
completely respond to all the questions raised in your letto; however, I wanted to provide
the information which is now available. As 1 indicated in my prior letter, we are gathering
the remainder of the information.
Item2B
Enclosure I provides information, by agency, on the number of DOL staff that woriced during
the 1995 shutdown periods. The difference between the number of employees working
during the November 14 shutdown and the shutdown during the week of December 25 is
attributable to the historically reduced workload of the Department including the fact that
approximately 17 percent of employers are closed during this week.
Hems 3A, 3B, and 3D
During the November 1995 l^se in appropriations, annual leave was cancelled for DOL
employees. To the best of my knowledge, the circumstances and timing of prior lapses in
appropriations for the Department did not necessitate cancelling leave. At this time, no
determination has been niade about annual leave policies during the current shutdown.
Item 3A Pursuant to guidance provided by the Office of Personnel Management (Enclosure
n) regarding the November Iqjse in ^propriations, annual leave was cancelled for employees
who were furloughed due to lack of funds and for employees who were required to work
during the fiirlough.
471
Page 2
llemJB Each agency of the Department prepared a shutdown plan which specified activities
that could legally continue during the shutdown, thereby enabling agencies to identify which
employees would be placed in furlough status as well as those who would be working during
a lapse in appropriation. Based on these plans and the above noted 0PM guidance,
employees were advised by their supervisors that they were either flirloughed or required to
work during the shutdown period, and, accordingly, their leave was cancelled
Item 3D Leave that was cancelled can be rescheduled in accordance with applicable
personnel rules.
Remaining Information
We should be able to provide you with the information you requested in Item 1 in
approximately one week, but the information responses for Items 2A, 3C and 3E will take
substantially longer. Because of the decentralizal location of the records for the information
you requested, responding completely is a very time intensive efiFort and we project that
gathering the information will take at least three to four weeks. This effort is further
complicated by the current suspension of operations.
We will endeavor to provide the remaining information to the Subcommittee by the end of
January, 19%, and will work with Garry Ewing of the Subcommittee staff should we
encounter any difficulties in responding. I want to assure you that we are making every
efiFort to respwnd to your request.
Thomas P. Glynn
Enclosures
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473
U.S. DEPARTMENT OF LABOR
DEPUTY SECRETARY OF LABOR
WASHINGTON, DC.
20210
AUG 21956
The Honorable John L. Mica
Qiairman
Subcommittee on Civil Service
House Government Reform and Oversigjit Committee
2157 Raybum House Office Building
Washington, D.C. 20515-6143
Dear Mr. Chairman:
This is a follow-up to my letter of May 3, 1996, which provided you an interim
response of your letter dated January 18, 1996 in which you requested information on the
shutdown practices of the Department of Labor. As promised in my letter, today 1 am
providing responses to all the remaining questions that we were unable to provide earlier.
Inquiiy 3: Please provide a report, by agency and by category, of all amounts and
forms of premium pay (overtime, ni^t differential, weekend differential, etc.) that was paid
to agency employees who were fiirlougjied during each shutdown.
Response 3: Guidance from the Office of Personnel Management, see attachment 1.
allowed furlou^ed employees to receive premium pay, provided these employees were
regularly scheduled to perform work that would entitle them to such pay. Attachments II and
in display the estimated amount of premium pay that was paid to agency employees wtio
were also flirlou^ed at any time during the shutdowns. These amounts are estimated because
the Department's payroll system allows for the information to be retrieved only by pay period,
a 2 week time period, and not for the actual dates of the shutdown. The information received
from the payroll system was then estimated in order to provide the estimated amounts of
premium pay.
Inquiiy 4: Please provide a report, by agency, of the numbers of furlou^ed
employees who filed for unemployment compensation during the shutdowns and the amounts
paid to agency employees. Please describe any costs that will be incurred by your
Depjartment as a result of efforts to collect reimbursement of these payments after routine pay
is restored.
Response 4: The Department estimates that over 100,000 initial claims were filed by
furlou^ed employees during the shutdowns, with 34 States paying over 12,000 of these
claims for an estimated total of $2.2 million in benefits; howevo-, the States' reports do not
include the initial claims data by Federal agency, nor do they separately report benefit
payment data for furlou^ed enployees. Therefore, the initial claims and amounts paid
figures are aggregates for all Federal agencies.
474
The States act as agents for the Federal government in operating the Unemployment
Compensation for ex-Federal Employees (UCFE) program. Federal law provides that UCFE
benefits will be paid to Federal employees by the State in the same amount, on the same
terms, and subject to the same conditions that apply to individuals filing unemployment
compensation claims under provisions of the applicable State unemployment compensation
law. Each State that paid UCFE benefits to fiirlou^ed Federal employees determined that
these payments were overpayments under the provisions of its State law, since the fiirloughed
employees were retroactively paid their salaries for the furlough jjeriod. States receive annual
federal grants under Title III of the Social Security Act to administer the program. The
additional cost to collect overpayments will have to be absorbed under those grants.
The Department's roles are primarily restricted to oversi^t of the State programs and
managing the Federal Employees Compensation (FEC) Account. The Department collects
information quarterly fi-om the States on the amount of UCFE benefits paid, by Federal
agency. The Department then bills the Federal agencies for the amounts they owe the FEC
Account, fixjm \vbich the States draw money to pay the UCFE benefits.
Inquiiy 5: Please estimate the total costs to your agency associated with the
interruption of operations during November and December- January. Please provide
descriptions of any unusual costs imposed on the agency or other unanticipated consequences
of these interruptions of operations. Please provide, too, an estimate of any savings
associated with these interruptions.
Response 5: The cost associated with the November shutdown and the December-
January shutdown was approximately $7.3 million and $29.4 million, respectively, paid to
DOL employees who did not work during those periods. If there were any unusual costs or
any savings from these shutdowns they were incidental.
Inquiiy 9: Please provide estimates of the numbers of employees and the amount of
accrued annual leave that will be restored by your Department as a result of employees
required to work during the second shutdown. Please describe any other effects that the
second shutdown will have on the administration of employees' leave programs.
Response 9: A review of the Department's time and attendance records indicate that
over 6,000 employees forfeited some amount of annual leave. Over 284,000 hours of
forfeited annual leave, valued at $7.8 million, was restored to eligible employees consistent
with the guidance issued by the Office of Personnel Management (0PM).
Once a Continuing Resolution was passed by the Congress and signed by the President
on January 6, 1996, we submitted an estimated payroll to Treasury so that we could
immediately pay our employees to help minimi2e the financial hardship they may have
experienced as a result of the shutdown. Since this estimated payroll run did not originally
cqjture leave taken on the first day of the shutdown, we developed and implemented a
timekeeping mechanism to ensure that those individuals on leave status on the first day of the
shutdown were so charged.
475
I appreciate the opportunity to submit my final response to your inquiry. Should you
have any questions about this letter, please contact Mary Ann Richardson, Deputy Assistant
Secretary for Congressional and Intergovernmental Affairs, at (202) 219-6141.
Enclosures
476
ATTACHMENT I ^
Nove»±>er 21, 1995
MEMORANDUM FOR DIRECTORS OF PBRflONMBL (CPM-95-8)
FROM: AliLAN D. HEUBRMAH
ASSOCIATE DIRECTOR
FOR HTJMAM RESOURCES SYSTEMS
SUBJECT: Pay and Leav« Treatment of Employees Affected by the
Lapse in Appropriations; EHDcumentation of Personnel
Actions
Congress has passed and the President has signed legislation
providing as follows:
Any Federal employees furloughed as a result of a lapse
in appropriations, if any, after midnight November 13,
1995, until the enactment of this Act shall be
compensated at their standard rate of compensation for
the period during which there was a lapse in
appropriations .
The purpose of this legislation is to make Federal employees
whole by ensuring that they receive their Jlstandard rate of
compensations for the entire period of the lapse in
appropriations. With regard to persons who wouid have been in a
previously approved paid leave status if the lapse in
appropriations had not occurred, the policy set forth below is
consistent with the instructions provided to agencies on -November
17, 1995. These instructions were based on the premise that,
during the lapse in appropriations, employees must be (1) at work
performing excepted activities, or (2) furloughed, and that they
cannot therefore be in a paid leave status during tha't period.
Such employees must receive the same pay they would have received
for an equivalent period of work performed for the agency,
without regard to any previously approved paid leave.
The following guidance has been prepared by the Office of
Personnel Management in consultation with the Office of
Management and Budget. As used below, the term ^excepted
employees* refers to employees who were excepted from a furlough
because they were performing functions related to national
security, protection of life or property, or the orderly
suspension of agency operations.
477
For periods of time during which employees were furloughed, they
must receive the same pay they would have received for an
equivalent amount of work performed for the agency. Therefore —
o Employees are entitled to receive their rate of basic pay
for all periods of time during which they would have been in
a pay status but for the furlough;
o Employees who were regularly scheduled to perform overtime
work or to perform work at night or during a period for
which any other form of premium pay would otherwise be
payable are entitled to receive overtime pay, night pay, or
otlieir premium pay as if the work had actually been
performed;
o The hours of duty during which employees were furloughed
(including regularly scheduled overtime hours and standby
duty) must be considered Shours of work* for pay
administration purposes under the Fair Labor Standards Act;
and
o Allowances, differentials, and other payments must be paid
as if the employee actually continued to work.
Excused Absences and Charges to Leave
o Except as provided below, absences resulting from the
furlough of employees during the lapse in appropriations
must be recorded as excused absences and may not be charged
to any form of paid leave (i.e., annual leave, sick leave,
or other paid leave), compensatory time off, or credit hours
under a flexible work schedule.
o In the case of employees who were on approved leave without
pay during the lapse in appropriations, absences during the
lapse in appropriations must continue to be charged to leave
without pay for the duration of the period of approved leave
without pay .
o In the case of employees who were on approved paid leave (or
compensatory time off or credit hours) on November 14, leave
(or compensatory time off or credit hours) should be charged
only for the approximate period of time from the beginning
of each individual employee's normal workday until the time
other similarly situated employees departed from work after
receiving furlough notices. The remaining period of time in
the employee's regularly scheduled tour of duty must be
recorded as an excused absence.
40-190 97 - 16
478
fOae or LOSel Annual T.«»«-ga
o Employees and agencies should make every effort to schedule,
within the time limits specified by regulation, any
additional iluse or losei annual leave now made available to
a furloughed employee because previously approved annual
leave was canceled during the lapse in appropriations. If,
however, the employee is unable to reschedule such annual
leave and it is forfeited at the end of the leave year, the
amount of annual leave that was canceled during the lapse in
appropriations may be considered for restoration under
5 CFR 630.308.
Alternative Work Schedules (AWS)
o Each agency should have a policy specifying when flexible
work schedules must be established and may be changed.
Normally, such schedules are established in advance of the
pay period involved. Under such a policy, an AWS nonworkday
scheduled to occur during a lapse in appropriations should
not be changed after the pay period begins.
Documentation of Personnel Actions
o Agencies should not process SF 50 's to docmnent a furlough
resulting from the lapse in appropriations on November 14 ,
and SF 50 's that were processed must be canceled using
Nature of Action Code SOOl.i Do not record the furlough
with any document designated for long-term filing in the
Official Personnel Folder.
o Agencies need not provide a furlough notice to an employee
who did not receive a notice during the lapse in
appropriations.
pg« Cpntag.ts ■,.
o Questions on pay and leave entitlements may be directed to
the Office of Compensation Policy on (202) 606-2858.
o Questions on furlough procedures may be directed to the
Office of Labor Relations and Workforce Performance on (202)
606-2920.
o Questions on the documentation of personnel actions may be
directed to the Office of Workforce Information (202) 606-
4415.
479
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481
DEPARTMENT OF THE TREASURY
WASHINGTON, D.C.
ASSISTANT SECRETARY
M 0 4 m
The Honorable John L. Mica
Chairman
Subcommittee on Civil Service
Committee on Government Reform and Oversight
U.S. House of Representatives
Washington DC 20515
Dear Mr. Chairman:
This responds to your letter of January 18, 1996 requesting additional information related to
Treasury's shutdown process and procedures. I have enclosed our responses to your
questions.
Thank you for your inquiry and the opportunity to testify before your subcommittee. I hope
the enclosed helps to explain further the complexities associated with the unfortunate situation
of a government shutdown.
Sincerely,
jeorge Mufioz /
Assistant Secretary (Management) and CFO
482
ADDITIONAL QUESTIONS AND ANSWERS
From December 6, 1995 Hearing "The Government Shutdown: What's Essential"
(Subcommittee on Civil Service)
Ql. Please describe any changes in planning, procedures, and operations that your
Department made between the November and the December-January shutdowns. Please
submit any revisions and/or supplements to your Department's shutdown plans. In light of
the substantial change between shutdown numbers reported in the second shutdown, what
changes are contemplated regarding the Department's definition of emergency functions?
Please provide the new legal reasoning that supports this change from previous shutdown
plans.
Al. The Department of the Treasury's Appropriation Act (P.L. 104-52) was signed
November 19, 1995 and provided funds through September 30, 1996. As a result, the
Treasury did not shutdown operations during December-January. However, the Department
would have reviewed and revised bureau shutdown plans in the event that its appropriation
had not been signed; based on additional bureau information, consistent with the Attorney
General's exceptions. In most cases, it's assumed that plan adjustments would have been as
a result of an additional review of functions necessary for a short period (a day or two)
versus a longer shutdown period.
The bureaus were notified that the shutdown plans were flexible documents, and that fine
tuning their plans to fit the particular circumstances of the shutdown, including length was
normal. The Department emphasized the importance of a phased plan that addressed both
short-term versus long-term shutdowns. Some bureaus, particularly IRS, set forth their
intent to review operations and provide adjustments if a shutdown lasted longer than a week.
Q2. Please submit the numbers of persons furloughed in each agency during the
two shutdowns. For each function which was subject to furlough during the first shutdown,
but exempted from furlough during the second shutdown, please provide policy and legal
reasons supporting the decision to change the status of the functions.
A2. The Treasury Department was not required to shutdown operations during
December-January. During the November 14 - 19 shutdown the Treasury furioughed
approximately 108,500 out of 153,700 employees.
Q3. Please provide a report, by agency and by category, of all amounts and forms
of premium pay (overtime, night differential, weekend differential, etc.) that was paid to
agency employees who were furioughed during each shutdown.
483
A3.
Amounts paid by Treasury Bureaus to furloughed employees for the
November 14 - 19 shutdown follow:
Bureau
Overtime
Sunday
Differential
Night
Differential
Law Enforcement
Availability Pay
Internal Revenue
Service
$0
$3,321
$164,728
$0
Alcohol, Tobacco,
and Firearms
0
0
0
29,213
Inspector General
0
0
0
6,000
Secret Service
307
0
20
1,092
Q4. Please provide a report, by agency, of the numbers of furloughed employees
who filed for unemployment compensation during the shutdowns and the amounts paid to
agency employees. Please describe any costs that will be incurred by your Department as a
result of efforts to collect reimbursement of these payments after routine pay is restored.
A4. The November 15th - 19th furlough was not long enough for employees to
qualify for unemployment compensation. With the exception of IRS, Treasury's bureaus
have reported that there is no record of anyone tiling for unemployment compensation.
Because of the nature of the IRS workforce (seasonal employees), IRS will not be provided
unemployment information until the Department of Labor's report is available. The first
quarter report for 1995 becomes available in May 1996. This report provides a cumulative
amount of compensation paid from October 1, 1995 through December 31, 1995 and is not
broken down by pay period. The report provides names and SSNs but does not differentiate
between individuals who received unemployment because of the government shutdown from
those who were seasonal employees released on furlough.
Q5. Please estimate the total costs to your agency associated with the interruption
of operations during November and December-January. Please provide descriptions of any
unusual costs imposed on the agency or other unanticipated consequences of these
interruptions of operations. Please provide, too, an estimate of any savings associated with
these interruptions.
A5. Estimated costs associated with the Department's shutdown of operations for
the period November 15th - 19th are as follows:
• $1,633,700 - Costs of Developing Contingency/Shutdown Plans and
Designating and Notifying Employees.
484
Amount includes the extraordinary costs associated with planning for and
implementing the shutdown, such as shutdown-related planning meetings and
briefings, costs of shutdown plan development, review and approval, providing
information and guidance to employees related to shutdown, and any
operational costs which would not have occurred but for shutdown.
• $66,839,100 - Salary & Benefits for those employees furloughed for
scheduled work hours and not worked.
• $3,600 -- Lost Discounts/Payment Penalties.
• $300,000,000 - 400,000,000 -- Lost Revenue.
Using a conservative methodology, we estimate that furloughs resulted in a
daily loss of between $75M and SIOOM through lack of enforcement actions
by the IRS, or between $300M and $400M during the four-day furlough
period. The IRS collects approximately $286 billion in taxes through direct
enforcement efforts. These taxes are not collected by voluntary compliance of
the tax laws by taxpayers; IRS staff is needed to enforce and ensure collection.
Q6. Please indicate the shutdowns' impact on programs funded through trust funds,
fees, carry over funds, or other revenues not tied to annual appropriations. Please describe
any changes made in implementing these programs during the December-January shutdown.
A6. Several bureaus were exempted from shutdown based on alternate funding
sources other than annual appropriations. These include the Office of the Comptroller of the
Currency; the Office of Thrift Supervision, the Bureau of Engraving and Printing, and the
Bureau of the Public Debt. The Federal Law Enforcement Training Center has been
appropriated some funds for FY 1996 that were available to be used to continue operations.
485
Q7. Please provide staffing levels for all public affairs offices in the Department
during the shutdown.
A7. See chart below:
DEPARTMENT OF THE TREASURY
PUBLIC AFFAIRS STAFFING
During Furlough Period
Fiscal Year 1996
ganization Name
Departmental Offices
Treasury Forfeiture Fund
Offrce of Inspector General
Federal Law Enforcement Training Center..
Financial Management Service
Alcotiol, Tobacco & Firearms
U.S. Customs Service
Financial Crimes Enforcement Network
United States Mint
Bureau of the Public Debt
Bureau of Engraving and Printing
Internal Revenue Service
U.S. Secret Service
Comptroller of the Currency
Office of Thrift Supervision
NUMBER OF EMPLOYEES
Furloughed
■■|
15
0
0
3
3
7
19
7
3
3
12
300
14
6
6
TOTAL, PUBLIC AFFAIRS.
398
11
0
0
0
1
6
19
4
2
0
0
298
0
0
0
341
Numbers are approximate. Treasury bureaus/organizations do not necessarily have separate
Public Affairs offices The Public Affairs function is often combined with Legislative/Congress-
ional/Media and correspondence functions
486
Q8. Please provide a report of the number and furlough status of Presidential
Appointees, noncareer Senior Executive Service personnel, and Schedule C appointees, by
agency, during each shutdown.
A8. The following reflects the number and furlough status, for those employees
within Treasury operations, that were subject to a shutdown during the November 15th - 19th
time frame.
Political
Appointees
SES
Schedule C
Total Number
17
38
42
Total Furloughed
0
16
28
Q9. Please provide estimates of the numbers of employees and the amount of
accrued annual leave that will be restored by your Department as a result of employees
required to work during the second shutdown. Please describe any other effects that the
second shutdown will have on the administration of employees' leave programs.
A9. None. The Department of the Treasury did not shutdown operations during
December - January.
QIO. Please explain the "partially excepted" category used in the Treasury
Department's plan.
AlO. The category "partially excepted" referred to functional components of
Treasury as opposed to the status of individual employees. A number of employees working
in a "partially excepted" organization were classified as "excepted," while a majority in the
same organization were in fact furloughed. For example, organizational components such as
Personnel, General Counsel, Information Systems, were classified in the "partially excepted"
category, and certain employees would be "excepted" based on their actual workload
requirements.
Qll. What revisions or modifications did you require in plans submitted to your
office by the Treasury Department's component agencies?
All . The Department continually fme tuned the bureau shutdown plans before the
shutdown based on additional bureau information, but did so consistent with the Attorney
General (AG) exceptions. After the shutdown occurred there was some minor adjustments
made, primarily for Departmental Offices (DO), that were consistent with the AG opinion.
In all cases, these adjustments were due to an additional review of functions necessary for a
short period (a day or two) versus a longer shutdown period.
487
Each bureau monitored their requirements and when a change was necessary brought
employees back to work. Justifications to do so were sent to the Department for review and
approval.
Q12. The plans of the IRS and Departmental offices contained notes that they either
couldn't get down to 5% or retained employees would be around 5%. Did you establish a
standard to shutdown in the vicinity of 95% of non-law enforcement or extraordinarily
funded functions? What targets did you establish for component agencies?
A12. The Department did not establish standards or targets for Treasury bureaus to
follow as to the number of "excepted" or "nonexcepted" employees that a bureau may or
may not have. The Department's previous shutdown guidance had been issued in 1991 and
contained a requirement to justify both legally and programmatically those positions to be
retained whenever the number (not otherwise exempt because funding was available) retained
exceeded 5% the number of employees on board at the beginning of the shutdown.
The requirement was to ensure sufficient justification was provided to the Department for
review and approval of the shutdown plans. Thorough documentation on all "excepted"
functions was stressed. The Department wanted to ensure that plans clearly documented each
"excepted" function.
Treasury's "excepted" activities were justified based on one or more of the following:
► those activities that have a continuing source of funding;
►• those activities that are expressly authorized to continue even without funding;
► those activities that are authorized by necessary implication of, e.g., the need to
support, activities that continue under another authority, such as the FMS's
disbursement of benefit payments for the Social Security program, which has
continuing funding;
*■ those activities covered by limited authority to employ (although not pay for)
personal services for activities to the extent necessary to avoid "emergencies
involving the safety of human life or the protection of property;"
► those activities that are necessary to the discharge of the President's constitutional
duties (although this category must be construed narrowly); and
► functions necessary for a short period in order to ensure an orderly shutdown of
operations.
"Excepted" activities were based on actual workload requirements. It was anticipated that with the
passage of time, performance of activities that were "excepted" initially would no longer be
required. Also, activities initially shut down may become "excepted" because of changed
circumstances. In either case, only staff necessary to perform activities determined to be
"excepted" at that time were to report to duty.
Q13. During testimony the Subcommittee heard several examples of backlogs that would
accumulate for each day of a potential shutdown. Please provide the Subcommittee with an
inventory of the workload backlogs that your Department associates with the shutdowns. In light
of OPM's January 17, 1996 guidance to restore all annual leave, please provide your management
plan for reconciling the accumulated leave and the workload backlogs that resulted from the
488
7
furlough periods.
A13. Examples of workload backlogs and impacts of the November 15th - 19th shutdown
follow:
Alcohol. Tobacco and Firearms:
* 8,000 special occupational tax returns not processed
* 720 excise tax returns not processed
* 200 letter responses not processed
* 85 original alcohol/tobacco applications and amended application not processed
* 85 alcohol/tobacco tax claims not processed
* 20 variance requests not processed
* 296 firearms/explosives license applications not processed
* 1,000 alcohol label/formula approvals not processed
* 171 Firearms import permits applications not processed
* 249 Firearms import documents not processed
* 900 National Firearms Act registrations went unprocessed
* Delays in regulatory field inspections of alcohol and tobacco excise taxpayers and
firearms and explosives dealers.
Internal Revenue Service:
* 48,000 taxpayer telephone calls to Area Distribution Centers went unanswered,
delaying transmission of tax-related items; tax practitioners received their bulletins
at least one week late; printing contractor schedules were disrupted.
* 79,000 fewer 1040s were processed, of which 46,000 involved refunds; each center
reported an increase in the number and age of adjustments inventories; about 25,000
TeleTin calls requesting taxpayer identification numbers were not answered.
* 864 appeals cases were not resolved, prolonging the period of uncertainty for
taxpayers who filed appeals and possibly increased their tax bills as interest
continued to accumulate during the shutdown period.
* Delays in responding to taxpayer inquiries contributed to a backlog in other work
such as issuing private letter rulings, technical advice memoranda and other
correspondence. Delays were also experienced in responding to Congressional
requests for information; providing legal opinions affecting legislative proposals;
responding to FOIA requests and pending investigations; tax and general litigation
cases not closed; and in providing counsel to other areas and activities of the
Internal Revenue Service (e.g. Tax System Modernization). Taxpayers did not
receive advice requested through formal conferences or by phone; one regulatory
hearing was postponed; and approvals were delayed in about three Criminal
Investigator undercover investigations.
* Approximately 66,000 Automated Collected System (ACS) incoming calls went
unanswered; taxpayers and third parties were unable to reach ACS employee
assistors. Additionally, 42,000 outgoing ACS calls were not made, resulting in
additional interest due.
•' Walk-in Assistance: 60,000 walk-ins were unable to obtain assistance; 17,000 were
489
unable to get forms/publications at walk-in locations. Requests for assistance during
this period are traditionally more account-related, and it may be concluded that
some taxpayers could incur interest/penalty costs due to this occurrence.
Treasury-wide:
• Vendors performing services under contract were affected. In one instant, an
equipment vendor called several times, angered and confused about whether
payments would be made. The vendor was not reassured when the payment
procedure was explained, expressing lack of trust in the Government.
• Payments were delayed for many contracts across Treasury because contract
technical representatives and contract specialists were on furlough.
U.S. Customs:
• An aircraft maintenance contractor expressed concern about delays affecting his
ability to perform work. The issue of non-payment placed a strain on the Customs
Service's relationship with their contractors and placed a large administrative burden
on procurement personnel in processing equitable adjustments for these contracts.
• The shutdown created a large backlog of correspondence with Congress on
constituent related issues and in communicating with the trade community and
Customs field employees.
• In Saudi Arabia, the shutdown caused an interruption in training courses for 21
Saudi Arabian Customs Officers and resulted in sizable extra per diem them costs
for the Saudi Arabian government. The shutdown also caused the cancellation of a
TDY to Saudi Arabia funded by that government.
• Customs was scheduled to give a presentation at a trade association annual meeting,
and had to cancel, as did other Government speakers. This left the customer with
no Government speakers, and they had to scramble to fill the time slots.
• The Customs Service was unable to respond to overseas cables requesting
information to pass through the State Department on to other countries.
• Phone calls from the public and foreign customs administrations were not answered.
E.g., Since our import specialists in the field were not working, customers were
not able to obtain answers on technical and policy questions in a wide variety of
areas, including entry operations, drawback, value, AD/CVD, etc. E.g., the trade
community was not able to obtain information from furloughed staff Many
first-time importers' calls went unanswered. Importers and attorneys calling for
status updates of projects were not able to receive information.
• Drawback claims were not input to provide requests for accelerated payments to
claimants
Financial Management Service:
• Due to furloughs of physicians at some of the federal clinics, some required
employee physical exams and applicant exams were cancelled or rescheduled.
Phone calls related to the Report on Receivables Due from the Public, Report on
Guaranteed Loans, and Civil Monetary Penalties Report were received each day
490
during the furlough. Credit agencies considered year-end reporting an essential
function and were upset to find that the Financial Management Service, the lead
agency for collecting and consolidating the year-end debt collection reports for
OMB, did not have essential staff to answer questions and provide assistance.
U.S. Mint:
* Processing of mutilated and uncurrent coin at the Philadelphia, Mint was suspended.
Because of the shutdown, the mutilated uncurrent Department, who redeems all
condemned coins for the Treasury Department was unable to process returns, from
banks and other institutions. All major redemption customers were notified not to
return any coins. Many calls were received expressing dissatisfaction.
Approximately forty jobs (or customers) went unprocessed creating a one week
backlog processing customer orders. The only possible way to catch-up and avoid
customer complaints is to work overtime at an estimated cost of $4,000.00 (25
Mondays of overtime).
Where possible workload backlogs are/will be addressed through overtime, work
prioritization and other means.
GOVERNMENT SHUTDOWN II
THURSDAY, DECEMBER 14, 1995
House of Representatives,
Subcommittee on Civil Service,
Committee on Government Reform and Oversight,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:10 p.m., in room
2154, Rayburn House Office Building, Hon. John L. Mica (chair-
man of the subcommittee) presiding.
Present: Representatives Mica, Bass, Burton, Morella, and
Moran.
Ex officio present: Representative CUnger.
Staff present: George Nesterczuk, staff director; Ned Lynch, pro-
fessional staff member; Caroline Fiel, clerk; Cedric Hendricks, mi-
nority professional staff; and Elisabeth Campbell, minority staff.
Mr. Mica. I would like to call this meeting of the House Civil
Service Subcommittee to order.
Toda/s hearing deals with the government shutdown, and we're
going to hear some of our colleagues. Members of Congress, on a
vast array of proposals, dealing with their various suggestions and
approaches to handling the shutdown. I have an opening state-
ment, and I believe our ranking member does. We will start with
that and welcome our witnesses.
This afternoon we will really continue the subcommittee's over-
sight hearings on the administration shutdown of government oper-
ations during a lapse of appropriations. Last week the subcommit-
tee heard nine administration witnesses describe their plans and
their oversight of agencies' operations for the past shutdown and
their preparation.
On Tuesday, four participants in that hearing wrote a letter to
the President. We informed him, in part, of our conclusion, which
is that the implementation of the shutdown was unnecessarily se-
vere and some of the closings we found unjustified, even within the
strictest requirements of existing law.
The testimony presented by senior officials of the largest govern-
ment agencies demonstrated, in fact, that interruption of benefits
and services could have continued, and that discrepancies occurred
in the continuity of operations essential to human lives and safety.
We are pleased, however, that the administration has responded
to many of the concerns we raised last week. The Office of Manage-
ment and Budget has directed agencies to submit revised shutdown
plans by December 10, we were told. On Tuesday, the administra-
tion announced that the Social Security Administration and the
Department of Veterans Affairs would retain many employees who
(491)
492
had been furloughed on November 14. This is a welcome step to-
ward a more cooperative approach to meet the needs of the Amer-
ican people and some of the Americans who most need the services
of the Federal Government.
However, I am somewhat dismayed that several agencies have
failed to provide 0MB with an update of their plans for more or-
derly action, should another shutdown occur, and that could hap-
pen within the next 24 or 48 hours. Also, I am discouraged to find
that 0MB has failed to provide this subcommittee with revised
shutdown plans, as we requested.
Tomorrow, as we all know, another continuing resolution will ex-
pire. If no progress is made on the budget issues, we could once
again see a disruption of some of our Federal Government services.
I wish that I could be more optimistic about the prospects for the
next few days, but the threatening tone of a letter from which I
will quote, entitled, "Open Letter to Federal Employees," of Novem-
ber 22, signed by the President and the Vice President, does cause
me some serious concern.
This letter was brought to my attention by my fellow Florida col-
league. Representative Dave Weldon. When he first saw the letter,
he thought it was a hoax and called the White House to verify its
authenticity. Let me read a few sentences that reflect the
confrontational approach the administration has taken.
The President and Vice President wrote, "We can't promise you
that your jobs and your lives won't be interrupted again. Too much
is at stake for America. If you are held hostage again, we know
that you would not want us to forfeit the nation's future as ran-
som."
[The letter referred to follows:]
493
Open Letter to Federal Kmployees
tVoin
Previdenl Clinlon und Vkx Prwidenl Guns
Wc are proud of the people who work for the federal gcvemmenL Aii>' Fortune 100
compam' would be lucky to have such a work torce. Your work makes on AmerH;uiis
more safe, free, and prosperous. We arc >dad >-ou are all back on the job.
Wc kacnv it h«w't been easy for you, Nvoudering whrt» «nr( if you would get your nexl
pay check. And many of you had to bear the indignity uf beii^ called "aon-esieotial,"
— some by j^ovcnuucnt critics, some even by yuui own nupurvuors. Colling
furlijuglied \vorkers uou-essential is deeply offensive and just plain wroag. The law
lurveJ uk lu furlough 800,000 wurkert wbusc jobs were not of an emergoicy naiuic.
Th« law says nothing about "essential."
Nil mie could My that medioal res«ui«b is non'Mcential. Or helping Americans go to
college. Or rehabilitating a million disabled Americans. Or supporting the widows
and orphans of vrtcrann. Or Weeping our drinking water .laTc. Or recruiting new
volimlccrs for the aimed forces. Or any ofthe long list of essential govenunenl
activities that had to be tetnporsrily suspended. In the short term, they were not
ciii«r9«nci«t, to th^ Iflw prohibited them. But thev remain clearly essential.
ViMi kll kuvu (hill ihc law under whivh muvt uf ihr yuv^frnnenl is uperulini; expiree
on December 15th. and the debate (bat led to the November shut down is sot cfver.
Wc can't promise you that your jobs and your lives won't be iutcmipted ogoin. Too
much is or stake for America. If you ore held hostage again, we know you would not
want us to forfeit the r.ation's funire as ransom.
So unT:I this issuc is settled the way we settle great issues in a democracy — through
peacrlul debtftc and compronuse you muoin good people mnght in wliai Churchill
called 'the worst system of government devised by rite wit of mao. except for all the
otiieiS. ' And when it is settled, t it you federal wi)tkeis wLo will imuc agoin cany
iiui ihe will uf ihe (icuplc. who will unce u^uin make it puisible Ibr America lo be the
winrer Wc salute \ou. and we ihatik >ou.
(signed) (signed)
Bill Clinton Altera
November 22, 199.^
494
Mr. Mica. This message implies a threat of a shutdown of the
government once again, and I confess to growing a bit weary of the
rhetoric of this excess. The administration has consistently and
needlessly exaggerated the potential adverse effects of a shutdown.
Our last hearing demonstrated that they have actually more discre-
tion in keeping truly essential functions open than they, in fact,
used the last time. Their challenge is to use this discretion wisely
at this time.
Last week, we heard administration witnesses describe their im-
plementation of the most recent shutdown. Today, we will hear, as
I said. Members of Congress address their assessments of these
events and discuss their various legislative proposals to remedy
some of the problems associated with the shutdowns.
I am pleased, also, that I have heard from leadership that they
are willing to proceed and try to adopt some remedies, if there can
be some consensus gained in making certain that we do have a rea-
soned and a unified approach, at least from the Congress, in trying
to ensure that some of these essential services continue and, in
fact, the spirit and the intent of the law is carried out.
[The prepared statement of Hon. John L. Mica follows:]
495
ONE HUNOBED FOURTH CONGflESS
Congresfsf of tte ©nitcb ^tateg
Jl^ouit of i^epresientatibnf
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
.ITSiX™ 2' 57 Rayburn House Office Building
Washington, DC 20515-6143
Opening Statement of the Honorable John L. Mica
Chairman, Civil Service Subcommittee
Government Shutdown II
December 14, 199S
Good afternoon, and welcome to this continuation of the Subcommittee's oversight
hearings into the Administration's shutdown of government operations during a lapse of
appropriations. Last weelc, the Subcommittee heard nine Administration witnesses describe their
plans and oversight of agencies' operations.
On Tuesday, four participants in that hearing wrote a letter to the President. We informed
him ~ in part ~ "Our conclusion ... is that your implementation of this shutdown was
unnecessarily severe, and some of the closings were unjustified, even witliin the strictest
requirements of the law. The testimony presented by senior officials of the largest government
agencies, . . . demonstrated interruptions of benefits and services that could have continued and
discrepancies in the continuity of operations essential to human lives and safety."
We are pleased that the Administration responded to many of the concerns we raised last
week. The Office of Management and Budget directed agencies to submit revised shutdown
plans by December 10. On Tuesday the Administration announced that the Social Security
Administration and Department of Veterans Affairs would retain many employees who were
fiiTloughed on November 14. This is a welcome step toward a more cooperative approach to
meet the needs of the American people.
We are concerned, however, that the Administration has not yet provided copies of the
revised shutdown plans to the Congress as we requested last week. Tomorrow, another
continuing resolution will expire. If no progress is made on the budget issues, we could again
see i disruption of government services. I wish that I could be more optimistic about the
prospects for the next few days, but the threatening tone of the "Open Letter to Federal
Employees" of November 22 that was signed by the President and the Vice President causes me
concern.
This letter was brought to my attention by my Florida colleague, Dave Weldon. When he
first saw the letter, he thought it was a hoax and called the White House to verify its authenticity.
Let me read a few sentences that reflect the confitintational approach the Administration has
taken.
496
The President and Vice President wrote, "We can't promise you that your jobs and your
lives won't be interrupted again. Too much is at stake for America. If you are held hostage
again, we know that you would not want us to forfeit the nation's future as ransom."
This message implies a threat to shut down the government again, and 1 confess to
growing a bit weary of the rhetorical excesses. The Administration has consistently and
needlessly exaggerated the potential adverse effects of a shutdown. Oiu- last hearing
demonstrated that they have more discretion in keeping trully essential functions open than they
used last time. Their challenge is to use this discretion wisely.
Last week, we heard Administration witnesses describe their implementation of the most
recent shutdown. Today, we will hear Members of Congress address their assessments of these
events and discuss legislative proposals to remedy some of the problems associated with these
shutdowns.
497
Mr. Mica. Our first panel this afternoon includes Members re-
flecting concerns of other jurisdictions in Congress. We will hear
from Spencer Bachus of Alabama, of the Banking Committee; Mr.
Peter Hoekstra of Michigan, who chairs the Oversight and Inves-
tigations Subcommittee of the Committee on Economic and Edu-
cational Opportunities; Mr. Ken Calvert of California, who chairs
the Resources Committee Subcommittee on Energy and Mineral
Resources; and Mr. J.D. Hayworth of Arizona, one of our distin-
guished first-term members.
We will also hear from other Members. This issue has attracted
a great deal of attention. I believe the second panel will include
some of the other Members who want to comment on the impact
of the shutdown on Federal employees. Our witnesses include Mr.
Joe Barton of Texas; Mr. Glen Browder of Alabama; Mr. George
Gekas of Pennsylvania; Mr. Steny Hoyer of Maryland; Mrs. Karen
McCarthy of Missouri. And we also have a request to testify from
Mr. Sonny Bono, the honorable gentleman from California, and Mr.
Dan Burton, from Indiana.
Now, I am pleased to recognize the ranking member of our sub-
committee, who has provided tremendous leadership on this issue
and other issues before the Civil Service Subcommittee, and has
also requested that we take some action. In fact, some of the action
we've done together has resulted, I believe, in some positive
changes in the way the shutdown will occur, if it does, in fact,
occur. And I thank him for his cooperation and leadership.
Mr. Moran, you are recognized for an opening statement.
Mr. MORAN. Thank you, Mr. Chairman.
I think the government shutdown was grossly irresponsible. It
was short-sighted. At best; it was politically motivated and kind of
a nutty thing to do. Now, we may not all agree with that conclu-
sion, but what we're going to try to do is to see where we can reach
some agreement to avert what was a real crisis that I think the
Congress has to assume the greatest amount of responsibility for,
because the fact is, we didn't get the appropriations bills even to
the President in a timely manner.
And that's what it's all about. It's the appropriations process get-
ting concluded in a timely manner, so that the agencies have their
money by October 1. The fact that they did not meet that, in mid-
November, we had to tell 800,000 Federal employees, after they
had already come to work, to go back home, and to delineate them
between those who were considered essential and nonessential,
which was a fairly arbitrary distinction, in many cases.
We can't let a recurrence of that happen this time, if there is to
be a shutdown. I don't think there should be a shutdown, but it
would behoove us to go on that assumption, because stranger
things have certainly happened this year.
So what we ought to be able to agree on is. No. 1, it was a ter-
rible use of taxpayers' money to pay Federal employees for not
working. For 4 days. Federal employees had to stay at home, were
told to stay at home, when they wanted to be at work, and then
we reimbursed them. I'm glad we reimbursed them. I have no prob-
lem, obviously, with the Speaker's commitment to reimburse them,
which he made good on at the first legislative opportunity. But
498
those Federal employees should have been earning their pay. They
wanted to, and I think the American people needed them to.
So the first thing we ought to do is to figure out a way to keep
Federal employees on the job, and earning their pay. Then the sec-
ond thing that we ought to do is to come up with a more reasonable
distinction, if there is to be some criteria, in terms of who should
get reimbursed.
Now, my legislation would simply keep people on the job and
then reimburse them as soon as funds became available. In other
words, it would do what we did the last time, except that the tax-
payers would not be paying out $750 million for work not per-
formed. We have brought out in these hearings how unfair it was,
as well, for some people to be on the job doing the work that they
were charged to do but also the work of their colleagues who were
not on the job, and then getting paid exactly the same.
Now, my legislation to do that, H.R. 2184, has been referred to
the Government Reform and Oversight Committee. There is almost
identical legislation that Congressman Gekas from Pennsylvania
has introduced in previous sessions that has been referred to the
Appropriations Committee.
I would hope that we could move in an expeditious way so that
we could get some legislation on the books, particularly given the
fact that this is Christmas time, so that we would not be punishing
Federal employees for the inability of the Congress to get its job
done. And I don't care if we blame the entire government, the exec-
utive branch, the judicial branch, whomever, but the point is that
we ought not use Federal employees as pawns in what is essen-
tially a political problem.
So, with that, I'm going to suggest that we find a way to bring
this corrective legislation to the floor under the legislation we
passed yesterday, which is called a martial law situation, where
you can bring legislation to the floor without the normal procedural
obstacles. And I think we ought to discuss that at the conclusion
of this hearing. But, at this point, Mr. Chairman, I would be anx-
ious to hear from other Members, many of whom, in looking at
their testimony, agree that this is a situation that needs correcting
and needs correcting very quickly.
Thank you.
Mr. Mica. I thank the ranking member.
Mr. Clinger, who is the chairman of our full committee, has
joined us.
Did you have an opening statement?
Mr. Clinger. I don't, Mr. Chairman. I want to commend you for
holding these hearings and giving our Members an opportunity to
tell us, from their experience, what the impact has been on their
districts and on the Federal employees in their districts, and what
sort of inconveniences and/or dislocations occurred as a result of
the shutdown.
Clearly, there's a lot of blame that can be spread around here.
I think our objective in these hearings is to get a clear idea of what
we can do to ensure that we don't have a repetition of this and that
there be some clearly understood parameters for how we handle
this type of situation.
499
So I am supportive of your efforts. I think it needs to be a bipar-
tisan effort, frankly, and I hope that it can continue to be that way.
I commend you for holding the hearing.
Mr. Mica. I thank the chairman and would now like to recognize
another distinguished member of our subcommittee and panel, Mr.
Burton from Indiana.
Mr. Burton. Thank you for the "distinguished," Mr. Chairman.
I think that almost everybody in the House and the Senate
agrees that, if we do have another shutdown of government, the
Federal employees should not pay the penalty for that. I have
talked to the Speaker about that, and I think he is agreeable to
legislation which would specify that any Federal employee who
chooses to work during a government shutdown would be com-
pensated. Those who choose not to work would not be compensated.
I have drafted legislation. I have talked to Mr. Moran and you,
Mr. Chairman, and others about this. I think this legislation would
be very helpful, would clarify the situation, and I think it would
receive wide bipartisan support. And I hope that we can move that
kind of a bill expeditiously through the committee and to the floor
for passage, so that Federal employees won't have to worry at
Christmas time and holiday times that, if there is a government
shutdown, they might have to pay a severe penalty.
So I think it will ease a lot of minds and ease of lot of tension,
and I hope we can move expeditiously on it.
Thank you, Mr. Chairman.
Mr. Mica. I thank the gentleman.
We have also received statements with requests to submit them
for the record from Mr. Lazio, who chairs the Banking Committee's
Subcommittee on Housing and Community Development; and Mr.
Bennie Thompson of Mississippi; and others. Without objection,
these statements and others will be made a part of the record.
[The prepared statements of Hon. Rick A. Lazio, Hon. Bennie G.
Thompson, Hon. John A. Boehner, and Hon. John Ensign follow:]
500
Rick A. Lazio
Chairman, Subcommittee on Housing and Community
Opportunity
Statement submitted for the record to the Subcommittee on
Civil Service Hearing on
"Government Shutdown IF
December 14, 1995
Thank you Mr. Chainnan. As Chairman of the Subcommittee on
Housing and Community Opportunity and the primary authorizing committee
for the Department of Housing and Urban Development, I am especially
grateful to the Civil Service Subcommittee for holding hearings on the
imphcations of govenmient shutdowns.
Over the last several weeks, a number of critical questions have arisen
regarding contingency plans implemented by various Executive departments
during the recent govenmient shutdown. Among the more serious, are
questions of whether staff levels at HUD may have been set with poUtical
concerns in mind.
During the shutdown, the Department declared that 97 percent of its
12,000 employees were non-essential, leaving only 400 employees to perform
essential and legally mandated functions under HUD's responsibiUty.
According to HUD's shutdown plan, contingencies were in place to address
critical HUD functions "involving the safety of human Ufe or the protection of
property or activities essential to preserve the elements of the money and
banking system in the United States." In addition, according to a November
17, 1995 HUD memo from General Counsel Nelson Diaz to the Secretary,
HUD had prepared well and plaimed for staff levels needed to address critical
HUD functions during a shutdown.
501
Page 2
Nevertheless, Secretary Cisneros issued a statement on the first full day
of government shutdown November 14, warning that the shutdown would
condemn the homeless and people with AIDS to the streets. In fact,
according to their own shutdown plan, the Department had in place
contingency plans that specifically addressed the homeless and AIDS
programs because '^failure to do so would imminently threaten the safety
of human life."
Even more significant, is that while the General Counsel of the
Department had determined that staffing levels were well prepared for prior
to the shutdown, 3 days into the shutdown Counsel Diaz foimd that the 400
people deemed essential were "clearly not enough to perform the legally
mandated functions under HUD responsibility." This begs the question: If
HUD's own General Counsel determined that the Department had
sufficiently prepared for the shutdown, why were staff levels reduced to
critically inadequate levels?
Two weeks ago I wrote a letter to the Secretary raising these concerns
and requesting a full and timely accounting of the plans that were
implemented during the shutdown. In the letter I communicated my strong
belief that staff levels should not be manipulated to foment political
opposition or engage in dangerous political games.
Mr. Chairman, I commend you for holding these hearings. Although
no member of this body is desirous of any type of government shutdown,
today's hearing is especially important to me as I continue to review HUD's
mission and its ability to serve the needs of the American people into the
twenty-first century.
I look forward to today's testimony and a review of the subcommittee
transcript.
WASHINGTON OFFtCE
H HouM Oftia Bm
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aaasrfjington, ©C 20515-2402
COMMITTCE ON AGRICULTURE
AMD FOHEfCN AGMtCULTUNC
COMMinCE ON SMALL BUSINESS
SuKOMMITTtC:
GO>«nNMENT PnOCRAMS
Mr. Chairman and members of the Subcommittee on Reform and
Oversight.
I am pleased to participate in this hearing today regarding the Federal
Government shut down. As you may know, I represent the Second
Congressional District of Mississippi.
I appear before you today on behalf of over nine-hundred Mississippi
State employees as well employees from other states and U.S. territories, who
were furloughed from November 14-19, 1995 due to the inability of the
Congress to take care of the nation's business. As you know. Congress
passed on November 20 1995, HJ Resolution 122, which included language
to cover federal employees furloughed as a result of the lapse in
appropriations. However, this resolution did not include similar language to
cover state employees who carry out Federal programs. Most federal
agencies provide funds to States through grants which finance either an
entire project or program costs for a defined period of time. This resulted in
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Mound Bavou. MS 38762
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503
these employees not getting paid for the time they missed work and many
much needed services were interrupted.
In Mississippi, Rehabilitation Counselors were unable to authorize services
and the needs of their clients went unmet. Blind residents at the Addie
McBryde Center and mentally retarded residents at the Ellisville Center for
the Mult-Handicapped Blind were sent home. Applications for Social
Security Disability and Supplemental Security Income were not processed,
thus delaying benefits for those who qualify. As you can see, this shut down
had a major impact on my state of Mississippi as well as the nation.
Therefore, I introduced H.R. 2733, which is designed to provide clarification
in the reimbursement to States, such as Mississippi, for federally funded
employees carrying out Federal programs during the lapse in appropriations
between November 14, 1995, through November 19, 1995. I urge you, my
colleagues, to support this legislation to reimburse the states for the money
they use to compensate state employees during the government shutdown.
These men and women are honest hardworking Americans caught in the
cross-fire of this unfortunate budget battle. Let us make amends and provide
the leadership that we were sent here to provide.
Thank you, Mr. Chairman and members of the committee for this
504
opportunity to testify before the Committee on Government Reform and
Oversight.
505
J^onit Republican Conference
?B.^. l^ovat of i^epre«entattbn(
Matfijtngton, SC 20515
Testimony of the Honorable John Boehner
on Government Shutdowns Before
the Civil Service Subcommittee
Thursday, December 14, 1995
Mr. Chairman and colleagues, as a member of the House Republican
Leadership, I appreciate having the opportunity to appear before this subcommittee.
Not since 1969 -- the year Neil Armstrong walked on the moon -- has Congress
balanced the federal budget. Since that time, every mechanism and Washington
gimmick devised to slow the growth of the federal bureaucracy has either been
resisted or failed. During the 1980s, the Democrat-controlled Congress appropriated
beyond the Reagan budgets and resisted at every turn controlling the size of
government. In other words. Congress talked a good game but lacked both the will
and the courage to make the decisions necessary to balance the budget.
Consequently, we have mortgaged our children's future.
There is no excuse for the failure on the part of previous Congresses to
balance the budget. If this great country of ours has the ability to put a man on the
moon, it certainly can muster the type of leadership needed to balance its books. As
the November 1994 elections demonstrated, the American people agreed it was time
to replace the old team that had occupied the field for 40 years and bring in a new
starting lineup.
The new team in Congress shares the American people's commitment to a
seven-year balanced budget -- as promised in the Contract with America. Although
past Congresses promised a balanced budget, it will take the Republican-led 104th
Congress to keep that promise.
As the prospect of another partial government shutdown looms at 1 2 o'clock
midnight tomorrow, it is imperative that everyone have a realistic understanding of
what this is all about. It's about our desire to balance the budget, make government
smaller, and provide a brighter and more prosperous future for our nation's children.
Despite what others have said, it is not about anyone's desire to close the government
and create anxiety among federal employees. Far from it.
506
It is also about what would happen if we don't balance the budget. Interest
rates have steadily declined since last November because the mar1<ets believe we are
serious about a balanced budget. They will almost certainly rise again if we fail.
We now face the possibility of another partial government shutdown because
President Clinton doesn't share this Congress' commitment to an honest and
believable balanced budget in 7 years. Of course, President Clinton has promised to
balance the budget on numerous occasions.
While campaigning for president, Bill Clinton promised to balance the budget in
5 years. This June he said he could do it in 10 years. And then 9 years. And, finally
3 weeks ago he signed Public Law 104-53 that clearly and unmistakably states that
the White House and Congress shall enact a seven-year balanced budget using
CBO's honest numbers by the end of this session of the 104th Congress.
But the President's actions speak louder than his words, confimiing what many
Americans already know: it's much easier to make promises than to keep them. To
date, the President has submitted three budgets to Congress. Not one of them ever
balances. When presented with a fair, credible balanced budget plan, he chose the
"veto pen" over the "balancing pen." And he chose demagoguery over honest debate.
The President has had more than ample time to produce a balanced budget
plan that does not rely on rosy economic scenarios. But he hasn't done that. Instead,
his third budget not only won't balance in 7 years, but it never wipes away the red ink.
A $365 billion shortfall and a $1 15 billion deficit in 2002 do not balance the budget in 7
years.
By leaving a trail of red ink as far as the eye can see, the President is wilfully
choosing to saddle our children with higher debt and, inevitably, higher taxes and a
lower standard of living. For the sake of our children and their futures. Congress can
no longer tolerate this fiscal child abuse.
So if parts of the government shut down at midnight tomorrow, it will be due to
the President's refusal to put big government on a diet. The balanced budget plan
that President Clinton vetoed last week would have spent $2.5 trillion more during the
next 7 years compared to the previous 7 years. The President, however, doesn't
believe $2.5 trillion more is enough. He wants to spend more.
Let's face it. This administration wants more Washington spending. We want
to move power and money t)ack to families and communities. That's really what the
last government shutdown was all about. But rather than focus the det>ate on this
moral imperative, the administration instead chose to score political points with
constituencies that would be adversely affected by a shutdown. What else could
possibly explain why govemment services that actually help people were dismpted,
while the Washington bureaucracy was insulated as much as possible from the
shutdown's impact? We cannot dismiss this as simply a mere coincidence.
507
There should be no doubt in anyone's mind that the previous shutdown didn't
have to be as severe as the Clinton Administration made it. Social Security, civil
service, and veterans benefits shouldn't have been treated differently. But they were.
The Education Department's forward-funded programs should have continued. But
they didn't. OSHA workplace safety and mine safety should have been treated the
same. But they werenl.
I am pleased to hear that the Administration now recognizes that it
unnecessarily worsened the effects of the shutdown, and will now alter its contingency
plans for any future shutdowns. But rather than plan for future shutdowns, the Clinton
Administration can help avoid them altogether by joining this Congress in reaching a
an honest seven-year balanced budget agreement. The future of our children ought to
take precedence over the special interests' insatiable appetite for bigger govemment
and higher taxes. That's what this balanced budget battle is all about.
I have said it many times before and ill say it again: No more excuses, Mr.
President. No more Washington gimmicks. It's time to do the right thing for our
children's future. It's time to balance the budget.
508
JOHN E. ENSIGN
SuSCOMMrTTte ON H£*ITM Kjqq g SaMAR* AvE . SuiT( D
UMAN RtSOURCES L^S VECaS, NV 89104
Congress of tlje WinittH States ;;°™;
l^ousie of i^epredentatibes
aaasljington, 1B€ 20515-2801
December 14, 1995
TESTIMONY OF REPRESENTATIVE JOHN ENSIGN
Government Reform and Oversight Subcommittee on Civil Service
Thank you, Mr Chairman, for scheduling this hearing so that this and other testimony can be
heard to help address the question of what federal government services and positions are essential
during periods of shutdown I strongly believe that there were many aspects of the shutdown in mid-
November for which previous Congresses had failed to develop a strategy or appropriately consider
My Resolution, H Con Res 1 13, is quite clear and very simple The Resolution states that
the President, Vice-President, and all Members of Congress should not except pay from the
government during periods of shutdown Shutdowns have happened in the past and will likely
happen in the future, causing disruption and financial pressure on federal employees across the
country In order to lead by example, both Executive and Congressional leaders must be willing to
make the same sacrifices as other federal employees
Some of my colleagues have joined me in offering legislation that aims to remove the special
pay protection for the President and Congressional Members during periods such as shutdowns
Language in both Article I, Section I and the 27th Amendment to the U S Constitution stipulating
that pay for the President and Members, respectively, cannot be varied during the period of the
individual's present term in office Because of the legal and legislative questions regarding changing
compensation rules, I considered it important to let my constituents know, both federal employees
and others, that I was voluntarily holding myself to the same standards to which other federal
employees were being held in matters of pay
I support legislation that endeavors to remove these protections in the future, but believe my
bill addresses the immediate question of Presidential and Member pay in the 104th Congress I
believe voluntary compliance is necessary until such a time when the constitutional questions can be
properly addressed
Thank you, Mr Chairman
509
Mr. Mica. I would now like to proceed. It is the practice of our
subcommittee to ask our witnesses to summarize their remarks, if
they could, in 5 minutes, to be fair to everyone, also to allow for
questions. If you have a lengthy statement, it will be made a part
of our full record.
I would like to take a moment to recognize Mrs. Bachus who has
joined us. Good to see you. You haven't been before our subcommit-
tee.
The second order would be to recognize her husband, the Hon.
Spencer Bachus, who is on the Banking Committee and has re-
quested testimony today.
Mr. Bachus, you are recognized for 5 minutes.
STATEMENTS OF HON. SPENCER BACHUS, A REPRESENTA-
TIVE IN CONGRESS FROM THE STATE OF ALABAMA; HON.
PETER HOEKSTRA, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF MICHIGAN; HON. KEN CALVERT, A REP-
RESENTATIVE IN CONGRESS FROM THE STATE OF CALIFOR-
NIA; AND HON. J.D. HAYWORTH, A REPRESENTATIVE IN CON-
GRESS FROM THE STATE OF ARIZONA
Mr. Bachus. Thank you, Mr. Chairman. It's a pleasure to come
before the committee.
First of all, I want to stress that I think that the government
shutdown, the debt ceiling crisis, the balanced budget debate, all
of these may appear to be distinct items, and sometimes we say,
"We're dealing with the debt ceiling; we're not dealing with the bal-
anced budget," or "We're dealing with the government shutdown."
But they are all interwoven.
Had we had a balanced budget, we would not have had a debt
ceiling crisis. In fact, this Congress has sent two opportunities to
the President to raise the debt ceiling, but they were linked with
a balanced budget. As long as we continue to not balance the budg-
et, as long as we continue, we're going to bump up against a debt
ceiling, and we're going to have government shutdowns. Now, they
may be the week before Christmas, or they may be when this coun-
try has an economic calamity and we simply run out of money.
I want to tie that with something that several people on the floor
of the House today said this is nothing to concern us about; this
is not anything to get all excited about — in fact, they said that the
bill that just passed the House — and I don't have the vote count,
but as I left I think there were less than 100 no votes; when it fi-
nally came up for a vote, there were 60-some-odd or 70 people vot-
ing present — was to say that these trust funds are off limits.
What I would like to say, if nothing else, is that this is serious,
what's happening to the civil service trust fund and the voluntary
pension fund of Federal employees. This is not something that we
should look the other way on. This is not something that we ought
to say they will be paid back with interest. Because, quite frankly,
we can't make that promise. We can't look into the future and say
that money will be paid back.
What we do know is that the Secretary of the Treasury has
taken an unprecedented step in this Congress and during our
watch. And what he has done is, he has reached in — he's done two
things, initially. The first thing he did was, he reached into the
40-190 97 - 17
510
Civil Service Retirement Fund and he took from it almost $40 bil-
lion in interest-bearing Treasury securities.
And he substituted — and he was before the Banking Committee
yesterday, and I characterized it as substituted an lOU for those
interest-bearing Treasury securities that he took out of the Civil
Service Retirement Fund. And he said, "That's correct." He did not
disagree with that analogy.
Now, as I said, some have said, "Well, that's got to go back, at
some point, with interest. Got to be paid back." But he took it out,
$40 billion, and then he did something else. Every day the vol-
untary pension plan, the so-called "Thrift Savings," or G fund,
every day that is reinvested at the best available rates, only during
this crisis it has not been reinvested. It is not invested; it is not
drawing interest.
The entire pension plan that many of us in this room have volun-
tarily put money into, Federal employees, 100 percent Federal em-
ployees, that's not drawing interest. For people to continue to say,
1 day, someday it will be paid back, maybe it will, but what inter-
est rate will we get? Are we guaranteed, the people that put money
in there for their retirement, hoping to get it when they retired,
with interest as it grew, have we been guaranteed that they will
get the best available rates? No.
Can we, can any of us guarantee that some Congress in the fu-
ture won't say, to balance the budget or under some austerity pro-
gram, "We're going to give it back, but we're going to give it back
at 4 percent." If you look over the last 200 years of this country,
when you start looking for things to do, one of the first things you
do is, when you say, "I owe you this; let's compromise at that."
We have a stock market at an all-time high, but we don't know
that 2 months from now it may not be 2,000 points lower and inter-
est rates a point or two higher, and our ability to finance all this
basically shot.
Now, the Secretary of the Treasury did something else, he said,
"There's going to be a 12-month debt crisis." And he took from the
Civil Service account 12 months of benefits for Federal retirees.
What did he do with that? Did he pay benefits to those retirees?
No. He used it to fund the day-to-day operation of this government.
Those of us, you know, who are alarmed by this are simply
shocked that people are saying, "No big deal. You took interest-
bearing Treasury securities out of the retirement funds; you totally
drained one of the accounts. That's no big deal."
My gosh, isn't a retirement fund, as then Senator Al Gore said
on August 1, 1986, almost 10 years ago, "This is a dedicated trust
fund, and it ought to be used for one thing and one thing only, and
the Federal employees ought to have that expectation and trust,
and that's that it be paid 1 day for their retirement, not to address
a debt ceiling crisis, not to pay government."
We used it for the day-to-day operation of government, and peo-
ple are continuing to say, "No big deal." I say it is a big deal. It
just shows us, if nothing else, can we not all agree this is no way
to run a government. When we have seen private pension plans
dipped into, we have been excited about that. Aren't our Federal
employees entitled to the same respect? Is not their retirement
fund entitled to the same respect?
511
The best statement I've seen on this is the statement of then
Senator Al Gore, and I would submit his entire statement for the
record, and simply say, a trust fund where there is no trust and
there are no funds, is no trust fund.
Thank you, Mr. Chairman.
[The prepared statement of Hon. Spencer Bachus follows:]
512
STATEMENT OF THE HONORABLE SPENCER BACHUS
BEFORE THE SUBCOMMITTEE ON CIVIL SERVICE
OF THE GOVERNMENT REFORM AND OVERSIGHT COMMITTEE
December 14, 1995
Chairman Mica:
I appreciate the opportunity to come before the Subcommittee
to discuss the recent government shutdown and the related raid by
the Clinton Administration upon the Civil Service Retirement &
Disability Fund and the G-Fund.
These actions, although seemingly distinct, are in my mind
intricately related. The budget dispute, the shutdown, and the
so-called debt ceiling "crisis" are all part and parcel of the
historic struggle to curtail deficit spending. There should be
no confusion. The government shutdown and the recent debt
ceiling incident occurred solely because we do not have a
balanced budget.
I would like to speak to how the recent actions by Treasury
fit within the budget debate.
PRESIDENT CLINTON IS NOT SERIOUS ABOUT A BALANCED BUDGET
On November 15, Secretary Rubin made the following
determination :
"Based on the information that is available to me today, and
pursuant to my authority under 5 USC sec. 8348 (j)(5)(B), I
hereby determine, for purposes of 5 USC sec. 8348 (k)(2),
that there exists a debt issuance suspension period from
today until 12 months from today."
By doing so, Rubin borrowed funds equal to the pension
payments for federal retirees for 12 months — one whole year —
and is now spending that year's worth of retiree benefits on the
general obligations of the U.S. government.
While there have been two dozen debt ceiling "incidents" in
the last 15 years that have resulted from struggles between the
Executive and Legislative branch, this raiding of the retirement
trust fund and the G-Fund was not simply business as usual. In
the past. Treasury has redeemed trust fund assets simply to pay
beneficiaries or to bridge a short term debt ceiling crisis; in
this instance, the Treasury has taken the unprecedented step of
redeeming a full year's worth of retirement benefits in order to
fund its own political objectives. I am among those who strongly
que&tion the legality of using these funds for the payment of
general government obligations.
What does this 12 month debt suspension determination tell
us about the Administration's views of a balanced budget? Could
it be that 12 months would get Secretary Rubin and the Clinton
513
Administration just past the November 5, 1996 presidential
elections? Could it be that Bill Clinton has no intention of
negotiating in good faith on a 7 year balanced budget, despite
the fact that he has publicly committed to a balanced budget many
times over the past few years? At a minimum, Rubin's
determination of a 12 month debt issuance suspension period was a
transparent move to raise funds with which to maintain government
spending so that President Clinton could avoid coming to the
table and negotiating a balanced budget.
Did President Clinton have to do this? The answer is a very
clear NO. First, the President never considered deferring or
rescinding spending in order to avoid hitting the debt ceiling.
Rather, it was pedal-to-the-metal spending as usual.
Second and more tellingly, the Congress sent President
Clinton two debt ceiling increases. The President vetoed both
increases because they require a concrete, no "smoke and
mirrors", balanced budget. Let me say again: if we have a
balanced budget, we would not be here today.
THE NEED FOR CONGRESSIONAL CONTROL OVER THE DEBT
It is time that we take a quick look at the United States
Constitution. Article I, Section 8 provides: "The Congress shall
have power ... To borrow Money on the credit of the United
States ..."
That's right — it is Congress — not President Bill
Clinton, not Secretary Robert Rubin — that determines when we
spend today the money our children will earn tomorrow. Although
some would argue the debt ceiling statute is obsolete, the
statute, if nothing else, is useful as a reminder of the
profligate deficit spending that has been the sorry legacy of our
government. But beyond its symbolic significance, I think the
debt ceiling statute is fundamental to Congress's constitutional
authority over public debt — i£ we close the loopholes like the
one used by the Treasury Department.
President Clinton's unprecedented use of the trust funds
stands this authority on its head. As Secretary Rubin admitted
in testimony yesterday before the House Banking Committee, when
the Treasury dipped into the trust funds it simply used creative
accounting to find a way to continue deficit spending.
For the past 29 days, the loophole used by Secretary Rubin
has resulted in the obligation of over $60 billion of our money
without Congressional approval. That is eqiial to $244 for every
man, woman and child in the United States. If he used all the
$1.26 trillion in federal trust funds. Secretary Rubin could
deficit spend until the year 2001. This would cost each of us
over $5,000 over the current $4.9 trillion national debt.
President Clinton may be happy about piling this debt on
514
each of us but the American people should not be subjected to
this burden without Congressional approval.
ITS TIME TO CLOSE THE LOOPHOLES
Remember the ESF fund. The Exchange Stabilization Fund
exists for the limited purpose of meeting our goals to the
International Monetary Fund but had been used over the years to
make small, short term loans in emergency situations. It was
probably a very useful tool for the Treasury Department. This
obscure fund was tapped by President Clinton, however, in an
unprecedented fashion to loan $20 billion to Mexico for up to 10
years, without obtaining Congressional approval.
Just as Congress took steps to curb this abuse of the ESF
fund, we now need to take steps to curb the recent abuse of
federal trust funds. Although some flexibility in regard to the
trust funds may very well be a good thing, the precedent set by
President Clinton in abusing his authority over the trust funds
necessitates that we act to restore confidence in the sanctity of
all trust funds and to restore Congressional control over the
federal debt.
H.R. 2621 that is scheduled for floor action today is a
necessary step in restoring confidence in the sanctity of our
trust funds. I would like to read excerpts from a floor
statement made by a Senator during debate in 1986 on an amendment
to the Civil Service Retirement and Disability Fund statute that
was designed to do exactly what H.R. 2621 does — prevent the
Treasury from raiding the fund to pay general government
obligations.
Like the Social Security Trust fund, the civil service
retirement and disability fund is a dedicated trust fund and
as such its assets may only be used to provide benefits to
civil service retirees . . . That fund stands as a strong
symbol of assurance that federal employee retirement
benefits will be paid when they become due. While employees
may not fully understand the arcane interactions of Federal
financing that results in the ultimate dispersal of their
annuity checks, they do recognize when money that they have
contributed toward the financing of their benefits have been
used in ways other than those intended or promised under the
statute establishing that fund. ... It was right for them
to take offense last year when the civil service fund was
the first tapped — even before Social Security
disinvestment — to keep the Nation solvent during the
1986 debt ceiling crisis. . . The amendment that Senator
Eagleton and I propose would acknowledge, indeed would
preserve, the sanctity of those contributions that these
employees have made toward their retirement. (132 Cong. Rec.
at 18,732-3.)
Who made that statement? Then-Senator Al Gore. Ten years
515
later Senator Gore's statement remains the best explanation of
why «; need this bill -- to ensure that trust fund assets are
used only for the purpose of the trust fund, not for general
government obligations.
As senator Gore stated, it is right for federal employees to
take offense when the civil service retirement fund is used for
pol it ica! purposes. It is time that we protect the trust funds
?nd restore Congressional control over the federal debt.
Thank you, Mr. Chairman.
516
UNITED STATES \#v^^^^/ OF AMERICA
Congressional llecorfl
PROCEEDINGS AND DEBATES OF THE 99** CONGRESS
SECOND SESSION
VOLUME 132— PART 13
JULY 29, )9«6'f oliUGbST 5. 19«
/V (J *<y \
(PAGES 17869 TO 193H)
UNITED STATES GOVERNMENT PRINTING OFFICE, WASHINGTON, 19M
517
18732
CONGRESSIONAL RECORD-SENATE
August 1, 1986
AMCFTMU*! bo. IJ
"(B) tiie lervn 'd«bt Usuasc* luapenslcm Donnal procedure In hADdling tbe
(FMrpove: To limit the authority to loT«t period' mmu taj p«rod fof whkh the Soc- fund's investment In two wayr Plrat. It
and d^.«t «^.ie..">i ^.T" S^'^ !l'!f!^^'r'^>.^!:tfli^«V^::^.*LL^ <l«l*i^ investment of fond r^lpU
Itetircmcst aod DU&bUltT Fund]
Mr. EAGLirrON. Mr. President, t
haTc &o aoieiidment which I send to
Uiedetk.
The FRBSIDINO OFFICER. The
ameiKlment will be gtated.
iniiinrr of oblUuiocii ol the Unit«<i Stats .^ ...^.nrj i> „„_.r^_i. ...i,^J.,^
=im«dn,t to ort«-lT ocmdart tile ttoiad.! "»• •«f.?*- i' Pfematorelj redeemed
some 01 the funds aecuntiee. GAO cs-
luffVilciit to orderly conduct Uie ttnandal
opervtloiij of tbt Omted Sutee rau not be
Da»de witnout «xoe«<Jmt toe public debt tun»tcs u
(b) Sa1e> and Rcdcraptlooa br the Fund.-
S<^:UoCl U48 of btl« i. cmlted Stata Code.
direct result of that
action, the fund loet trcinendous tnter-
cst eftmincK-
Mr. President. I ask un&nimoiu con-
The assistaiit le(^£latfve clerk re»d m amended by lubeectioo {»). la farther j^jj ^ j^^^ printed In the Rrooiu a
ISfSljl^aj;^^^^ »t the «i>d the lollowto. ^^j^ Ciomnt the fleurei.
"'" "' " There bclrte no objection, the table
as f olloi
The SaaUn from MiEsauri CMr. Emux- ^^^ ^^^ oc^,;,^ » «.. , ,.,,_, ._,
T0»). for hinuelL Mr. Ooaa, Mr. Lavw, and ^'^j' ^l^jJ^'^lJ^iJuiueo, oWi«aiaon»."OT "»» ordered to be printed In the
"" ■" ._™»-.-« .<™.- ^^^^ inreaed aaaeta of the Fund only for RCCOKD, u f oUows:
thf parpoB* of enabUnc the Fund to oiake mttnrt amcMmt lou
D«yment4 authoriaed by the prvriaioiv ox nocal year
Mr. GLOir. proposes aa amendiDent anm-
beredtaca.
Mr. EAGLETON, Mr. Presidenl, I
aik unanimous consent that reading of thl« subchapter or chapter M of this UtJe or
the azneodxncnt be dispensed wlth-
Tbe PRESTDENG OFFICER. With-
out objection, it is so ordered.
Tlie saiendment is as foUows:
related proriaioxu of Lav. If the Fund holds
any amoonta vhich. by reason of the public
debt limit, are not inrosted. tlie Secretary
tnay nevrrthdczs ma^e such saio aod r^
demptlons U. aiid onJy to the extent, neces-
*61,S1J13
TtJSl.lM
6.0SC
At the end of the amendment, insert liie ^^jy to easure thiit saeii payments are made
foJIovrtof ae« section: In a ttmely manner.
sec . CIVIL fizjtvicf Ksmstnoct Aire disabu^
rrrruKU
itt*..
19«S..
)»8«-
Total m 1S9.007
Mr. EAGLETON. Mr. President.
Treasury has restored tT7.714— a mere
(c) Reporte Regarding the Operation and drop to the bucket, $141,381,233 in in-
Suius of the ruT>d.— Section SMS of tiUe i. tercel belonging to dvU service relir-
<a) Investment and Restoration of the United Stales Code, as amended by suBsec- ees is lost. The Treasury is not entire-
Fund-— Section 8»4I of tttJe S. United Staiee tions (»l and (b). ia lurtber amended by j, (^ blame The laws instructing the
Code, b amended by »ddlD« at the end the adding at the end the roDowlng new aubace- secretary of the Treasury resarding
'°°"lflSJtil^^^Si suhKcUon (c) of ""^IXD The Secretary of the Treasury ?^1}?? »^"^ '*"^ ^"^ '**'"; "5?"
this section, the Secretary of the Treasury jhaU report to Conn^ss on tae operation "**■ With our amendment, we claruy
may suspend additional Investment of mj statua of the Fund durini cath debt Is- our intent — the money put away In
amounts m the Fund if necessary to ensure suancc suspension period for vhich the See- good faith by retirees must be there in
that the public debt of the United States retary ii required to laXe action under para- full
does not exceed the public debt limit, oaph c3) or (4) of subsection <j) of this sec- The parpose of this amendment i£ to
-<.2> Any amounu In the Fund which, tion. The report shall be submitted as soon ^^ modify and clarify the authority
solely by reason of the pubUc debt limit, aje ,j possible after the expuatlon of such , ^. g^-t^^— „, ,1, Trpamrv in
not invested shall be InvMted by the secre- pctiod. but not later than the date that is »0 01 ine i>€creiary oi tne ITcamry m
tary of the Treasury as soon aa such Invest- da.,^ alter the "rat normal mwrest oarmcnl connection with ha r«ponslbiliti«for
menta an be made without exceeding the dau oocorring after the eipiiauon of such Investtng the assets of the avil service
public debt limii Doiod. The Secretair shall concurrvntlj retirement and disahUlty fund. Speeifi-
"(J) Upon expiration of trie debit issuance transmit a copy of such report to the Comp- rally the amendment would allow the
suapensloD period, the Secretary of the troller Oeneral of the United States, Secretary to lemporartly suspend addl-
Trea»vir> shall Immediaiely issue to the "(j) Whenever the Secretary of the Trea> tlonal investment of the fund's assets
Fund oblitauons, under cnapt«3L of title ury determines tnat by ra«on of th. pobUe ^ ^ investments wouJd other-
»1 that crwtwithslandlng subsection id) of aebt limit, the Secretary win be unable to *?™,!i,tS w. ThT^ihiu Ivhf ii™it
thia sceUoB) bear toch intcrat rates and fully comply with the re^ulremenu of sub- »i?« ^^^^^ ">« P""''"' °*°' "°"'
maturity dales a<r are necessary to ensure section (e) of this section, the Oeaetary being exceeded.
that, after such obligations are issued, the ,haU Immediately notcy Congress of the de- Furthermore, after such a SUSpen-
hoWin^s of the Fund will repUcaic to the termination. The notification thai) be made slon, the Secretary would 1>C required;
maximum extent practicable the obllgationa i^ writing.". First, to reimburse the fund for any
that -Tjuld oe held i;y the Fund U the debt ^^ EAOLHTTON. Mr President, ear- investment lost as a result of the su»-
t»^oc« suspension period had not oc- j^^^ ^ Senate passed a Finanoe Com- pension- and. second, to invest unln-
"^On the first normal tnterrrt p^Tnent mlttee amendment prot^wUng the vested assets of the fimd in a manner
dau after th« expiration of any debt issu- Social Security Trust Fund from dteln- which, to the extent practicable,
anee sispenslan period, the Secretary of the vestment during panicky moments would make the fimd whole, as though
Tieasurr shall pay to the Fund, from ac- juch as this, when the Ooverrunent Is, such suspcnsioa never occurred,
coonu tn the eeneral fund of the Treasury ^ ^ speak, on the brink Of bankrupt- Moreover, the amendment would
of the Dntted States not otherwise appropri- Senators Gobs. LBvru, OlSIK. and allow the Secretary to disinvest assets
^^J^!!S\/S:r^^^' ^^ 1 •« oHertog an identical amend- of the fui«5 when the fund is holding
^^^h« SS aS^^TTf toter.« that ment^proteetlng the chrfl service re- uninvested assets due to the publk
would have been earned by the Fund during ttrement and disability ftmd— frtwi debt limit, but only when necessary to
such debt Issuance suspension period U— haety qulck-HxeB which undermine ensure timely payment of amotmts »u-
"(i) amoonti in the Fund that were not In- the financial Integrity and public oon- thorized to be made from the ftind.
ve««d during such debt Issoanoe suspension fidence in Federal trust tUDdg Mr. GORE, Mr President, Federal
period solely by teaion of the pubUc debt -j^^ ^^.jj jej-rice retUemtnt and di»- employees earn, u part of their com-
UBititaaytajDva^ and ability fund, the fund which contains pensaUon package, retirement benefits
-^'!?SS^SSU*^^^c;lSS!2 duTfS Fed««l employees' retliement eontrt- payable through the clvU service re-
^^«^J^s,SSi^rX>1^ i;S^^tr2«.4bmJonlnv»tedln tlrement and dtobili^ trust fund.
STreaSn M^pawicd^ltaith.d nc\ Treasury securities. According to the Like the Social Security tiMft lund.
oeeurred. ovw General Accounting Office, on three the dvO service retirement and dlsabil-
•tB) the net amount of interest actually occaaiODS itnce 19M. the Treasury has Ity fund Is a dedicated trust fund and
e«n>eo by the Fund aumg such debt Issu- manipulated \tii dvU servloe retire- as such, its assets mar only be used to
anoc sospeoslon pnlod. __.( ,^ disabmty fund by taking provide benefits to dvil servtoe retir-
•TijFor purposes Of thta sotarrtion and ..unu^^ actions In an attempt to eei.
"^^TfS? 't^JTtSL^ ^"^"meaM ^^ U»e Oovemment's fUianooi." That fund stands u a strong symbol
th.'iiLSL.^'SpSSbyl^J^^'foi'a'?^ SSSTftoe^ yeax. »»*. l^f »^ t! "'^TS^J^^'^^V^'^
une JL and 19M the Treasury departed from tlremect bttneflts wfU be paid when .
518
August I, 1986
CONGRESSIONAL RECORD— SENATE
18733
they become due. While employee* meat expecCalloos remaJn ihreateaed Ai me approprau plict in me conuniticc
may not luUj undenrtacd the &nane when they «ee their cost-of-llvliij »d- «men«menu u imtnded. add the [ouowlne
loterscttons of Pederel fUmncln^ that Ju«tment« reduced because of budget- nrwwcOoa-
result in the ultimate dispersal of ary ooDoems and their retirement ^^"^ ""' with»t»ndin» any other proti-
their annuity checks, they do recs>v- funds used to pay obligations other •'o"""*"'
nire when money* that they h«»e oon- than those Intended. **^ "" Secrtiarr ol Agrlcmiure ibill re-
tributed toward the financing of their I» it any wonder, then, thot our !?Si?*.'y™f; "l ~«=^*" '»■■ "« «>* *■
benefiu have been u»«d In way, other country's present and former employ- S^;^ iS", SlS^.h!-' ^,2'^i,"f
than those Intended or promised t«, fear the w,.nrt. This amendiieit ^^T^^TlttS^K^^THl^
mder the statute etrtablishing that places the Federal employees' truet toaster c.u««i' br Jl«xi. cr^LiA moitoT
nmo. fund on the same footing as the Soda] or anugnt:
It wax riKht for them to take offense Security trust fundu, as a backstop for fl» The Secretirr shall reimburie »och
last year when the dvil service fund the benefits of the rtst of the Kattoa't rumen or ranchers in an amount which
WW the flrrt tapped— even before employees. It is the least we can do. It ""o*" '*>' exceed 80 Dtreent of the cost of
Social Security disinvestment— to ke«p Is the right thing to do. Our Federal ""^ TaMponatlon <but not to uceed KD
the Nation solvent during the 1986 workers deserve It. ^Y^' .
debt oeOiM eriala Mr. HEINZ. Mr. President, I am ad- y^l^\?'^S^y,^J^. T '•'l??-
GAO determined that such raids by vised that th«« is no objertion to the SSf CoJpomioL * Comnwdit,
the Department of Treasury has Uwt amendment on this side. sac Section Jjcbxi) of PubUc Law »-
the dvil service retirement and disabil- The PRESIDING OFFICER. Is W Is amended by i%irlin% -^0 percent of
ity IrUDt fund interest earnings \k- there further debate on the amend- the projected payment rate ' ud iDsertlnc
cause "TreaKury did not follow its e«- ment? If not, the question is on agree-
ing to the ampndment
The amendment (No. 2263) was
agreed to.
tabUshed fuixl management proce
dures." GAG'S investigation deter-
mined that Treasury delayed invest
ment of fund receipts, prematurely re-
devraed some fund securities, and
In Ueu thereof "lOO oerceot of the orojccted
payment rate~.
Sec . It is the sense of Congress that
with rwpect to farm and ranch borrowpm
move to reconsider the vote by which
"took other unusual actions in an at- the amendment was agreed to.
tempt to manage the government's fi'
nances.^
The lo«ses total %U\Mi,wyi.
Rscal yean
1»S4 I6U21.813
1»S5
1»S«
Mr. HEINZ. I move to lay that
motion on the table.
The motion to lay on the table was
agr««d to.
Mr. HEINZ. Mr. President, I suggest menu and foreo foreclosures In cases "here
TV.231.1U the absence of a quorum. '"**' '"™ *""' ^^nch bortowen ait unable
S.OM The PRESIDING OFFICER. The ^ "'**' '°*^ payments in lull due to no
1M«-
<1) the Secretary of Aj^rlculture 9hould ex-
ercine the authority pr\>Tided under wcHon
33LA of the Corsu^Udaxed Farm and Rural
Development Act and Instruct Che rarmers
Home Ad/ntnlstr^don tn defer loan repay-
faull of their own: aitd
(3) the lending Instirutiona of the Farm
Credit System and cotnmerrUl lending insti-
tutioDs are encouraged, insolar ai pracCica
ble. to adopt lenient Icndina. forbearance.
and foreclosure pollciec. and to the maxi
mom extent povfble porttcipfttc and cooper-
ote with Pcderal and State lenders In aadat-
ance programs, Mih respect to such borrow-
er? who are under flnan<dal atrem due to no
fault of their own.
Mr. ABDNOR. Mr. Precldenl. I
think both managers here on the floor
are well aware of this amendment. I
The amendment that Senator Eaols- clerk wO] call the roU.
Toil and I pn>pose would acknowledge. The assistant legislative derk pro-
iz2de«d would preserve, the sanctity of ceededtccall the roll-
those contributions that these employ- Mr. HETNZ. Mr. President, I ask
•es have made toward their retire- unanimous consent that the order for
ment. the quorum caU be rescinded.
By treating these contributions and The PREHIDING OFFICER. Wlth-
the Govemmenfj share of retirement out objection, it is so ordered,
pension costs as usable only for the Mr. HEINZ. Mr. president, I ask
payment of dvU service retirement unanimous consent that Senator Hol-
and disability b^efits. the Congress taxis and Senator GitasstfT be added
win be restoring the confidence *>^^* as cosponsor« to the pending amend-
has tindergone severe strain over the ment No. 3362.
past few years. The PRESIDING OFFICER. With- discussed It earlier as a possible
CoDgresa has been active In Federal out obieetioa. it is so ordered. amendment to the Sasser amendment,
employee retirement. There have been ^'If- HEINZ. Me. President, I ask It was determined at that time to
a never-ending stream of proposals unanimous consent that we temporart- propose my amendment as a standing
from the administration to cut Federal ^ ^^ aside the pending amendment to amendment.
employee beneflta. particularly dvil consider an amendment to be offered I ask immediate consideration of the
service retirement In (act. Congress ^ ^^^ Senator from South Dakota.
baa fcnmd It neoeeearT to suspend or "^^^ PRESIDING OFFICES. With-
modUy ccst-of-Urlng adjustmentc in out objection, it is so ordered,
response to serious Hscal ococems. **r- ABDNOR. Mr. President, 1 ^
New Federal employees have been thank the Senator from Pennsylvania, and the flooding during 1986. In terms
oovertd by Social Security, an event uomcon iro. tic-i of dollars it is quite minor.
that Federal retlrets and employees Mr. ABDNOR. Mr. President. I send Mr. PRYOR. Mr. President, reserv-
had long feared would merely be a pre- an amendment t« the desk and ask for Ing the right to object, it is my under-
text (or seizing the assets of the dvU Its Immediate consideration. standing that the Senator from South
•etvfce retirement toiut fund to rein- The PRESIDING OFFICER. The Dakota Is offering an amendment that
foroe the (iuaodng of Sodal Security, amendment win be stated. he discussed earlier in this day relative
Although it ivas not Congress' The legislative derk read as follows: to drought spedfloUy related lo
Intent, the Social Security ameDd- Tbe Senator from South Dakota (Mr. South Dakota.
ments did require Congress to develop AscnoiO proposes an amendment nimibered Mr. ABDNOR. Tes, and the flood as
• complete new retirement plan for 23*^ weU. It may seem unusual but It is poc-
Pederal employees, while that work la Mr. ABDNOR. Mr. President. I ask sible in South Dakote to have a flood
completed, and those of u« who par- unanimous consent that the reading oI In the East and a drought in the West
tjclpated in that development arc the amendment be dispensed with. Mr. prtOR. Let me say to my dis-
proud ot that achievement Federal The PRESIDING OFFICER. With- tlngulshed friend from South I>akoU
employees and rcOreet are under- out objection, it is so ordered. It Is my nnderstancttng at this point
■tfanrtahly anxious that tbetr retire- The ameodmest is as follows: there are Members on this side, or at
ajnendment.
L«t me tM.7 this for those who were
not here: This amendment coven the
drought in South Dakota diirtng 1986
519
Mr. Mica. Thank you, Mr. Bachus.
Mr. MORAN. Mr. Chairman, could I just make a quick comment
on that?
Mr. Mica. Yes, you may.
Mr. MORAN. Thank you. I just wanted to mention and emphasize
the fact that this poUcy was requested by President Reagan's Sec-
retary of the Treasury and enacted by President Reagan. In that
legislation that he enacted, it guarantees that those funds will be
fully reimbursed, and this is exactly what was envisioned by that
legislation. So I just wanted to add that.
Mr. Bachus. If I could respond to the gentleman from Virginia.
Mr. Mica. To be fair to the other panelists, and rather than get
into debate at this time, it is the custom of the subcommittee to
go through the panel and then come back.
Mr. Bachus. But I would love an opportunity to discuss that
with you. There are several misconceptions about that, and that's
one of them. I would be glad to go through the record with the gen-
tleman and tell you that we could debate that. We might come to
different disagreements, but I think we all agree the money
shouldn't be used as it's being used. It's a retirement fund.
Mr. Mica. Well, I allowed the ranking member to comment and
you to respond.
Mr. Bachus. And I'm not sure Federal employees care how it
happened.
Mr. Mica. We will come back to this later. It is a bone of conten-
tion and it needs to be discussed, but at this point I am going to
yield. We have all afternoon. There are no votes into dinner.
We will now recognize Mr. Hoekstra, who chairs the Oversight
and Investigations — wait a second. I apologize. It's alphabetical,
and it's Mr. Calvert.
Were you sworn in beforehand?
Mr. Calvert. No problem.
Mr. Mica. OK. Well, I want to be perfectly fair.
Mr. Calvert, alphabetically, who chairs the Resources Commit-
tee's Subcommittee on Energy and Mineral Resources, you are rec-
ognized for 5 minutes.
Mr. Calvert. Thank you, Mr. Chairman. Before I read my testi-
mony, I have some additional documents I would like to submit for
the record.
Mr. Chairman, distinguished members of the subcommittee,
thank you for the opportunity to testify today on the issue of which
government services employees should be considered essential dur-
ing a Federal Government shutdown. Like every Member of Con-
gress, I have heard the gamut from my constituents, from the no-
tion that all or nearly all Federal employees are not essential in
their day-to-day lives to the view that most everyone is necessary
to the Federal Government's operation. I think it's obvious the an-
swer probably lies somewhere in between, but just where?
Your hearings on this matter are useful to those who are truly
interested in streamlining the government to a workable size, when
it is up and running, let alone when a limitation on appropriated
funds causes a so-called "shutdown."
Let me add, Mr. Chairman, that this is not hollow rhetoric for
me, for, in a sense, I've given at the office. By this I mean, as chair-
520
man of the Subcommittee on Energy and Mineral Resources of the
Committee on Resources, I chair the authorizing panel for no less
than six Federal bureaus or parts thereof: the U.S. Geological Sur-
vey, the Bureau of Mines, the Bureau of Land Management, the
Minerals Management Service, the Office of Surface Mining, and
Geology and Minerals program areas of the U.S. Forest Service.
However, as of January 8, 1996, the U.S. Bureau of Mines will
cease to exist, albeit a small fraction of its former budget authority
to transfer to the USGS and DOE. Mr. Chairman, I'm not crowing
about this accomplishment. In reality, it's a manifestation of the
appropriation process, but I'm realistic about prioritizing budget
needs and understand the pressures of the Secretary of the Interior
to choose not to defend this agency when faced with cuts of the
magnitude required this fiscal year and for many years to come. So
my subcommittee's turf has been impacted, as will many others as
our reforms prevail.
As to the issue of essential services during shutdown periods, I
would like to simply highlight a few instances which I'm familiar
with, from the perspective of the Energy and Mineral Resources
Subcommittee jurisdiction. One of the agencies I mentioned earlier,
the Minerals Management Service, or MMS, trails only the Inter-
nal Revenue Service and possibly the U.S. Customs Service as a
net revenue source for the Federal treasury.
Why? Because the MMS is the collector of some $4 billion annu-
ally in mineral royalties for Federal and Indian lands and the outer
continental shelf, the OCS. It is my understanding the shutdown
last month did not prevent the MMS from collecting royalties,
much of which is done by electronic funds transfer today.
But another job of MMS is to permit OCS drilling operations,
and, of course, if such permitting is stalled, then so is the potential
for discovery and production of oil and gas that is the source of
those billions of annual revenues, not to mention the hundreds of
thousands of dollars per day of idle rig costs for lessees awaiting
a permit.
I am aware of one instance involving a small independent pro-
ducer who was delayed startup production for several days. While
this may not be a significant loss to the Federal Government, be-
cause the royalty interest will eventually be recovered, for a small
businessman the cash-flow impact is a significant interruption of
his ability to conduct business.
I have asked Secretary Babbitt to provide me with copies of Inte-
rior Department guidance for bureaus engaged in energy and min-
eral resource activities so the subcommittee might review the ade-
quacy of shutdown plans, especially from the health and safety
viewpoint, but also from the environmental and Federal revenue
generation angles.
Let me add, Mr. Chairman, that I'm actively pursuing royalty
fairness legislation to amend Federal mineral leasing laws to allow
States to enter into agreements with the Secretary of the Interior
to take on additional royalty collection duties with their borders
and some "upstream" activities that the Bureau of Land Manage-
ment, or BLM, currently does with respect to lease inspection and
enforcement.
521
During the recent shutdown, an onshore oil and gas lessee in
New Mexico encountered a situation concerning loss of drilling
fluids downhole and possible contamination of freshwater aquifers
while awaiting necessary approval of emergency measures. But no
one was at home at the BLM office, no one. Ultimately, the lessee
took the responsible action to prevent contamination but was left
in a position of begging forgiveness rather than asking permission.
In support of my bill as part of the Balanced Budget Act, a bipar-
tisan coalition of 10 western Governors has written to President
Clinton strongly urging that royalty fairness provisions, which
would allow but not require broader participation by these States,
should remain in a negotiated balanced budget. In other words, the
agenda of the 104th Congress to empower the States is alive and
well in Chairman Don Young's Committee on Resources, including
within my subcommittee.
Mr. Chairman, let me provide another example of the November
shutdown effect upon issues in my subcommittee's purview. A min-
ing company attempting to permit a proposed expansion of an ex-
isting mining operation on public lands through the local BML of-
fice in Battle Mountain, NV, has basically been told that the 4y2-
day furlough of nonessential employees will mean a delay of an ad-
ditional month or more for the review and sign-off on a third-party-
prepared EIS.
The plan of operations has been pending since October 1992,
which a construction work force of 175 people and an increase of
permanent mine employees of 75 to 100 wait and wait. But the
shutdown of BLM was the rationale for yet another slippage of the
expected EIS completion data, at a rate of 6 days delay for each
day of furlough. Our subcommittee will ask for explanation of this
behavior, because it sounds as if the BLM employees consider the
government effectively shut down, whether or not it technically is.
In summary, Mr. Chairman, I am dedicated to trimming the size
and scope of the Federal Government, including those agencies
under my subcommittee's jurisdiction. I stand ready to aid your ef-
forts to better determine essential versus nonessential services and
employees for programs we oversee, in the event of subsequent
shutdowns of the Federal Government, should they become nec-
essary.
This ends my prepared remarks. I have several documents, as I
mentioned, I would like to submit for the record, and I look forward
to answering your questions.
Mr. Mica. Without objection, they will be made a part of the
record.
[The prepared statement of Hon. Ken Calvert and the informa-
tion referred to follow:]
522
Statement
of
The Honorable Ken Calvert
Chairman, Subcommittee on Energy & Mineral Resources
Committee on Resources
at the
Oversight Hearing
on
Essential Services During Federal Government Shutdowns
before the
Committee on Government Reform and Oversight
Subcommittee on Civil Service
December 14, 1995
Chairman Mica, and distinguished Members of the Subcommittee, thank you for the
opportunity to testify today on the issue of which governmental services and employees
should be considered "essential" during a federal government "shutdown".
Like every Member of Congress, I have heard the gamut from my constituents: from the
notion that all, or nearly all, federal employees are non-essential in their day-to-day lives to
the view that most everyone is necessary to the federal government's operation. I think its
obvious the answer lies somewhere in between, but just where? Your hearings on this matter
are useful to those of us truly interested in streamlining the federal government to a
"workable" size when it is "up and running" let alone when a limitation on appropriated
funds causes a so-called shutdown.
And let me add, Mr. Chairman, that this is not hollow rhetoric with me, for in a sense, I
have "given at the office." By this I mean, as Chairman of the Subcommittee on Energy and
Mineral Resources, of the Committee on Resources, I chair the authorizing panel for no less
than six federal bureaus or parts thereof: the U.S. Geological Survey, the Bureau of Mines,
the Bureau of Land Management, the Minerals Management Service, the Office of Surface
Mining, and the Geology and Minerals program area of the U.S. Forest Service. However,
1
523
as of January 8, 1996, the U.S. Bureau of Mines will cease to exist, albeit a small fraction
of its former budget authority is to transfer to the USGS and DOE.
Mr. Chairman, I'm not crowing about this accomplishment. In reality, its a manifestation of
the appropriations process. But I am realistic about prioritizing budget needs and understand
the pressures on the Secretary of the Interior to choose not to defend this agency when faced
with cuts of the magnitude required this fiscal year and for many years to come. So my
subcommittee's turf has been impacted, as will many others if our reform efforts prevail.
As to the issue of "essential services" during shutdown periods, I'd like to simply highlight a
few instances of which I am familiar from the perspective of the Energy & Mineral
Resources Subcommittee jurisdiction. One of the agencies I mentioned earlier, the Minerals
Management Service, or MMS, trails only the IRS and possibly the U.S. Customs Service as
a net revenue source for the federal Treasury. Why? Because the MMS is the collector of
some $4 billion annually in mineral royalties for federal and Indian lands and the Outer
Continental Shelf - the OCS.
It is my understanding that the shutdown last month did not prevent the MMS from collecting
royalties, much of which is done by electronic funds transfer today. But, another job of the
MMS is to permit OCS drilling operations. And, of course, if such permitting is stalled,
then so is the potential for discovery and production of the oil and gas that is the source of
those billions of dollars of annual revenues, not to mention the hundreds of thousands of
dollars per day of idle rig costs for lessees awaiting a permit. I am aware of one instance
involving a small independent producer who was delayed start-up of production by seven
days. While this may not be a significant loss to the federal government because the royalty
interest will eventually be recovered, for a small businessman the cash flow impact is a
significant interruption of his ability to conduct business.
I have asked Secretary Babbitt to provide me with copies of Interior Department guidance for
524
bureaus engaged in energy and minerals activities so that the Subcommittee might review the
adequacy of shutdown plans, especially from the health and safety viewpoint, but also from
environmental and federal revenue generation angles.
Let me add, Mr. Chairman, that I am actively pursuing "Royalty Fairness" legislation to
amend federal mineral leasing laws to allow States to enter into agreements with the
Secretary of the Interior to take on additional royalty collection duties within their borders
and some "upstream" activities that the Bureau of Land Management, or BLM, currently
does with respect to lease inspection and enforcement. During the recent shutdown an
onshore oil and gas lessee in New Mexico encountered a situation concerning loss of drilling
fluids downhole and possible contamination of freshwater aquifers while awaiting necessary
approval of emergency measures. But, no one was at home in the BLM office, no one.
Ultimately the lessee took the responsible action to prevent contamination but was left in the
position of "begging forgiveness" rather than "asking permission."
In support of my bill as part of the Balanced Budget Act, a bi-partisan coalition of ten
western governors has written to President Clinton strongly urging that the Royalty Fairness
provisions, which would allow - but not require - broader participation by these States,
should remain in a negotiated balanced budget. In other words, the agenda of the 104th
Congress to empower the States is alive and well in Chairman Don Young's Committee on
Resources, including within my subcommittee.
Mr. Chairman, let me provide another example of the November shutdown effect upon issues
in my subcommittee's purview. A mining company attempting to permit a proposed
expansion of an existing mining operation on public lands through the local BLM office in
Battle Mountain, Nevada, has basically been told that the four and one-half day furlough of
nonessential employees will mean a delay of an additional month or more for the review and
sign-off on a third-party prepared EIS. The plan of operations has been pending since
October, 1992, while a construction workforce of 17S people and an increase of permanent
525
mine employees of 75 to 100 people wait and wait. But, the shutdown of BLM was the
rationale for yet another slipping of the expected EIS completion date, at a rate of six days
delay for each day of furlough! Our subcommittee will be asking for explanations of this
behavior, because it sounds as if the BLM employees consider the government effectively
"shutdown" whether or not it technically is.
In summary, Mr. Chairman, I am dedicated to trimming the size and scope of the federal
government, including those agencies under my subcommittee's jurisdiction. I stand ready to
aid your efforts to better determine "essential" versus "nonessential" services and employees
for programs we oversee, in the event of subsequent shutdowns of the federal government
should they become necessary.
Mr. Chairman, this ends my prepared remarks. I have several documents to submit for the
record which support the testimony I have presented. I appreciate the opportunity to appear
before you today and would be happy to answer questions you may have.
GEORGE MILLER, CALtFORNIA
DEMOCRATIC MEMBER
526
). J^ouit of i^epresientatibe£(
Committee on iftegourtesf
?B@a2t)ington, BdC 20515
December 12, 1995
The Honorable Bruce Babbitt
Secretary
Department of the Interior
1849 C Street, NW
Washington, DC 20240
Dear Mr. Secretary:
This letter serves as follow-up to phone contacts made last week by my staff to the legislative
affairs staff of the Office of Surface Mining, Reclamation and Enforcement, the Minerals
Management Service, and the Bureau of Land Management. The purpose of the inquiries
was to obtain information from those bureaus concerning directives issued for the federal
government shutdown November 13 - 20, 1995.
As you well know, companies operating under the jurisdiction of federal agencies are
required to obtain approvals for standard and emergency operating procedures. It has come
to my attention that an incident occurred during the shutdown which would qualify as an
emergency operation, with threat to life or property, for which the operator was unable to
obtain a timely or a final approval. In my view, these types of situations require immediate
attention in order to minimize damage to human health or the environment, and timely
approvals by the appropriate federal bureau are a necessary step toward that end.
In addition, I am aware of significant costs incurred by industry due to lack of personnel
available to approve permits and other operational procedures. Such economic losses for
those smaller companies with limited cash flow and resources may take months or years to
recoup, if ever. I am aware of one case in which an independent oil producer was delayed
starting production by seven days, which resulted in a deferral of revenues for the company
and the federal government. It is my understanding that royalty collections continued
uninterrupted during the federal shut-down. Although I fiilly support the government's right
to collect what is rightfully owed the American taxpayer, I strongly urge you to allow these
companies to operate so that future royalty streams are brought on-line without interruption.
527
I respectfully request full disclosure of all shut-down directives which delineate which energy
and minerals activities within the Department will continue during a shut-down. I am
specifically interested in the operational and emergency procedures and if any of these
activities were coordinated with state authorities. Please include any changes made in
response to lessens learned during the shut-down period in November.
KEN CALVERT
Chairman, Suix»mmittee on
Energy and Mineral Resources
528
United States Department of the Interior
MINERALS MANAGEMENT SERVICE
WutuKfton. DC J0240
AUG 2 8 !?r=
Deputy Assistant Secretary - Human Resources
/S/ Cynlhia QuorioinidH
Director, Minerals Management Service
Emergency Shutdown Plan for Minerals Management Service
(MMS)
Attached is a listing of Headquarters and field employees who
have been determined by management to be essential on a
continuing basis for activities related to the protection of life
and property or, essential on an interim basis to conduct an
orderly shutdown of the MMS (Attachment 1). A list of on call
employees is also included.
Specifically, essential Offshore employees will ensure drilling
and production operations safety on the Outer Continental Shelf.
Royalty Management employees will oversee termination of contract
activity, shutdown of the computer center, and shutdown of the
wide and local area networks. Both program areas are engaged in
developing strategies for carrying out implementation plans at
their respective locations. Administration and Budget is working
closely with the Program managers in dealing with administrative
issues, such as, contract services and personnel functions.
Administration and Budget employees will also deal with a myriad
of essential shutdown responsibilities including shutdown of
computer operations; notifying employees and processing personnel
actions; running financial reports and securing sensitive files;
building and property security, etc. for the Headquarters
contingent.
Employees who have been designated as essential will be notified
of their designation. Furlough notices will be prepared in
advance and be ready for immediate issuance upon notification of
the shutdown as outlined in our attached Agency checklist
(Attachment 2) .
Mr. Robert Vayda, Chief, Staffing and Classification Branch, and
Mr. Robert Pope, Chief. Support Services Branch, will ensure that
the appropriate shutdown of Bureau administrative and security
functions, during the interim period, are carried out efficiently
and effectively.
If there are any questions regarding this information, please
call Debbie Brown, Personnel Officer, on (703) 787-1423.
Attachments
529
Modification to Minerals Management Service Shutdown Plan
The Minerals Management Service will retain four additional people on a continuing
basis for activities relating to the protection of property. These activities will allow for
the receipt and expeditious deposit of all monies sent to the Royalty Management
Program. These monies include funds to be deposited into the Treasury and into
Indian Trust Fund accounts.
In addition, the Minerals Management Service will retain one additional person on an
interim basis to coordinate the bureau's shutdown operations. If the shutdown exceeds
one week, this person will be retained further on an on-call basis.
530
Attachment 1
MINERALS MANAGEMENT SERVICE LIST OF ESSSKTIAL EMPLOYEES
POR 19 9 S SHUTDOWN PURPOSES
Employees are listed below in three categories:
1. Essential, on a continuing basis, for activities related to
the protection of life and property.
2. Essential, on an interim basis, to conduct an orderly
shutdovm.
3. On call during the shutdown.
1. EMPLOYEES ESSENTIAL. ON A CONTIWUINO BASIS. FOR ACTIVITIES
RELATING TO THE PROTECTION OP LIFE AND PROPERTY.
Offshore Minerals Managefflsnt
(pii1f of Mexico OCS Region
Houma District
District Supervisor (Michael Saucier)
-to ensure drilling and production operations safety
T.afavette District
District Supervisor (Joe Gordon)
•to ensure drilling and production operations safety
Lake Jac)cflon District
District Supervisor (Ed Smith)
•to ensure drilling and production operations safety
New Orleans District
District Supervisor (Lars Herbst)
-to ensure drilling and production operations safety
Pari fie OCS Region
Santa Maria District
District Supervisor (Phil Schroeder)
-to ensure drilling and production operations safety
Camarillo District
District Supervisor (Rishi Tyagi)
-to ensure drilling and production operations safety
Bsaential for Continuous Operation - Total i C
531
•». KMPLOYEES BSSENTIAL. OK AM INTKRIM BASIS. TO CONDUCT AK
yRPgRLY SHtrrPOWH.
Office of th« Director
Aseistant to the Director (Robert Middleton)
-to prepare the Director's files for storage
Office of AdmlniBtratlon asd Budget
Information Resources Management Division
Computer Specialists (Michael Blackwell, Larry Pease)
-to shutdown computers at Herndon and MIB, respectively
personnel Division
Chief, Staffing and Classification Branch (Robert Vayda)
-to direct the orderly notification of employees and
processing of personnel actions
Personnel Assistant (Terry Ballard)
-personnel activities related to employee notification
-personnel support activities related to the processing of
actions
Financial Management Diviaion
Chief I Accounting and Reports Section (Deborah Sykes)
Systems Accountant (Marllou Barros)
-to run trial balance and other necessary ABACIS reports
-to secure all Sensitive files
Management Services and Security Division
Chief, Support Services Branch (Robert Pope)
-to provide for building security, property, and facilities
management
Southern Administrative Service Center
None
Western Administrative Service Center
Computer Specialist (Larry Turner)
-to complete shutdown operations for the WASC LAN/WAN
Contracts Officer (Linda Bell)
-to terminate contracts of contractors performing RMP
operations, if needed
532
A.la9ka Administrative Satellite Office
None
California Administrative Satellite Office
None
Offshore Minerals Hanageaent
HeadoTjarters
Chief, Microcomputer Support Services, OMS (Patrick Maloney)
-to shutdown Offshore LAN
^^laska PCS Region
Computer Specialist (Jean Payne)
-to shutdown computer operations
Gulf of Mexico PCS Region
New Orleans District
Computer Specialist (Michelle Griffitt)
-to shutdown computer operations
Pacific PCS Region
Camarlllo District
LAN Coordinator (Barbara Pryor)
-to shutdown computer operations
Royalty MaBageDent
gystems Management Dlviaion
Chief, Contract Management Branch (Steve Spizale)
-to oversee termination of contractor activities and coordinate
orderly shutdown of the computer center
Technology Planning Branch (Jim May and Alene Markoff )
-to oversee the ordterly shutdown of wide and local area
networks
Essential (Interim} for shutdoim
of non-aasential operations • Totali 17
533
? . <?V CALL DTOINQ THg SmTTDOWW.
Office of Adainistration and Budget
Management Servicea and Security Division
Chief, Support Services Branch (Robert Pope)
-to provide for building and property security
gouthem Administrative Service Center
Manager, Southern Administrative Service Center (Carl Sigler)
-to handle any emergency situations
Western Administrative Service Center
Manager, Western Administrative Service Center (Jan Fletcher)
-to handle any emergency situations
Offshore Minerals Manageaent
Headquarters
Aaaociate Director for Offshore Minerals Management
(Tom Gernhofer)
-to handle any emergency situations
Deputy Associate Director for Offshore Operations
(Hank Bartholomew]
-to coordinate emergency communications between Regions and
Headquarters
Alaflka PCS Region
Regional Director, Ala8)ca OCS Region (Judy Gottlieb)
-to handle any emergency situations
Qulf of Mexico OCS Region
Regional Director, Gulf of Mexico OCS Region (Chris Oynes)
-to handle any emergency situations
Regional Supervisor, Field Operations (Don Howard)
-to oversee required activities,- to coordinate emergency
communications between Districts and Region,- and to provide
necessary approvals of lessees' and operators' requests
534
irlfic PCS Region
Regional Director, Pacific OCS Region (Lisle Reed)
•CO handle any emergency situations
Regional Supervisor, Field Operations (Thomas Dunaway)
•to oversee required activities; to coordinate emergency
communications between District and Region; and to provide
necessary approvals of lessees' and operators' requests
Royalty Manageaent
Associate Director for Royalty Management (James Shaw)
-to handle any emergency situations
On-call for emergency situations - Total i 11
535
United Stales Department, of the interior
BUREAU OF \M\) MANAGEMENT
WASHINGTON. DC 20240
SEP 2 6 1995
Mcmocandum
To: State Directors
Senice Center Direcror
Director, NIFC
Dir^cor, National Training Center
From: ^fe Director rj\^iOJJ^i*LL ^ ^^^^% OW-^i-^~^
Subject: Contingency Plan for Possible Shutdown of Government Functions: Update and
Clarification
This memorandum provides additional guidance and clarification concerning the "Contingency Plan
for Possible Shutdown of Government Functions: Update and Qarificaaons" (dated August 51,
1995), ^hich ^vas transmitted to you earlier. Ir generally reflects the informacion verbally relayed to
the Executive Leadership Team and to Bureau personnel officers and budget staff chiefs in conference
calls last week.
As of this writing, the conference committee has completed action on FY 1996 appropriations for the
Department of the Interior and Related Agencies. The conference committee reports and the bill have
gone back to the House and Senate floors for debate this week. The bill contains a number of
troublesome provisions, and outcome of floor debate and Presidential approval arc uncertain.
Discussions between the White House and the Hill continue on the content of a continuing resolution
that would continue government operations until appropriations bills arc enacted and the major
budget issues are worked out. Agreement has not yet been reached on a continuing resolution.
There is still reason to hope that a shutdown can be averted. Employees should be advised to report to
work on October 2. unless otherwise advised between now and then. Wc appreciate the patience chat
our employees have generally shown in the face of a highly uncertain situation Wc also appreciate
that employees have concerns about a possible shutdown and furlough - especially about the
continuity of pay. In the past. Congress has always retroactively provided for pay during shutdowns
(although that does not guarantee that they would do so in the future)
However, there are MANY uncertainties about pay, etc. </we have a shutdown, //it is an extended
shutdown, and if the Congress doesn't provide for retroactive pay We simply do not have the answers
to questions about the almost limitless number of possible scenarios that migit occur Because of these
uncertainties, we need to continue to plan foe the possibility of a shutdown.
536
The Department has subinittcci its shutdown plan to OMB for review. If there is a shutdown, the plan
states:
most employees would work no longer than three hours,
written furlough notices will be issued;
where essential employees are not needed on a full-time basis, chey wjl be on-catl, and
specifically with regard to BLM,
" firefighting, law enforcement, dispatch personnel to respond to emergencies will
continue, and
— public rooms will he closed (specific siattmcnc).
The following modifications and additions arc made co the Contingency Plan, based on questions
received from employees and field officials, guidance received from the Department in the form of its
contingency plan, and further discussions.
POLICY RE-STATEMEXTS:
The general policy remains that a minimum number of 'essential' personnel should be
retained.
Where full-time services are not required employees should be on an on-call basis and
should work only the hours required to meet the cmergeney situation
SPECIFIC TOPICS:
Law tnfoTceTrum : Law enforcement activities will continue subject to the following
guidance.
— the Bureaus lead law enforcement official wJJ continue on duty,
— each State Special Agent-in-Chargc will continue on duty;
-- all rangers and special agents in :he fitld will continue on duty; and
— all other law enforcement personnel will be on call in the event of an cmL-rgcncy
situation requiring immediate attention
Alaska piptline operations: For health/safety reasons and because funding is exclusively
from non-Federal sources and the work is being done at a site not affected by the
shutdown, Alaska pipeline work will continue during a shutdown
Rtghl-of-^ay contracts and construction: Operation of rights-of-way, permits, leases, etc. by
the respective operator can continue during a shutdown, unless compliance issues exist
that may result in damage to governmental interests. These issues include public health
or safety and if BLM action is required during a shutdown, the office or the district should
determine if a Bureau employee should be identified as either essential or on-caLl to
provide necessary BLM inpur/prcscnce (sec BLM Manual at 2301.88).
If construction of rights-of-way, permits, leases, etc., require BLM presence during
construction as part of the terms of authorization, each office needs to:
O review the terms of the authorization.
® evaluate the potential impacts if BLM is not present and work continues, and
537
© decerminc if ii Bureau employee should be identified as either essential or on-calJ to
provide necessaty BLM input/ptescnce (This includes film pcrimcs where the
permit requires BLM presence during filming). See BLM Manual at 2S01.SS.
ALMRS Contract administration and contractor work on core ALMRS contracts will
continue This docs not include all IRM/modernization efforts; operations will be reduced
CO a minimum maintenance level.
Ti'nier tale admiisiitralion: Timber salt contracts will not be suspended during a
shutdown. Each office should make an assessment of the number of contracts that would
be active {road construction and harvest activities) and thcit relative comple.xicy and
environmental sensitivity (i.e., how often inspections would be needed). We would
anticipate the minimom number of contract administrators (authorized officers) should be
designated as essential personnel with another group being available on an on-call basis.
Not all contract administrators currently on board should be designated as essential, nor
would they necessarily have co work full time. A lis: of personnel and intended work hours
should be prepared in each district based on their contract situation. If any contract
administrators arc designated to only work part-time, they should otherwise be available on an
on-call basis to provide service if contacted by the purchasers.
Managers designated as essential personnel can serve as contracting officers for matters
(letters, modifications) beyond the authority of the authorized officer. The contract
administrators should also administer any active Special Forest Product permits.
Contract administracion generally: While non-emergency contracts arc not to be
administered durinij government shutdown, efforts should be made to mitigate contract
costs. For example, for contracts where funds have been obligated on a )ob basis, the
Contracting Officer/Contracting Officer Representative (COR) will determine, on a case-
by-case basis, if the contract can continue for a wttk or two without any quality assurance
and inspection If the contract requites frequent government inspection cither a suspend
work order (BLM Form 1510-6) needs to be issued, or, in the managet's or contracting
officer's judgment, significant claims for delay may result, project inspectors and CORs
may be considered essential or be available on an on-call basis. Another scenario occurs
where contract performance can continue up to a certain inspection point in the contract,
then an appropriate caveat should be inserted in the suspension notice. CORs may issue
the suspend work order(s) if delegated by the Contracting Officer in their designation.
New funding obligations should not be made, except those needed co protect safety, health
and property, such as HAZMAT emergency responses, fire protection, etc
Emergency fire rehabiliiatton: Emergency rehabilitation will be handled in the same manner
as other potential emergency situations such as hazardous materials incidents, i.e , a
limited number of essential employees will be on call co deal with emergencies.
Oil ujui gas program: Employees should be kept on call co witness well shuc-ms.
538
PERSONNEL AND PAY-RELATED QUESTIONS
Paychecks: Wc have been advised that: "... the Department of Treasury's Financial Manage-
ment Service and the Certifying Officers of the Payroll OpaatJons Division are prepared to
process any and all payroll actions submitted by your organizations for payment m fiscal year
1996 " Therefore, we can expect that paychecks will be issued on schedule on October 1 2
— Buyout payments : We anticipate that employees who are taking buyouts will be paid m the
usual time frame, .(^there is an extended shutdown, and (/Treasury no longer issues checks due
to a lapse in the debt limit (an extremely unlikely event), then it is possible that checks could be
delayed.
Employees in process ofchange-of-dury-starion travel (such as in temporary quarters)
Employees will continue to be in travel status (since the obligation has already been incurred
and there is not a practicable alternative)
Personnel on long-term training or details: There should be very few of these situations. As
a rule, employees in this situation should not return to their duty stations, based on the actual
situation and if it appears that an e.xtended shutdown is going to occur, additional guidance may
be provided.
Conference calls will be placed on Friday, September 29 with the ELT and Bureau persoimel ofDcers and
budget staff chiefs to provide the most current information available. An e-mail message will also be issued
late Friday afiemoon.
Questions or comments on this memorandum should be addressed to Bob Henry (202-452-7700). Jan Gamby
(202-208-7754), or Roger Hildebeidel (202-208-4864).
539
. .
'ESSENTIAL' FUNCTIONS AND PERSONNEL
BLK - WYOMING
OFFICE
pOPA-
TJON
fO$IT];9M
FUNCTIONS TO BE
PERPORlffiD
All District
Offices
Entire
period of
shutdown
Range Tach (Fire)
(Rawlins --
Newberry; Casper -
-Hicek-Hutton):
Supv Fire Mgt Spc
(Worland- -Warner)
Protection of lands
and buildings (Fire
Dispatch)
Employees on "on call" status:
--Firefighters and support personnel
--HAZMAT coordinators
Rock Springs
District Office
2 hours
dally. 5
days a
week
Maintenance
Worker (Wilmetti)
Care and feeding of
horses
2 hours
dally. 2
days a
week
Maintenance
Worker Forenan
(McDaraent)
Care and feeding of
horses
(On call Status
entire duration)
Detached Area
Offices
Duration
Area Manager
Activities related to
shutdown
-2-
540
'ESSENTIAL'
FUNCTIONS AND PERSONNEL |
BLM - WYOMING
PUSA-
FTOCTIONS TO ?E
pmcF
T7W
POSITION
fUTOf^f
All Offices
Stare of
All employees
Orderly shutdown of
Shutdown- -
operations :
finish of
--Secure confidential
shutdown
files; offices
activity
--notify outside
(appx 1
parties of closing
hour)
--secure building
--alert local fire &
law enforcement of
contacts during
closure
ScaC8 Office
Duration
State Dlxeccor or
Activities related to
representative
shutdown
4-8 hours
CoBputar Spec.
Shutdown and secure
(Varren) :
computer and
CoiEputer Operator
telecomnunieation
(Klindt); Tele-
systems
conusunicatlon
Spec . (Grahaa)
4-10 hours
Contracting
Shutdown of contracts
Specialist (3)
agreeaents , etc .
(K. Johnson,
Sehroft, Haestes)
4-6 hours
Budget Analyst
Activities related to
daily
(Amos)
protection of life &
property
Duration
Spec. Agent in
Protection of life &
Charge (Vernon)
property |
Officials on 'on-ci
ill" status;
ASSOC. Stat<
I Director (Kestarke
)
DSD , Support
: Services (Jessen)
Personnel Oi
"ficer (Babcock)
Property Mgi
;. Spec (Sullivan)
Fire Mgt. 01
IcT. (Eckert)
Law Enforceo
aent Agents (2)
All Districc
Duration
District Manager
Activities related to
Offices
or representative
shutdown
Duration
BLM Ranger (3)
Protection of life
(Stimson,
and property
Hurlock, Sauer)
541
MERIDIAN ©OL
December 11, 1995
The Honorable Bruce Babbitt
Secretary of the Interior
1849 C Street, NW
Washington, DC 20240
Dear Mr. Secretary:
Meridian Oil Inc. is seeking your assistance to prevent any recurrence of a problem we
experienced during the recent shut down of the federal government. During the
November shut down. Meridian was unable to obtain necessary approval of emergency
measures we could undertake to ensure our drilling operations did not contaminate
fresh water resources. If there is to be another shut down of the federal government, it
is critical that federal personnel be available to respond to unforeseen drilling or
operational problems that might endanger human health or the environment. We would
appreciate your assistance in ensuring that the Department of the Interior designate
sufficient personnel as essential and direct them to respond to unforeseen situations
that endanger human health and the environment.
Meridian is a large independent oil and natural gas producer with operations throughout
the western and southern United States. We were aware of the high likelihood of a
federal government shut down and tried to plan for it by obtaining approved permits for
new oil and gas drilling or well work-overs on federal lands in advance. These federal
permits specify how we will drill, set casing and complete a well. They also specify that
if a circumstance arises that requires a variation from the approved procedures, the
government must approve the variation prior to our making the change. The Bureau of
Land Management (BLM) and Minerals Management Service normally have personnel
available 24 hours a day to respond to any operational problems and provide
immediate approval of necessary changes. It was our understanding going into the
November shut down that if we encountered any operational problems, federal
personnel would be available to approve changes immediately because frequently such
changes are essential for safety, health, and/or protection of property and the
environment.
On November 15, 1995 (one day into the recent shut down). Meridian was drilling a well
on BLM lands 14 miles southeast of Carisbad on Burton Flats in Eddy County, New
Mexico. Like all the other wells in this area, we drill through numerous geologic
formations, including zones which may contain fresh water resources, to reach our
target formation. We ensure no migration or contamination of fluids between
formations by cementing in place our well casing (the pipe through which we run drill
bits to reach and produce petroleum from a formation). This process involves pumping
wet cement into the area between the outside wall of our pipe and the surrounding
rock. This is a well-established procedure which ensures absolute protection of the
groundwater.
In cementing the casing on this well, we rapidly discovered that the wet cement was not
circulating and filling the cavity between the pipe and rock, but rather disappearing
Meridian Oil Inc.. 2919 Allen Parkway PO Box J239 Houston Texas 77210-4239. Telephone 713-831-'600
40-190 97 - 18
542
Honorable Bruce Babbitt
December 11, 1995
Page Two
down the cavity and migrating into some unknown area. This is a relatively common
problem and does not damage property so long as immediate steps are taken to
prevent any potential contamination. Because the physical setting is different from one
well to the next, the necessary steps vary and cannot be prescribed in advance.
Pursuant to the terms of our permit, we called the BLM immediately to obtain approval
of appropriate steps to re-establish circulation and complete sealing the area around
the casing. Meridian called the BLM inspection and enforcement office in Hobbs, the
BLM Carlsbad Resource Area office and the BLM Roswell District office. The phones
rang in each of these offices but there was no answer, no answering service and no
message providing for emergency services. We finally called the New Mexico Oil
Conservation Division (a state agency) in Artesia to consult with them and try to obtain
their approval in lieu of BLM approval. They said this situation was not within their
jurisdiction. This left Meridian no choice but to proceed using our best judgment,
document our actions, and hope that when the BLM returned to work they would
approve our emergency measures. This seemed to be a better option than risking
potential contamination of a drinking water source.
At that time, we believed there were no BLM employees deemed "essential" and
working in the three offices we called. We have subsequently heard that there was at
least one employee in two of these offices but they were instructed not to answer their
telephones. In either case, Meridian believes that BLM did not meet their legal
requirement to maintain an operating capability sufficient to protect life and property.
Meridian would appreciate your assistance in ensuring that BLM and MMS maintain
sufficient personnel during a future shut down to respond to operating problems that
may threaten health, safety and the environment. More importantly, these personnel
must have procedures in place to respond to emergencies. It serves no public purpose
to have federal employees at wori< who do not answer their phones or have knowledge
and authority to respond to emergencies. Meridian plans to drill four more wells in the
Burton Flats area in the coming months and wants to be assured we will not have the
same problem if there is another federal government shut down.
Thank you for your attention to this matter. Please call me if I can provide further
information.
Sincerely yours,
Margie Taylor
Vice President, Federal Affairs
Rep. Joe Skeen
Sen. Jeff Bingaman
Sen. Pete Domenici
Rep. Ken Calvert
543
Decembers, 1995
Honorable Ken Calvert
Chairman
Sub-Committee - Energy & Mineral Resources
U. S. House of Representatives
Washington, D.C. 20515
Attn: Sharla Bickley
RE: Impact of Government Shutdown
Response to IPAA Information Request
In response to your December 6, 1995 request for negative impacts resulting from the
federal government shutdown during November 1995, Cockrell submits the following:
Eugene Island 33 #3 Well: OrS-r.-3S60
This recomputed well in federal OCS waters was not allowed to begin initial production
due to the MMS shutdown. The negative result was the deferral of over 300 BOPD for
one week. We estimate a gross revenue loss of over $50,000. Any questions may be
directed to me at (7 1 3) 750-93 1 1 .
Sincerely,
Lloyd H. Hetrick
Sr. Environmental, Health & Safety Engineer
/rl
xc: Craig A. Ward, IPAA
1600 Smith Streei. .Suite 4600 • Houston, Texa.s 77002-7348
Teleplione 713/6t1-1271 • Fax 713/651-8051
544
Congress of tfje iHniteb States
Bsatjinffton. SC 20513
November 17, 1995
The Honorable William j. Clinton
The President of the United States
IS 00 Pennsylvania Avenue, N.w.
Washington, D.C. 20500
Dear Mr. President:
Regardless of our differences of opinion on the causes of
and solutions to our current budgetary stalemate, we write to you
today to bring to your attention a matter of utmost urgency and
concern to the State of Louisiana, we wish to express our strong
support for the expeditious reclassification of additional
personnel at the Department of Interior Mineral Management
Service's (MMS) Gulf of Mexico (GOM) Regional Office as
"essential. "
The four employees currently designated as "essential" at
GOM MMS are unable to effectively process the 4 plans for
exploratory and development wells auid 25 plans for workovers ajid
reconditioning operations that customarily are filed every day by
Gulf oil companies. We estimate that approximately 32 additional
personnel are needed to handle these requests in a timely and
efficient manner.
MMS GOM performe vital oversight functions, as required by
law, to ensure appropriate protection of field operations,
environmental operations, and management for rigs working in the
Gulf of Mexico. Without MMS' legal consent, approximately 5000
people per week will be put out of work in Louisiana's offshore
oil fields at a cost of hundreds of thousauids of dollars per day
Gulf wide. This is clearly unacceptaible .
Therefore, we again urge you to immediately reclassify the
requisite number of MMS GOM personnel as "essential."
"H^^ac^
C>^<^'
545
CORTEZ PIPELINE GOLD PROJECT PERMITTING CHRONOLOGY
Months Time
0 Cortez Pipeline Project Plan of Operations submitted to BLM - October 1992
3 Public Scoping Meetings held - December 1992
12 First BLM hydrology review begins - September 1993
16 First BLM hydrology review finished - January 1994
21 BLM issues the draft EIS for public comment - August 1994
22 Second BLM hydrology review begins - September 1994
24 Public comment period ends - November 4, 1994
25 BLM adds requirement for Great Basin Spring Snail study - December 1994*
26 State BLM Director determines the DEIS can proceed to a full text final EIS,
requiring major changes and additions to the text - January 31, 1995
27 BLM orders an additional Native American consultation process - February 1995
28 BLM adds requirement for Burrowing Owl study - March 1995*
29 Second BLM hydrology review ends - April 1995
29 Third BLM hydrology review - April 1995
29 BLM requires additional Pit Lake/Water Quality review - April 1995
3 1 Third BLM hydrology review ends - June 1995
32 BLM indicates they will reject findings of additional Pit Lake/Water Quality review and
recommends fiirther study - July 1995
33 BLM establishes 10 items which Cortez must satisfy in order to complete the Final EIS
and obtain approval by January 2, 1996. In addition to further pit lake modeling, an
ecological risk assessment study and proposal for long term contingency funding are
required - August 1995
33 BLM provides written commitment to permit approval by January 2, 1996. Agreement is
reached between both parties to proceed with diligence - August 1995
35 Administrative review copies of the FEIS delivered to BLM District and State oflBces.
BLM estimates 6 day review time suggesting January 2, 1996 approval date is possible -
October 1995
36 BLM revises review time estimate to 15 days. Approval date delayed to January 19, 1996
-November 1995
BLM revises overall EIS compfeHon^TiP5?^?i'Sri^Sli86rtli!Rm^ citing agency policy
considerations, contract FEIS preparation time, and compliance review time. Approval
date delayed to March 25, 1996 - December 1995
Note * These studies completed and submitted to BLM
C:\WPWTN60\WPDOCS\95JLD\PPLCHRON.DOC
546
Cortex Pipeline Gold Pmject Permitting rhronologv rcontiniiMJ^
As you are aware, the Cortez Pipeline Mine Development Project is a proposed expansion of the
existing Cortez Gold Mine operation, and will include a new open pit mine, new mill, support
facilities, tailing disposal, and help leach facility. The development will be located between the
present Cortez plantsite fecilities and the Cortez Gold Acres Mine. The on-going operation
employs approximately 200 employees, and will be out of ore and shut down in the next 2-4 years
without this project. This expansion, when permitted, will:
1) Extend mine life for 12-13 years
2) Increase permanent employment by 75-100 employees
3) Employ a construction workforce of 175 people over a 15 month period
4) Over the 12-13 year mine life, expend the following:
a) annual payroll of almost $10 million
b) annual property taxes of approximately $1.3 million
c) annual payroll taxes of approximately $l.lniillion
d) annual Nevada net proceeds taxes of approximately $2.5 million
C\WPWIN60\WPDOCS\95rin\PPLCHRONJXX:
547
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549
Mr. Mica. I would like to recognize now my colleague, Mr. Peter
Hoekstra of Michigan, who chairs the Oversight and Investigations
Subcommittee of the Committee on Economic and Educational Op-
portunities.
You are recognized for 5 minutes.
Mr. Hoekstra. Thank you, Mr. Chairman. Thank you for allow-
ing me to testify here this afternoon.
With the government shutdown, and as chairman of the Over-
sight Subcommittee, we thought it would be appropriate to take a
look at how the Labor and Education Departments handled the
shutdown. Our findings raise serious concerns that the recent gov-
ernment shutdown was performed in such a way as to perhaps vio-
late certain law and in many ways had the appearance of a politi-
cal calculation.
If my only concern were political, my testimony would be more
tempered. But as you will see, this shutdown, coupled with the
public statements of the Secretary of Labor, Robert Reich, had the
effect of raising fear in the American workers concerning their safe-
ty. Additionally, financial strains were placed on State and local
educational agencies unnecessarily and perhaps illegally.
Let's take a look at what happened at the Department of Labor.
Secretary Reich decided that he would furlough nearly all of
OSHA's job safety inspectors. This would mean that Secretary
Reich must have determined that there was no reasonable likeli-
hood that the safety of human life or the protection of property
would be compromised in some significant degree by his decision,
according to the applicable law. That was his decision to make.
However, rather than reassure the public that these employees
are not necessary in some degree to the safety of human life. Sec-
retary Reich was quoted as saying, "In a peculiar twist, befitting
the interest of this Congress, we will be prohibited from carrying
on our normal duties to prevent tragedies in the workplace. We will
only be able to respond after these tragedies have occurred."
This quote directly contradicts with Secretary Reich's decision
not to have these employees excepted under the improvement
Antideficiency Act and only serves to create fear and confusion
among American workers. Simply put. Secretary Reich is in a catch
22. Either he furloughed these employees when he knew there
wasn't an imminent risk to human life, in which case he was jeop-
ardizing the safety of American workers, or he determined that
these furloughed OSHA inspectors were not essential to the protec-
tion of human life, in which case he was l3dng to the media by rais-
ing concerns about potential tragedies in the workplace.
What Secretary Reich did was wrong, and in the future he has
to correct it. In the future. Secretary Reich must either deem
OSHA employees as excepted or he must publicly reassure workers
that there is no imminent risk to human life by having these em-
ployees furloughed. Secretary Reich simply can't have it both ways.
We then took a look at what happened at the shutdown at the
Department of Education. Interestingly enough, nearly every pro-
gram of the Department of Education was suspended. However, be-
cause most of the department's programs are forward funded,
meaning that current payments to grantees, schools and students,
are made from funds appropriated in prior fiscal years. It appears
550
that the department irresponsibly, and possibly illegally, chose to
withhold funds that had already been appropriated by Congress,
signed into law by the President, and obligated by the States and
localities, mostly in fiscal year 1995.
These funding delays were unnecessary since the government's
shutdown should only have applied to operations lacking current
funding, in this case, those awaiting a fiscal year 1996 appropria-
tion. In more technical terms, this has the appearance of the im-
poundment of government funds by the executive branch.
In essence, the department held hostage 1995 education money
to force compromise on the 1996 appropriation, to increase the im-
pact of the shutdown on as many individuals and institutions as
possible, and, put simply, to further the Clinton administration's
agenda. This is unprecedented, unacceptable, and wrong. Because
of the Cash Management Improvement Act, which requires pen-
alties for late payments on prior obligations, the department may
have recklessly wasted education money on fines and penalties in-
stead of on educating our children.
Finally, let me also say that, as we consider legislation that will
improve or facilitate government shutdown in the future, that
those of us on the Education and Economic Opportunity Committee
are fully prepared that, when these measures come to the floor,
those changes in rules and regulations, as they apply to the Fed-
eral Government and as they apply to Federal workers, will also
be extended to workplaces and employees and employers in the pri-
vate sector.
We think that's consistent with the spirit of this Congress, where
those laws and regulations that apply to the private sector should
also apply to Congress, and we now think it's also appropriate that
it work in the reverse way. I have to tell you that a number of the
things that may be considered to alleviate the impact on Federal
employees or Federal operations would be illegal if people in the
private sector, employers or employees, tried to do those types of
things.
Thank you. That ends my testimony.
[The prepared statement of Hon. Peter Hoekstra follows:]
551
Government Shutdown II
Representative Pete Hoekstra
Chairman
Subcommittee on Oversight and Investigations
Committee on Economic and Educational Opportunities
Testimony Before Chairman John L. Mica
Subconunittee on Civil Service
Committee on Government Reform and Oversight
December 14, 1995
2:00 p.m.
2154 RHOB
552
Mr. Chainnan and Members of the Committee, thank-you for allowing me the
opportunity to testify before you this afternoon regarding the administrations planning and
implementation of the recent "government shutdown." As Chairman of the Oversight and
Investigations Subcommittee of the Committee on Economic and Educational Opportunities, I
am charged with ensuring that Departments and programs under the Committee's
jurisdiction:
• operate in an effective, efficient and economical manner;
• are in compliance with applicable law; and
• fulfill an "appropriate" federal role.
With this in mind, and after receiving some very serious complaints concerning the recent
shutdown of programs under our jurisdiction, our Subcommittee began a thorough
examination of the shutdown of the Departments of Education and Labor. Our findings raise
serious concerns that the recent government shutdown was performed in such a way as to
violate certain law, and in many ways, had the appearance of political calculation. I am
concerned that the motivation behind this decision was to protect the status quo and to slow
the changes being proposed by this Republican Congress.
If my only concern were political, my testimony would be more tempered. But as you
will see, this shutdown, coupled with the public statements of the Secretary of Labor, Robert
Reich, had the effect of raising fear in the American worker concerning their safety.
Additionally, financial strains were placed on state and local educational agencies
unnecessarily and possibly illegally.
Before getting into the details of these findings, let me briefly summarize the
applicable law concerning government shutdowns due to the lack of an appropriation.
Brief Background on the Applicable Law
The Antideficiency Act prohibits government officials from incurring obligations or
authorizing expenditures and contracts in excess or advance of appropriations unless
authorized by law. Certain activities are "excq)ted" from suspension and are therefore
authorized to continue during gaps in appropriated funding. These include:
1. providing for national security;
2. providing benefit payments and performing obligations under appropriations or
funding not subject to the delayed appropriation; and
3. conducting activities that protect human life and property.
The scope and applicability of this law is well briefed in memoranda and past
opinions of the Attorney Generals office -- commonly known as the Civiletti and Dellinger
Memoranda. I will not get into this legal detail now, but instead will review the committee's
findings concerning how the DqKutment acted during the Shutdown.
553
Shutdown of the Department of Labor
Secretary Reich furloughed nearly all of OSHA's job safety inspectors during the
recent government shutdown. This would mean that Secretary Reich must have determined
that there was "no reasonable likelihood that the safety of human life or the protection of
property would be compromised, in some significant degree" by this decision, according to
applicable law. However, rather than reassure the public that these employees are not
necessary "in some significant degree" to the "safety of human life," Secretary Reich was
quoted as saying,
"[in] a peculiar twist befitting the interests of this Congress, we will be
prohibited from carrying on our normal duties to prevent tragedies in the
workplace . . . [w]e will only be able to respond after these tragedies have
occurred."
This quote directly contradicts with Secretary Reich's decision not to have these employees
excepted under the Antideficiency Act and only serves to create fear and confiision among
American workers. At the same time, it wrongly implies that furlough decisions are in the
hands of Congress.
Simply put, Secretary Reich is in a catch 22 — either he furloughed these
employees when he luiew there was an imminent risk to human life — in which case he
was jeopardizing the safety of American workers — or he determined that these
furloughed OSHA inspectors were not essential to the protection of human life - in
which case he was lying to the media by raising concerns about "tragedies in the
workplace."
On November 29th, we sent a letter to Secretary Reich, signed by myself, Chairman
Goodling and Nfr. Ballanger, asking the Secretary to explain the contradiction in his furlough
decisions and his public statements, and to provide our Committee with background
documentation prq)ared by the Dq)artment concerning the furlough decision. On Monday of
this week, we received a response from the Department that failed to provide any of the
requested documentation and which made no attempt to reconcile Secretary Reich's public
statements with his furlough decisions. Instead, the Dq)artment "reinteipreted" the word
"imminent" by relying on the imminent danger clause of the OSH act ~ an interesting but
inappropriate response.
In short, Secretary Reich's response did little to alleviate my concern that furlough
decisions at the Dq)aitment were political ~ and targeted to groups that had vocal and active
constituencies. Secretary Reich's public statements and furlough decisions can only be
explained in political terms. This is wrong and must be immediately corrected ~ before we
are faced with another shutdown. In the future, Secretary Reich must either deem OSHA
employees as excq>ted or be should publicly reassure workers that there is no imminent risk
to human life by having these employees furloughed. Secretary Reich can not have it both
ways.
554
Shutdown of the Department of Education
Nearly every program of the Department of Education was suspended during the
recent government shutdown. However, because most of the Department's programs are
forward funded, meaning that current payments to grantees (schools, students, etc.) are made
from funds appropriated in the prior fiscal year, it appears that the Department irresponsibly
and possibly illegally chose to withhold funds that had already been appropriated by
Congress signed into law by the President, and obligated by the states and localities (mostly
in FY95). These funding delays were unnecessary since the government shutdown should
only have applied to operations lacking current funding ~ in this case, those awaiting a
fiscal year 1996 appropriation. In more technical terms, this has the appearance of the
impoundment of government funds by the Executive Branch.
In essence, the Department held 1995 education money hostage to force compromise
on the 1996 appropriation, increase the impact of the shutdown on as many individuals and
institutions as possible and put simply, to further the Clinton Administration's agenda. This
is unprecedented, unacceptable and wrong and because of the Cash Management
Improvement Act, which requires penalties for late payments on prior obligations -- the
Dq)artment may have recklessly wasted education money on fines and penalties instead of on
educating children.
We raised these concerns with Secretary Riley in a letter signed by Chairman
Goodling dated November 28th. This letter also requested background documentation
concerning the Secretaries furlough decisions. The Secretary responded promptly last
Friday, and included several documents that we had requested. Unfortunately, the
Secretaries response completely misstated the interpretation of the Antideficiency Act's
handling of alternatively funded programs -- specifically that such programs can continue
despite the lack of a current appropriation to ftind the administration of such programs.
Of even greater concern, is that the Department included in their response a letter
from their own General Counsel, Judith Winston, to the Attorney General asking Mr.
Dellinger to confirm the General Counsel's opinion that forward funded programs at the
Dq)artment of Education should not be suspended by the lack of a current appropriation.
Since no response from the Attorney General was included, and since no other
documentation concerning this opinion was provided, we are left to assume that the
Dq)artment of Education not only went against every recent interpretation of the
Antideficiency Act, but also went against, or ignored, the opinion of its own legal counsel.
This is unprecedented and raises serious concerns.
In conclusion, let me just say that this Committee is concerned that the intent of the
Antideficiency Act and the legitimate concern that the education of the American student and
the safety of the American worker may have been jeopardized for political purposes during
the recent shutdown. While we hope this is not the case, a preliminary review of the facts
surrounding the Departments' furioughs strongly suggests otherwise.
555
Mr. Mica. I thank you for your testimony.
We now have a Member of the freshman class steering commit-
tee, the distinguished Member from Arizona, J.D. Hayworth.
You are recognized, sir, for 5 minutes.
Mr. Hayworth. Mr. Chairman, I thank you. And, members of
the subcommittee, good afternoon. Thank you for inviting me to
testify today on the recent government shutdown.
My distinguished colleagues who preceded me and no doubt those
who will follow will provide you with their knowledgeable perspec-
tives on determining which government services are essential and
nonessential. So I would really like to focus on the underlying rea-
son why we experienced a government shutdown in November: sim-
ply stated, our efforts to reach agreement on balancing the Federal
budget. Most of the news coverage I saw of the shutdown focused
on its impact on Federal employees and on people who needed
passports or wanted to visit a national park, of which there are
several in the State of Arizona and, indeed, in the Sixth Congres-
sional District, which I represent. Although I'm very concerned
about people who depend on government services, I am equally con-
cerned about the consequences of failing to balance the budget and
restore fiscal responsibility to the budget process.
As we all know, over the past several decades, Congress has ac-
cumulated a national debt in excess of $4.9 trillion. Each year, the
average family of four pays approximately $2,650 in taxes just to
fund interest payments on the debt, and children born today will
pay over $185,000 in interest on the debt during their lifetimes, if
we fail to balance the budget.
During the 6 days that nonessential government services were
suspended, more than a few people were inconvenienced, and I cer-
tainly wish we could have avoided that. In fact, as we all know, we
could have avoided a shutdown if the President had not decided to
veto the continuing resolution Congress passed and presented to
him before the old CR expired. But, despite the inconvenience,
those 6 days produced one historic accomplishment. The President
signed into law an agreement to balance the Federal budget by the
year 2002.
Balancing the budget will provide tremendous benefits to the
American people. The lower interest rates that will result from a
balanced budget mean that families will spend less to buy a home,
.to send their children to college, or to purchase a car. Balancing
the budget will also boost our economic growth and result in the
creation of American jobs. But — and I believe this is most impor-
tant— it will free our children from the burden of paying our debts
and give them a genuine chance to achieve the American dream.
Mr. Chairman, over the long run, the effects of the government
shutdown will be mitigated. I believe the short-term problems the
shutdown caused are a worthwhile price to pay for the long-term
benefits of, at long last, finally balancing our Federal budget.
Thank you again for the opportunity to testify before the sub-
committee. I would be happy to answer any questions you have, al-
though I must note my presence on the floor is required in short
order. Again, I thank you, Mr. Chairman, and members of the sub-
committee.
[The prepared statement of Hon. J.D. Hayworth follows:]
556
Statement of the
Hooorabl« ID. Hay worth
Subcommittee on Civil Service
Committee on Oovenmiciit Rcfunn and Oversight
December 14, 1995
Mr. Chairman and members of the Subcommittee, I want to thank you for
inviting me to testify today on the recent government shutdown. I know that my
distinguished colleagues will be able to provide you with their knowledgeable
perspectives on determining which government services are essential and non-
essential. So I would like to focus on the underlying reason why we experienced
a government shutdown in November: our efforts to reach agreement on balancing
the federal budget.
Most of the news coverage I saw of the shutdown focused on its impact on
federal employees, and on people who needed passports or wanted to visit a
national park. Although I am very concerned about people who depend on
government services, I am equally concerned about the consequences of failing to
balance the budget and restore fiscal responsibility to the budget process. As we
all know, over the past several decades, Congress has accumulated a national debt
in excess of $4.9 trillion. Each year, the average family of four pays
approximately $2,650 in taxes just to fund interest payments on the debt, and
children born today will pay over $185,000 in interest on the debt during their
lives if we do not balance the budget.
557
During the six days that non-essential government services were suspended,
quite a few people were inconvenienced, and I wish we could have avoided that.
In ftict, as we know, we could have avoided a shutdown, if the President had not
decided to veto the continuing resolution Congress passed and presented to him
before the old continuing resolution expired.
But despite the inconvenieace, those six days produced a historic
accomplishment: the President signed into law an agreement to balance the federal
budget by 2002. Balancing the budget will provide tremendous benefits to the
American people. The lower interetit rates that will result from a balanced budget
mean that families will spend less to buy a home, send their children to college,
or purchase a car. Balancing the budget will also boost economic growth and the
creation of American jobs. But perhaps most importantly, it will free our children
from the burden of paying our debts, and give them a real chance to achieve the
American dream.
Mr. Chairman, over the long run, the effects of the government shutdown
will be mitigated. I believe the short-term problems the shutdown caused are a
worthwhile price to pay for the long-term benefits of balancing the budget. Thank
you again for this opportunity to testify before the iAibcoramittee, 1 would be
happy to smswcr any questions you have.
558
Mr. Mica. I thank the distinguished panel of Members, chairs of
various subcommittees, and the representative of our new class for
your perspective. What I might do, to be fair, is yield now to our
ranking member, who wanted to ask some questions of Mr. Bachus.
I think you two wanted to continue your exchange. I will give you
this opportunity.
So, Mr. Ranking Member, you are recognized for 5 minutes.
Mr. MORAN. I appreciate it, Mr. Chairman, but I think perhaps
we ought to get on to the next panel. I see Members who have been
waiting here, and rather than get into a repartee on the debt ceil-
ing, we probably ought to try to keep the hearing limited to the leg-
islation before us that would directly avert the government shut-
down and deal with legislative initiatives that we might be able to
mark up and get to the floor.
So I will pass on that opportunity, Mr. Chairman.
Mr. Mica. I thank the ranking member.
We have been joined by another member of our panel, the distin-
guished gentlelady from Maryland, Mrs. Morella.
Did you have any opening statement or questions of our panel-
ists?
Mrs. Morella. Thanks, Mr. Chairman. I would like to put an ex-
tended opening statement into the record.
Mr. Mica. Without objection, so ordered.
Mrs. Morella. I would just make a few comments. I agree with
the ranking member, too, that we want to also get into some of the
legislation that he sponsored, that Mr. Gekas has sponsored, that
I have cosponsored, and hear more about it. I, first of all, very
much value my colleagues' interest in the shutdown and what its
adverse implications have been, and maybe how we can resolve it.
I want to thank you, Mr. Chairman, for calling this hearing.
We've been talking about shutdowns for a good while now, and one
looms tomorrow evening. It's kind of easy to play partisan politics,
and Democrats can blame Republicans, Republicans can blame
Democrats. I remember that when the November shutdown oc-
curred, a reporter asked Speaker Gingrich, "Whose fault is it?" And
the Speaker made a very wise statement that day, and the state-
ment has stuck with me. He said, "It's all our fault. We were sent
here to lead."
And he was talking about the leadership. He was talking about
the President. He was talking about Mr. Gore, Mr. Panetta, Mr.
Dole. He was talking about me. He was talking about you. He was
talking about Jim Moran, Steny Hoyer, all of us. I think every
Member in this room, we are here because we were sent here to
lead.
After listening to the debate surrounding the shutdown, most
Americans had to be very concerned about how the administration
and this Congress would lead this country. And I think that all of
us recognize the problems with this kind of gridlock and the fact
that we were sent here to lead.
I don't want to see another shutdown. We all know they are a
waste of time. They are too costly. They are demoralizing. And I
would hope that we would try to look for a solution that we can
all live with to prevent it from happening. We can listen to the
next panel and hear more about the legislation.
559
But, again, I agree with my colleagues, also, who have made the
statements, very eloquently, basically that we are working for a
balanced budget where, at the present moment, the interest on the
national debt next year, at this particular rate, will be the exact
percentage of all our entire domestic discretionary spending, which
would be education, science, transportation, and the medical costs,
with the exception of entitlements.
So we all want to go in the same direction. I think it's time for
us to hold hands and stick together.
Thanks, Mr. Chairman.
[The prepared statement of Hon. Constance A. Morella follows:]
560
STATEMENT OF THE
HONORABLE CONSTANCE A. MORELLA
HEARING ON GOVERNMENT SHUTDOWN li
SUBCOMMITTEE ON CIVIL SERVICE
DECEMBER 14, 1995
I thank Chairman Mica for calling this hearing. We've
been talking about shutdowns for a good while now, and it is
easy to play the partisan politics card so Democrats can blame
Republicans and Republicans can blame Democrats. But, the
simple truth is that gets us nothing.
When the November shutdown occurred, a reporter asked
Speaker Gingrich, "whose fault is it?" And the Speaker made
a very wise statement that day and that statement has stuck
with me. He said, it is all our fault. We were sent here to
lead.
And, he was talking about himself. He was talking about
the President. He was talking about Mr. Gore, Mr. Panetta,
Mr. Dole. He was talking about me. He was talking about
you, Steny and you, John, and every Member in this room.
We're all in this, because we were sent here to lead.
561
After listening to the debate surrounding the shutdown,
most Americans had to be very concerned about how the
Administration and this Congress would lead this country. I
was sitting in my office during one point of the debate, and I
was sensing it. I feel even the most die-hard Republican or
Democrat does not want to see this kind of gridlock. We were
sent here to lead -- not to point the finger, not to lay blame -
to lead.
I also want to say something about the federal workforce,
because I feel sometimes what gets lost in budget debates and
shutdown posturing is the fact that federal workers are human
beings. They are taxpayers, and they are consumers. They
have kids off in college. They belong to local PTAs; they buy
their groceries at Giant and Safeway and their cars from Ford.
Those of them I have spoken with believe in a future for
their children - the common vision that we all share, even
though there are different roads to get there. They know the
deficit must be cut.
562
But, I also hear them screaming for fairness. I hear them
saying that, "they should not be pawns in a political game of
chess." I hear them saying enough is enough. And I am one
Member of Congress that has heard their anguish; and I, too,
believe that enough is enough.
Regardless of who sits or sat in the White House or who
controls or controlled Congress, over the years federal workers
have been treated like second class citizens in the land they
help build, protect and preserve. And, enough is enough.
Folks, we just experienced the longest government
shutdown in U.S. history, and we are staring at another one
either this Friday or next.
I do not want to see another shutdown. They are a waste
of time, they are costly, and they are demoralizing. Let's not
play politics; let's lead. Let's look for a solution that we all
can live with to prevent this from happening. Let's enact a
long-term solution to this problem.
I am a cosponsor of two bills, H.R. 2006 and H.R. 2184,
chat would keep the government operational and workers paid
563
while the Congress and the President worked out political
differences. We have the sponsors, Mr. Gekas and Mr.
Moran, here today. Let's find out if these bills provide the
framework we need to lead.
I'm reminded about something we do in May. We
celebrate Public Service Recognition Week. It is an opportunity
to honor public servants and to recognize their dedication to
this country. A dedication that was embodied and displayed
for the world in the wake of the Oklahoma City Bombing when
a public servant, who devastated and injured, anguished over
her inability to get checks out to recipients.
Several months after this week of recognition, federal
workers, in fear of a shutdown, must annually anguish over
how they will meet mortgage payments and other obligations.
This is not right; this is not leadership.
This annual affair does immeasurable damage to federal
worker morale and commitment. It's time to stop this. We
can do this; we should do this.
564
I thank Chairman Mica for calling this hearing. I look
forward to hearing from my colleagues.
i
565
Mr. Mica. I thank the gentlelady and recognize Mr. Burton.
Mr. Burton. I just want to make a comment. Representative
Hoekstra made a comment that I thought was very important, and
I wanted to respond to that; that is that, as a practical matter, if
the government is shut down, and we have a number of people who
represent large numbers of Federal employees, and when we start
talking about getting the votes necessary for one position or an-
other, you can't get their votes if you're going to put a lot of their
employees out of work without compensation.
So, when we had the government shutdown, the political reality
was that we were going to pay those people when they weren't
working or think that wasn't going to fly. So it seems to me a real-
istic thing to do to say, "Look, if they want to work during the
shutdown, we will allow them to work, and they will be com-
pensated retroactively." We hope there are no more government
shutdowns, but if there are, they will be working; they will be pro-
viding a service for the country, rather than being at home, not
working, worrying, and then being compensated anyhow.
So I think the taxpayer benefits; the Federal employee benefits,
if we are able to solve this thing by legislative action which says,
very clearly, that they are going to be able to be employed. Now,
I understand the concern that you had about private contractors
and private employers, but this is not a perfect science that we are
engaged in, in politics and in governing.
And I don't know how in the world we could extend what we're
talking about to the private sector and make it workable. In my
opinion, we can deal with the problem of making sure that Federal
employees who are laid off because of a government shutdown have
the opportunity to work if they so choose. I've got legislation — I
think others do — Congressman Moran and I, that will deal with
that. But to not deal with it up front I think is going to cause us
more problems.
With that, I will be happy to yield to my colleague.
Mr. Hoekstra. I thank the gentleman for yielding.
Actually, there is a situation that is very similar. We have dis-
covered that California, at their last budget impasse, decided that
they would issue State lOUs to their workers who were voluntarily
working. Under the Fair Labor Standards Act, they were found in
violation of the law and were prohibited from doing that, which is,
I think, very similar to what we are considering doing here in
Washington.
All I'm saying is, if it's OK for Washington, we ought to change
the law and make it OK for California, make it OK for Michigan.
We should be willing to live under the same laws that we are put-
ting the private sector under. This also applies to the private sec-
tor, the FLSA, we've had hearings and markups on some bills this
year about what we in this Congress have done as defining volun-
teer work and almost making it impossible to volunteer.
Mr. Mica. Well, I thank the panel for their participation. Do you
have any comments?
Mr. Bachus. Mr. Chairman, I would just like to thank you for
the opportunity of coming before you, and I appreciate the expres-
sions that we all have to work together. I think that's the key.
566
Mr. Mica. We also appreciate your individual leadership as
chairs and as the representative of the freshman class, chairs of
various investigations and other responsible subcommittees of the
House.
I also appreciate your fine efforts in trying to get the agencies
to respond both to the letter and intent of the law, and to see that
public health and safety is ensured, much as we've tried to do in
a bipartisan fashion on our subcommittee. So we thank you.
Mr. Hoekstra.
Mr. Hoekstra. Mr. Chairman, is the record open? I've got copies
of the letters.
Mr. Mica. Yes, absolutely, without objection, and we will leave
the record open.
[The information referred to follows:]
567
F COOOUMC ffNNSnvAMA.
W&UMI L OAV. msMoum.
COMMITTEE ON ECONOMIC SJ"-IJo-:^p:
AND EDUCATIONAL OPPORTUNITIES -«^t^.-wvo«
U.S. HOUSE OF REPRESENTATIVES
3101 FlAYBUnN HOUSE Of FtCt euiLCMW
WASHINGTON, DC 20515-6100
»TM CAWXIN* MAJOfllTY — (?0?l 225-*SJT
' (T7Yt-H702P 726-337J
HA MrNORlTV — (202) 22S-372S
.«»«oo«o.c» November 29. 1995 aTy«»«»«n,
VIA FACSIMILE (202) 219-8822
The Honorable Robert Reich
Secretary of Labor
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
Dear Secretary Reich:
The Committee on Economic and Educational Opportunities is charged with ensuring the
effective, efficient and economical operation of the Department of Labor. The Committee also is
responsible for ensuring that Departmental activities are consistent with all applicable law.
Therefore, pursuant to its oversight responsibilities under Rule X and XI of the Rules of the
House of Representatives, the Committee would like to make the following request for
information regarding the activities of the Department during the recent lapse in funding due to
the lack of a signed appropriations bill for Fiscal Year 1996.
The Constitution prohibits the withdrawal of any money from the Treasury "but in the
Consequence of Appropriations made by the Law. ' By the terms of this Constitutional
provision, government entities might continue to obligate funds during a temporary lapse in
appropriation as long as no monies are paid out during this period. The Antideficiency Act (Act)
was passed to close this gap by making it a crime for an official or employee of the United States
Government or of the District of Columbia to make expenditures in excess of appropriations or
involve the Government "in a contract or obligation for the payment of money before an
appropriation is made unless authorized by law.* 31 U.S.C. 1341 (a) (1) (1988).
The Act also prohibits any officer from accepting 'voluntary services' or 'employ[ing]
personal services exceeding that authorized by law except for emergencies involving the safety of
human life or the protection of property." 31 U.S.C. 1342. Section 1342 was amended in 1990
to specifically preclude 'ongoing, regular functions of the government the suspension of which
568
The Honorable Robert Reich
November 29. 1995
Page 2
would not imminently threaten the safety of human life or the protection of property." Id.
Coupled with the Constitution and the Act and due to some questions concenung the scope and
meaning of this Act, we must also consider then Attorney General Benjamin Civiletti's issued
opinion clarifying the scope of this Act in 1980. While this memo specifically dealt with the
lapse of funding for the Federal Trade Commission, he later issued a second opinion, written in
January 1981, that significantly modified his earlier opinion, and which applied to larger
questions presented by a more widespread, but temporary lapse in appropriation. 5 Op. OLC 1
(1981) (Civiletti Memo). The Civiletti Memo noted that the phrase 'authorized by law' would
permit an agency to continue the obligation of funds where the obligations are either funded by
multi-year or no-year appropriations, expressly authorized by statutes permitting obligations in
advance of appropriations, or impliedly authorized by the specific terms of duties imposed on the
agency. This same phrase 'authorized by law' would, according to the Civiletti Memo, also
permit the President to incur obligations 'necessarily incident to presidential initiatives
undertaken within his constitutional powers." Id.
Attorney General Civiletti then interpreted the Act's limitations on voluntary services
under Section 1342. Specifically, the Civiletti Memo provides a test for determining whether an
emergency involving life or property exists:
First, there must be some reasonable and articulable connection between the
function to be performed and the safety of human life or the protection of
property. Second, there must be some reasonable likelihood that the safety of
human life or the protection of property would be compromised, in some degree,
by delay in the performance of the function in question.
This opinion was reaffirmed by Assistant Attorney General Walter Dellinger, in responding to a
request for advice from 0MB Director Alice Rivlin, with minor modifications to account for the
1990 amendment to the emergency exception of the Act. Memorandum for Alice Rivlin from
Walter Dellinger, August 16, 1995 (Dellinger Memo). In this regard, Mr. Dellinger noted:
. . . there must be some reasonable likelihood that the safety of human life or the
protection of property would be compromised, in some significant degree, by
delay in the performance of the function in question. [Emphasis added to show
the change.]
Providing further clarification, the Dellinger memorandum notes:
... the emergencies exception applies only to cases of threat to human life or
property where this threat can be reasonably said to be near at hand and
demanding of immediate response.
569
The Honorable Robert Reich
November 29, 1995
Page 3
In short, the Civiletti and Dellinger memoranda provide the basis for the guidelines given
by the 0MB to federal agencies on how to design and implement their Suspension of Operation
plans, and should be the basis for the Department's own shutdown plans. After reviewing the
Department's plans, and after reading several news accounts concerning these plans and their
implementation, we have several questions and concerns.
The Occupational Safety and Health AdministratioD (OSHA)
It is our understanding that approximately 90 percent of OSHA's staff was deemed non-
essential during the recent gap in appropriation. In particular, we understand that only 256 of
OSHA's 2,267 job safety inspectors remained on the job during the government shutdown.
According to the Antideficiency Act and the interpretations of this Act provided by
Messrs. Dellinger and Civiletti discussed above, your decision to furlough these 2,01 1 job safety
employees would mean that you had determined that there was "no reasonable likelihood that the
safety of human life or the protection of property would be compromised, in some significant
degree" by your decision to delay the services of these employees.
The public should be reassured that you determined that the ftinctions of these employees
are not necessary or essential "in some significant degree' to the "safety of human life." Yet,
rather than reassure the public, you were recently quoted as saying, "[in] a peculiar twist
befitting the interests of this Congress, we will be prohibited from carrying on our normal duties
to prevent tragedies in the workplace . . . Iwje will only be able to respond after these tragedies
have occurred." You then went on to express concern that the public does not understand the
"real life implications of shutting down an agency." (BNA, Daily I^bor Report, p. C-1,
1 1/14/95). This quote directly conflicts with your decision not to have these employees excepted
under the Antideficiency Act. Moreover, such statements serve only to create fear and confusion
among American workers. You also seem to suggest that the decision as to which employees are
excepted or essential under gaps in ftinding is a decision of the Congress, when in fact, such
decisions are made by the Executive branch. In light of the above, please:
(1) Explain your decision to ftirlough these job safety inspectors in light of Section
1342 of the Antideficiency Act, which excepts employees involved in the "safety
of human life," and the interpretive memoranda of Messrs. Dellinger and Civiletti
concerning the application of this section. In particular, please explain your
furlough decisions in light of your public statements that these employees are
"necessary to prevent tragedies in the workplace." In addition, provide any
internal memorandum or documentation that was prepared regarding the
government shutdown or the preparation of OSHA's contingency plan.
570
The Honorable Robeit Reich
November 29, 199S
Page 4
(2) Provide an analysis of how OSHA safety inspectors differ from other federal
personnel charged with protecting the safety of human life, but who were excepted
by their agencies during this shutdown (e.g., meat inspectors). Include any
memorandum to or from the 0MB that provided guidance in this regard.
(3) Explain the OSHA furlough decision in light of the concomitant decision to deem
inspectors at the Mine Safety and Health Administration (MSHA) as excepted
under Section 1342. In particular, please provide the characteristics you
identified that differentiated MSHA inspectors from OSHA inspectors in terms of
their relationship to the 'safety of human life.*
Employment Standards Administration (ESA)
The Department's contingency plan for the ESA, submitted oo September S, 199S,
referred to composing and sending letters to 'non-construction labor unions, major employer
councils, and interest groups' and other 'unions representing covered employees* even though
they are listed in the plan as not being 'directly involved in program activities.' It is unclear
how these activities are justified under the Antideficiency Act, or how they apply to the normal
termination of program activities-particularly considering your decision to furlough OSHA
safety inspectors. In this light, please provide:
(1) copies of all letters (either a representative sample or a copy of the form letter
used) sent to the public and other 'interested' parties concerning the suspension of
operations;
(2) a list identifying all public and other 'interested' parties that received such
notification;
(3) the employment status of the individuals who prepared and sent such notification
(excepted, essential, or non-essential) and the amount of time spent performing
this activity; and,
(4) an explanation of how these activities are consistent with current law, regulatory
guidelines, or the Civiletti and Dellinger memoranda.
The Department's contingency plan also discusses the composing and sending of letters to
beneficiaries under the Office Workers' Compensation Program (OWCP) to notify recipients that
there will be a cessation of their federal benefits. As noted above, activities not tied directly to
the current year appropriation would not be affected by the funding gap. In particular, programs
funded under a multi-year or no-year appropriation are allowed to continue operations.
571
The Honorable Robert Reich
November 29, 1995
Pages
Moreover, the Civiletti and Dellinger memoranda allow for the continuation of administrative
functions necessary to maintain alternatively funded programs, despite the lack of current funding
for such administration. The example most often cited for such a circumstance is the
continuation of Social Security payments during a temporary governmental shutdown.
Again, according to the Department's own contingency plan, the ESA and, in particular,
the OWCP deemed a large number of its employees to be essential. In this regard, please
provide:
(1) a list of which benefit programs were temporarily suspended and how they are
funded (trust fund, insurance, reimbursable assessment), including an explanation
of why the program was suspended in light of the Civiletti and Dellinger
memoranda;
(2) copies of the letters (either a representative sample or a copy of the form letter
used) sent to beneficiaries notifying them of a cessation of their federal benefits;
(3) an explanation of the criteria used by the ESA to classify its employees as
essential, non-essential, or excepted; and,
(4) a list of employees who were deemed either essential or excepted and a summary
description of the tasks they perform (by office).
When preparing your responses, please interpret such requests to include materials that
are in hard copy, as well as electronic medium (e.g., E-Mail) and personal notes. We appreciate
your effort in this regard.
Quite frankly, Mr. Secretary, we are gravely concerned that the intent of the
Anlideficiency Act and the legitimate concern for American worker health and safety may
have been ignored and manipulated for political grandstanding purposes. While we hope this
is not the case, a preliminary review of the facts surrounding the DOL furloughs and your
public statements related to those furloughs, suggests otherwise.
572
The Honorable Robert Reich
November 29. 1995
Page 6
Because of the seriousness of this matter, and because of the possibility of future gaps in
appropriations, we would appreciate answers to the above questions by December 5, 1995.
Thank you in advance for your assistance and cooperation. Should you have any questions,
please feel free to contact Emilia DiSanto or Derrick Max at (202) 225-7101.
BILLGOODLING / CASS BALLENGER PETE HOEKSTRA
r*K.>;t.mon •^ Oiairmflfi Chairman
Chairman
Committee on Economic and
Educational Opportunities
Sincerely,
CASS BALLENGER PETE HOEKSTRA
Chairman Chairman
Subcommittee on Workforce Subcommittee on Oversight
Protections and Investigations
WFG:DAM
cc: The Honorable William F. dinger, Chairman,
Committee on Government Reform and Oversight
Ms. Mary Ann Richardson, U.S. Department of Labor
573
U.S. Department of Labor SoLcnor ot i.abo>
Washingion DC 20210
DEC I I 1995
Honorable Pete Hoekstra
Chairman
Subcommittee on Oversight
and Investigations
U.S. House of Representatives
Washington, D.C. 20515
Dear Chairman Hoekstra:
Secretary Reich has asked me to respond to your letter of
November 29, 1995, in which you request information regarding
certain Department of Labor activities during the recent lapse in
funding. For your convenience, we have organized our response by
program agency and in accordance with the format of your letter.
I. The Occupational Safety and Health Administration (OSHA)
Inquiry 1: Explain your decision to furlough these job
safety inspectors in light of Section 1342 of the Anti-Deficiency
Act, which excepts employees involved in the "safety of human
life," and the interpretative memoranda of Messrs. Dellinger and
Civiletti concerning the application of this section. In
particular, please explain your furlough decisions in light of
your public statements that these employees are "necessary to
prevent tragedies in the workplace." In addition, provide any
internal memorandum or documentation that was prepared regarding
the government shutdown or the preparation of OSHA's contingency
plan.
Response; The Anti-Deficiency Act allows the government to
continue functions in advance of appropriations on matters of
"emergencies involving the safety of human life or the protection
of property." 31 U.S.C. S 1342. The Anti-Deficiency Act
amendment of 1990 narrowed the interpretation of the provision
relating to emergencies, by providing that during a lapse in
funding, the Government may not engage in its "ongoing, regular
functions . . . the suspension of which would not imminently
threaten the safety of human life or the protection of property."
31 U.S.C. S 1342. The 1995 Justice Department opinion reinforces
the view that, in the absence of appropriations, the threat must
be imminent for the function to be performed as an "excepted"
activity.
The majority of OSHA's ongoing activities in conducting
preventative worksite inspections, providing employer outreach
and assistance, and responding to public inquiries in a routine
fashion was not determined to fall within the legal parameter of
40-190 97 - 19
574
an emergency involving the safety of human life from an imminent
threat. As a result of several OSHA and Solicitor Office reviews
during the period between September and mid-November, the
Department determined that OSHA employees involved in enforcing
imminent danger situations under Section 13 of the OSH Act, and
those involved in responding to workplace fatalities and
catastrophes, should be excepted from suspension requirements.
OSHA's preventative role in ensuring workplace safety was
suspended. The Department also determined that OSHA employees
should be able to respond to complaints or other information
coming to our attention that indicates that employees are exposed
to hazardous conditions that present a high risk of death or
serious physical harm in the near future. For instance, hazards
cognizable under Section 13 of the Act are, by definition, of
such gravity, that their abatement is required immediately, long
before the course of routine administrative enforcement
proceedings is permitted to run. OSHA's preventative role, such
as conducting general schedule inspections, in ensuring workplace
safety was suspended. Hence, OSHA identified two senior
compliance personnel in each of its area offices and a few
headquarters personnel that would be "excepted employees" to deal,
with such emergency situations as might arise that would fall '
within "excepted" activity. In addition, OSHA recognized, as an
important contingency provision of its plan, that should a
situation arise falling within excepted activities, additional
staff would be identified and recalled to address particular
emergencies.
Inquiry 2: Provide an analysis of how OSHA safety
inspectors differ from other federal personnel charged with
protecting the safety of human life, but who were excepted by
their agencies during this shutdown (e.g., meat inspectors).
Include any memorandum to or from the 0MB that provided guidance
in this regard.
Response; OSHA's role in providing worker protection is a
multi-faceted undertaking. Although OSHA has, as components of
its mission, the responsibility to conduct workplace inspections,
promulgate standards and investigate workplace complaints, the
agency does net have statutory requirements to undertake specific
actions in accomplishing its mission. OSHA does not have an
inspector at every worksite, nor is it required to inspect any
specific establishment, worksite or industry. This fact
distinguishes OSHA from other Federal regulatory agencies with
more clearly stated specific activities that must be undertaken,
particularly where private sector activity would cease in the
absence of the federal presence (e.g. meat inspections or air
traffic control) .
Inquiry 3: Explain the OSHA furlough decision in light of
the concomitant decision to deem inspectors at the Mine Safety
and Health Administration (MSHA) as excepted under Section 1342.
576
In particular, please provide the characteristics you identified
that differentiated MSHA inspectors from OSHA inspectors in terms
of their relationship to the "safety of human life."
Response; MSHA continued only those functions that directly
involved protecting against imminent threats to human life in the
Nation's nines, or which were necessary for the protecting of the
Government's property. During the November furlough. Federal
mine inspectors conducted inspections that targeted special
hazards like the risk of explosions, as well as conditions and
practices that recently have been key causes of death and serious
injuries.
Mining is a specialized industry with a long history of tragic
accidents and disasters. The workplace changes often and
unpredictably, from shift to shift and day to day. Frequent
inspections are essential to finding and correcting hazards as
they emerge.
The special character of mining, and its hazards, is reflected in
the inspection-provisions of the Federal Mine Safety and Health
Act of 1977. They demonstrate that "imminent" dangers occur
regularly in the mines. For this reason, the Mine Act requires
at least four annual inspections for underground mines, and at
least two annual inspections for surface mines. 30 U.S.C.
S 813(a). Some mines must be inspected far more frequently. For
example, mines that generate large quantities of highly explosive
methane gas must be spot-inspected as often as every five days.
30 U.S.C. S 813(i) .
In addition, MSHA technical services which were critical to
ensure safety and continued operation of the Nation's mines were
excepted activities. For example, underground coal mines must
have plans approved by the Secretary for ventilation and for
supporting the roof and walls of mined areas, — the latter an
essential measure to protect against cave-ins -- which are
analyzed and must be approved by MSHA for effectiveness and
conformance with safety laws in order for the mine to operate.
See 30 U.S.C. §§ 811, 862(a), 863(o). These "plan approval"
functions were maintained to enable MSHA to provide required
government services arising from the need for continued operation
of the private economy. See 30 U.S.C. S 878(c) and (i).
The same legal standard that was applied to MSHA was applied to
OSHA. OSHA addresses a vast array of workplace hazards across
all sectors of industry, not all of which are likely to cause
death or serious physical harm on an imminent basis. The
Department identified the range of OSHA activities which met the
criteria of the Anti-Deficiency Act for continuation during a
lapse in funding. Only those activities relating to an imminent
threat to the safety of human life were "excepted." As stated in
response to Inquiry 1 above, the Department determined that OSHA
576
employees Involved In enforcing imminent danger situations under
Section 13 of the OSH Act, and those involved in responding to
workplace fatalities and catastrophes, should be excepted from
suspension requirements. It should be noted that, even with the
narrowing effect of the 1990 amendment to the Anti-Deficiency
Act, this application of the statute accords with the prior legal
determination of Solicitor of Labor T. Timothy Ryan, Jr., who,
during the Reagan Administration, concluded in an October 19,
1982, memorandum that "only those OSHA employees involved in
enforcing closedowns in imminent danger situations under 13 of
the Occupational Safety and Health Act, and those involved in
making fatality investigations may be excepted." As an
illustration of the staffing implications of this 1982 opinion,
OSHA identified 176 employees for "excepted" work in its
September 25, 1987, Contingency Plan for Suspension of Agency
Operations. This figure stands in contrast to the 210 employees
identified as exempt by OSHA in 1995.
II. The Employment Standards Administration (ESA)
A. Letters to "non-construction labor unions, major employer
councils, and interest groups" and other "unions representing
covered employees"
Inquiry 1: Provide copies of all letters (either a
representative sample or a copy of the form letter used) sent to
the public and other "interested" parties concerning the
suspension of operations.
Response; No letters were sent to the public or other
"interested" parties concerning the suspension of operations.
Inquiry 2: Provide a list of all public and other
"interested" parties that received such notification.
Response; Not applicable. See response to Inquiry 1,
immediately above.
Inquiry 3; Provide the employment status of the individuals
who prepared and sent such notification (excepted, essential, or
non-essential) and the amount of time spent performing this
activity.
Response: Not applicable. See response to Inquiry 1,
immediately above.
Inquiry 4: Provide an explanation of how these activities
are consistent with current law, regulatory guidelines, or the
Civiletti and Dellinger memoranda.
Response; Not applicable. See response to Inquiry 1,
immediately above.
I
577
B. Activities by the Office of Workers' Compensation Programs
fOWCP^
Inquiry 1: Provide a list of which benefit programs were
temporarily suspended and how they are funded (trust fund,
insurance, reimbursable assessment) , including an explanation of
why the program was suspended in light of the Civiletti and
Delllnger memoranda.
Response; No benefit programs were suspended during the
recent lapse in funding.
Inquiry 2: Provide copies of the letters (either a
representative sample or a copy of the form letter used) sent to
beneficiaries notifying them of a cessation of their federal
benefits.
Response: Not applicable. See response to Inquiry 1,
immediately above.
Inquiry 3: Provide an explanation of the criteria used by
ESA to classify its employees as essential, non-essential, or
excepted.
Response; ESA classified its employees as excepted or
essential based on the criteria contained in 31 U.S.C. S 1342
(Anti-Deficiency Act) , and the Civiletti and Dellinger memoranda.
Employees in the Office of Workers' Compensation Programs (OWCP)
were classified as excepted because benefit eligibility and
payment activities were authorized to continue for the FECA
Employees' Compensation Fund, the Black Lung Trust Fund, and the
Longshore Special Fund. OWCP administrative activities that are
required to assure continuation of these benefit programs are
authorized so long as actual benefit funds remain legally
available.
During the November shutdown, legally available balances remained
in all three of these benefit accounts. Thus, we reasoned, in
conformity with the Department of Justice's legal opinions, that
personnel required to authorize and pay benefits would be
considered excepted to ensure that the basic payment function was
not compromised and any medical emergencies were responded to.
The number of personnel varied by program, according to the
expected volume and complexity of the excepted activities.
Lastly, a skeletal management staff in the national and field
offices was necessary to manage these operations.
Inquiry 4; Provide a list of employees who were deemed
either essential or excepted and a summary description of the
tasks they perform (by office) .
578
Response: See Attachment, which provides OWCP shutdown data
by program area.
The Secretary appreciates this opportunity to address your
questions and concerns. Should your staff members be in need of
further information, they may contact Mary Ann Richardson, Deputy
Assistant Secretary for Congressional Affairs, at (202) 219-6141.
Thomas S. Williamson, Jr.
Enclosure
579
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580
Mr. Mica. We will try to work in a bipartisan fashion in the next
hours to see if something can be crafted to bridge any of the gaps
and provide some legislative remedy, in the event of another shut-
down.
We welcome your input. You have staff, and you have expertise
yourselves in these matters that we couldn't possibly have. So we
welcome your participation in that process. In our next panel, we
will hear from some of the Members who have legislation pending
and other proposals. We thank you.
If we could have the next panel come forward. We have Mr.
Steny Hoyer from Maryland; Mr. George Gekas from Pennsylvania;
Mr. Glen Browder from Alabama; Mr. Joe Barton from Texas; Ms.
Karen McCarthy from Missouri; and Mr. Sonny Bono from Califor-
nia.
If you could, again, join us. As is customary, while you are being
seated, if you can and would limit your remarks to 5 minutes, we
would appreciate that. And we will include lengthy statements or
additional information for background in the record of the hearing
today.
Now that we have our panel together, Mr. Steny Hoyer is recog-
nized first for 5 minutes. Then, Mr. G^kas, Mr. Browder, Mr. Bar-
ton, Ms. McCarthy, and Mr. Bono.
Mr. Hoyer, you are recognized.
STATEMENTS OF HON. STENY HOYER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MARYLAND; HON. GEORGE
GEKAS, A REPRESENTATIVE IN CONGRESS FROM THE STATE
OF PENNSYLVANIA; HON. GLEN BROWDER, A REPRESENTA-
TIVE IN CONGRESS FROM THE STATE OF ALABAMA; HON.
JOE BARTON, A REPRESENTATIVE IN CONGRESS FROM THE
STATE OF TEXAS; HON. KAREN McCARTHY, A REPRESENTA-
TIVE IN CONGRESS FROM THE STATE OF MISSOURI; AND
HON. SONNY BONO, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Mr. Hoyer. Thank you very much, Mr. Chairman.
I appreciate the opportunity to appear before the committee, and
I appreciate these hearings on the longest shutdown in our history.
As you know, more than 800,000 people were sent home, at a cost
of approximately $700 million to $800 million to the taxpayer.
As you review the impact of the shutdown and its substantial
cost, I hope that the subcommittee will ask the Speaker and the
leadership, very frankly, to ensure that it never happens again.
The world's leading power and all of its citizens should be ashamed
of the contrived crisis that the leadership chose to create. Some on
the Republican side seem to view this as a game, very frankly,
where they can shut down what they do not like and keep open
what they do. The Parks bill yesterday was a symptom of that.
For more than a century, the law has recognized that absent ap-
propriations there is authority only for Federal expenditures for
emergency situations involving danger to life and property. I began
pressing for hearings, Mr. Chairman, on a potential shutdown in
the Appropriations Committee on Treasury and Postal in late Au-
gust. It was clear, based upon the statements the Speaker made
581
throughout the summer, that he intended, if he couldn't get agree-
ment from the President, to shut down the government.
Despite those threats, my friend, Chairman Jim Lightfoot, who
does an outstanding job as the chairman of our committee, who is
fair and nonpartisan in his approach, but he dechned to hold hear-
ings because he believed all appropriation bill measures would be
finished on time. None of them were, of course. Today, only 7 of
the 13 have been enacted into law, and I have again asked Chair-
man Lightfoot to hold hearings on what I believe are the substan-
tial funding aspects of shutdown.
Mr. Chairman, I want to commend the administration for its ef-
forts to manage, with only limited precedent, last month's major
shutdown of the government. Never before in history have we shut
down the government for that period of time. In fact, I've been here
for a number of those shutdowns, most of them were for hours, if
they occurred, and over weekends, and it, frankly, was the Con-
gress that wanted to open up the government, and it was the Con-
gress that accommodated President Reagan's or President Bush's
desires so that that could be done, if you check the record.
Now, let me digress from my written statement and say, Mr.
Chairman, you opened with a recitation of the constitutional provi-
sion. I thought that was appropriate. The Constitution, in fact, says
that no expenditure will be made save for an appropriation passed
by Congress.
I want to say something that might sound a little bit heretical
to those of us who have a large number of Federal employees whom
we represent, but I'm not so sure that I'm interested in making it
easier to shut down the government. I'm not so sure I want people
to pretend that shutting down government is simply a political
game played between the Congress and the President to muscle
one or the other. I'm not so sure that I want services to continue
as if nothing occurred. I'm not so sure that we haven't created for
ourselves a formula for irresponsibility.
You want to keep Social Security going; so do I. You want to
keep veterans' pa3anents being made; so do I. You want to keep Se-
cret Service, Customs, and ATF on the job; so do I. And in the proc-
ess, you want to shut down those things you don't like, that maybe
people aren't going to be so upset with in the immediate future.
While I understand the purpose of the legislation that is pro-
posed, I'm not sure its helpful to Federal employees or the oper-
ations of Federal Government or to the responsibility of the Con-
gress and the President to act to adopt appropriation bills in a
timely fashion. I believe these hearings ought not to be ho\y to
manage a shutdown. Very frankly, what we ought to hold hearings
on is how to avoid shutdowns, because they don't make any sense.
Mr. Hayworth implied, and I think believes, legitimately, that
the end justified that means. I understand his premise, that shut-
ting down the government, if it results in a balanced budget, was
worth the price. I think that's probably correct. As you know, I
voted for the balanced budget amendment. I am one of the 68
Democrats who voted for the coalition budget, which cuts more
funding in the next 7 years than does the Republican alternative,
as all of you know. So I believe in a balanced budget.
582
But, Mr. Chairman, I want to tell you that you quoted the Presi-
dent in his letter. Mr. Gingrich was quoted as saying, "The Presi-
dent will veto a number of things, and we will put them all on the
debt ceiling, and he will decide how big a crisis he wants." In other
words, we will muscle the President, put on him the onus. Then he
said, in September, "I don't care what the price is. I don't care if
we have no Executive Office and no bonds for 30 days. Not this
time."
Mr. Chairman, I would hope all of us, as Mrs. Morella has said
and Mr. Moran has said and you have said, would reach out to one
another and say, let us not use this as a device to muscle one an-
other irresponsibly. Let us pass appropriation bills. Let us, yes,
adopt, in my opinion, a balanced budget within the 7 years that
I've supported, and will continue to support, and will fight for, and
will urge the President to be for, because I think that's good gov-
ernment for all our people.
But for all our people, shutting down government is bad policy,
bad politics, and bad finances. I would urge us to address the ques-
tion of how to avoid, not how to manage, a shutdown.
[The prepared statement of Hon. Steny Hoyer follows:]
583
STENY H. HOYER
Stm OitTWfCt. Mahviano
COOPtRATION II
Appropriations Committee
Congress of the Bnited States
flouBC of HcprEBcntatiots
IDashington, ©£ 20515-2005
STATEMENT OF THE HONORABLE STENY H. HOYER
BEFORE THE SUBCOMMITTEE ON CIVIL SERVICE
ON WHAT'S ESSENTIAL DURING A GOVERNMENT SHUTDOWN
DECEMBER 14, 1995
Mr. Chairman, I appreciate the opportunity to discuss the
very serious subject of government shutdowns. Like millions of
Americans, I am deeply concerned that our Federal government was
shut down for six days last month — the longest shutdown in our
history. More than 800,000 people were sent home mid-morning on
November 14th and did not return until November 20th.
While I hope that this irresponsible action will not be
repeated, I regret that it is clearly a possibility when the
current continuing resolution expires on December 15th. As you
review the impact of the shutdown and its substantial cost, I
hope that the Subcommittee will ask the Speaker and the
leadership to ensure that it never happens again. The world's
leading power and all of its citizens should be ashamed of the
contrived crisis that the Leadership chose to create.
Some on the Republican side seem to view this as a game
where they can shut down what they do not like and keep open what
they do. We saw evidence of that this week when the Leadership
brought a bill to the floor to keep our National Parks open — a
noble cause that could be solved by passing an Interior
Appropriations bill. We saw evidence of it at your hearing last
week when you questioned Commissioner Chater about what
components of the Social Security Administration stayed open
during the shutdown.
The fact is that no one can pret ^nd these shutdowns are not
real. There are consequences of not fulfilling the
Constitutional requirement for appropriations measures. This is
not a game and there will again be no winners, if the leadership
forces another shutdown.
For more than a century, the law has recognized that, absent
appropriations, there is authority only for federal expenditures
for emergency situations involving danger to life or property.
The Republican leadership cannot keep certain programs open and
running just because they are popular We cannot allow Members
to create a charade that shutdowns only hurt programs deemed by
some to be unpopular.
PRINTED ON RECYCLED PAPER
584
I began pressing for hearings on a potential shutdown in the
Appropriations Subcommittee on Treasury, Postal Service and
General Government in late August. It was clear, based on
statements the Speaker made throughout the summer, that he wanted
to create a crisis. Despite those threats my friend. Chairman
Jim Lightfoot, declined to hold hearings because he believed all
appropriations measures would be finished on time.
Regrettably, by October 1st, not a single one of the
thirteen appropriations bills had been signed. Today, only seven
of the thirteen have been enacted into law and I have again asked
Chairman Lightfoot to hold hearings on what I be] ieve are the
substantial funding aspects of a shutdown. Some of the costs are
difficult, if not impossible, to measure. An enormous amount of
time and resources were invested by the people you heard from at
last week's hearing in planning for a shutdown after it became
apparent that the Congress was so far behind on the
appropriations process.
I hope that, having created one crisis and heard the public
uproar, that the Republican leadership will move forward on the
remaining bills. More importantly, however, we should
immediately pass another continuing resolution in a timely,
bipartisan fashion without the leadership adding extraneous
measures.
I commend the Administration for its efforts to manage, with
only limited precedent, last month's major shutdown of the
government. The planning done by the Office of Management and
Budget and the various agencies avoided more serious problems
from occurring. While the Leadership here on the Hill played
partisan politics, the Administration did its best to protect the
public interest during the longest shutdown ever.
Obviously, one of the most important questions that each
agency faced was who worked and who did not work. Some
activities that are funded through user fees, such as the Mint
and the Patent and Trade Mark Office, stayed open. So did some
government corporations that fund their activities through fees,
most notably Amtrak and the United States Postal Service.
But for most F'deral agencies, the decision was based r.i
whether or not employees were needed for emergency actions co
protect against imminent threats to life or property. Excepted
employees, as you know, performed medical services that cannot be
delayed at Veterans Medical Centers and through the Public Health
Service. Also exempted from the furlough were many law
enforcement functions, transportation safety operations, and many
civilian employees of the Department of Defense.
585
I am angry that some have chosen to suggest that the
employees who were sent home under the very specific legal
guidelines are deemed "nonessential." I trust that none of
today's witnesses will offer such a view and that none of the
distinguished Members of this panel will repeat that outrageous
allegation.
As I said in a November 17th letter to every Member of the
House of Representatives, among t^lOse at home during the furlough
were men and women who: process benefits for American citizens;
provide vital information to the business community and the
public; lead our Nation's research efforts in fields ranging from
defense to cancer; and run our National parks and museums.
It may be popular here inside the beltway to malign these
employees but the facts are very simple — their tasks are very
important and are all functions that the customer, the American
people, consider essential.
Mr. Chairman, one message from today's hearing should be a
thank you to all Federal employees for their perseverance during
a period of uncertainty. These men and women, who have children
to feed and college tuition payments to make, have been
justifiably worried since rumors of shutdowns began in late
summer .
We should not allow anyone to add insult to injury by
suggesting that these people are not vital to the operations of
our Nation. We should stop playing games and we should stop
pretending that government shutdowns are not serious matters that
should never be allowed to occur.
0MB estimates that the six day shutdown last month cost
about $750 million. We can avoid wasting more money by passing a
continuing resolution tonight or early tomorrow. I urge the
leadership to do just that and I ask Members of this Subcommittee
to join me in that request.
586
Mr. Mica. I thank the gentleman for his testimony and now rec-
ognize Mr. Gekas from Pennsylvania.
I believe you have legislation to amend Title V to provide for the
continuance of Federal civilian pay during a period of lapsed appro-
priations.
Mr. Gekas. I thank the Chair, and I thank the members of the
committee.
I wish to reiterate many of the sentiments that have been ex-
pressed by the previous panel and some of those that have been ut-
tered by my friend from Maryland, although I must take issue with
him, if muscling was the key, as he saw it, of what occurred this
year that caused the shutdown, then those who engaged in that
muscling had great teachers in the Democrat majority that existed
since I've been in Congress and who used it on those limited shut-
downs, however limited they were, to try to muscle President
Reagan and President Bush at that time for their own means.
Appearing before the Rules Committee, then headed by Senator
Pepper, if you recall, followed by Joe Moakley, the Democrats uni-
formly resisted my efforts to bring about this instant replay, which
I will redescribe here, on the strength of, they said privately and
publicly, that that would rob them, the majority, of that very same
muscle power to which the gentleman from Maryland refers. And
the Republicans on the Rules Committee thought my idea was
great, and they were going to support it, and did. And I got 100
percent Republicans and 100 percent negative votes from the
Democrats.
Now comes 1995, and I was elated because my proposal was
going to receive immediate acceptance. I go before the Rules Com-
mittee, and Moakley praises my bill up and down. Hall of Ohio
thinks it's wonderful; Beilenson of California was ready to send me
a bouquet of roses. And Mr. Solomon, Mr. Goss, and the others
voted against me. [Laughter.]
It is no laughing matter, although I've been laughing myself.
So the record should be straight that the muscling is the only
thing that is bipartisan so far. Now, let's get to the meat of it.
When I first perceived, as I became a Member of Congress, the
potential of shutdowns and actual shutdowns, I introduced, a cen-
tury ago, the instant replay concept, which would say that if, on
September 30 of any given year, the fiscal year having ended with-
out a budget or without any 1 of the 13 appropriations bills having
been passed, that on October 1 there would be automatically en-
acted, by virtue of this legislation, last year's budget, the House-
passed version or the Senate version, whichever would be at the
lower figure.
That ends all our problems. If we adopt my kind of legislation,
the concerns expressed by the gentleman, Mr. Burton, who I hope
will be listening to this, because some of what he projected enters
into what I'm saying, those problems no longer exist. They are no
longer required, those fine distinctions between essential and non-
essential employees.
If Mr. Burton's plan, the one that he wants to cosponsor with the
gentleman from Virginia, Mr. Moran, goes into effect, where are
the appropriations going to come from for the electric lights and
the computers and the custodial services that will go along with
587
the volunteer who goes in, and we know we're going to pay him
retroactively? Who pays for the lights and the gas and all the other
accoutrements that are required to keep that Federal employee
working?
There are hundreds of problems involved in it, but I'm just citing
a couple of them to say, forget that; adopt my legislation, and you
don't have to worry about it anjrmore.
Now, let's talk about the muscling. This is important to me to try
to make my point. The bargaining power that the majority, like the
Democrats of 40 years and the Republicans of 9 months, have tried
to use in this exercise was for the purpose of preserving negotiating
power at the forthcoming budget negotiations. Democrats did it,
now the Republicans are doing it.
I believe that we can convince them, or try to convince them,
that they do not lose the negotiating power if they adopt my in-
stant replay type of legislation. Why? Because if the President, for
instance, should be dissatisfied with that low figure that comes into
play under my bill, last year's figure, when he had grand plans to
spend more money, he will want to negotiate to get back his origi-
nal idea of extra appropriations for a particular bureau or program.
The Republicans, who will want a new type of budget, will want
to zero out a program which they can't zero out because they don't
have the cooperation of the President. Now here is where their ne-
gotiating power remains intact, to try to zero out a program with
these kinds of instant replays reprogramming, going automatically
into existence at lower levels than ever before.
Further, the Republicans who are interested in a balanced budg-
et, joined by some individuals on the Democratic side, will see that
will save money, and go toward the balanced budget, if, during the
instant replay of the previous budget, we remain at lower levels
than what the new budget would project in any event. So we're on
a glide path toward a balanced budget anjrway.
I am chagrined that an effort in better government is not seen
as an effort in better government because it is wrapped up in the
muscling which we want to see forever abolished from the political
scene. I urge the members and the committee, as its own function,
to support this type of legislation.
[The prepared statement of Hon. George Gekas follows:]
588
Testimony of CongresBman George W. Gekas
before the Civil Service Subcommittee
of the House Government Reform and Oversight Committee
Thursday, December 14, 1995
Chairman Mica, Members of the Civil Service Committee, I want to begin
by thanking you for holding this hearing. This hearing will help provide
further illumination of the cloudy issue of a government shutdown. I want
to focus my remarks on the Civiletti opinions, considered to be the
historical roots of shutdowns caused by a lapse in appropriations.
In the Spring of 1980, Benjamin Civiletti prepared an Opinion of the
Attorney General of The United States upon the request of President Jimmy
Carter. In this document, dated April 25, 1980, he concluded that during a
lapse in appropriations President Carter must shut down the government.
Specifically, he stated:
It is my opinion that during a period of "lapsed appropriations,"
no funds may be expended except as necessary to bring about the
orderly termination of an agency's functions, and that the
obligation or expenditure of funds for any purpose not otherwise
authorized by law would be a violation of the Antidef iciency Act.
Civiletti reviewed the Comptroller General's Opinion -- the premier
document on this issue at the time -- which stated that money could be
expended to maintain essential day-to-day operations, and that employees
would continue to be employed. The Comptroller General concluded
individuals could continue to work because it was not "the intent of
Congress that GAO close down." Civiletti found this conclusion "legally
insupportable." And with these words the modern day government shutdown,
or train wreck, began.
On the eve of the inauguration of President Ronald Reagan, January 16,
1981, Civiletti revisited the issue of a lapse in appropriations and
concluded by stating:
The foregoing discussion articulates the principles according to
which, in my judgement, the Executive can properly identify those
functions that the Government may continue upon lapses in
appropriations. Should a situation again present itself as
extreme as the emergency that arose on October 1, 1980, this
analysis should assist in guiding planning by all departments and
agencies of the Government.
As the law is now written, the nation must reply initially for
the efficient operation of government on the timely and
responsible function of the legislative process. The
Constitution and the Antidef iciency Act itself leaves the
Executive leeway to perform essential functions and make the
government "workable." Any inconvenience that this system, in
extreme circumstances, may bode is outweighed, in my estimation,
by the salutary distribution of power that it embodies.
589
It is clear from this quotation that upon further review of the issue
Civiletti found, in the waning hours of the Carter Administration, that the
law combined with the Constitution granted the Executive branch authority
to perform essential functions and make the government "workable". From
this opinion the great debate over essential and non-essential employees
and functions began.
However, the debate on essential and non-essential is not truly the
issue. It is clear that government shutdowns and how they should be
handled falls in the great vat of political questions. As the above
quotations from Civiletti imply, the central issue centers on the
legislative process. The themes are the intent of Congress and the
responsible execution of Congressional power.
That is why as a member of the then minority, I introduced legislation
in every Congress since 1989 to clarify Congress' intent and provide for
the responsible execution of Congressional power. My legislation,
introduced in the 104th Congress as H.R. 2006, provides for an automatic
continuing resolution which would forever prevent a lapse in appropriations
from occurring.
During the 104th Congress, I also introduced a second piece of
legislation on this issue which was refereed to this subcommittee. I also
sent a letter dated August 4, 1995 to Chairmen Mica and dinger requesting
hearings on shutdowns in general and on my bill, H.R. 2007, in particular.
H.R. 2007 is designed to address the cost incurred by the federal
government during a shutdown by providing "authorization by law" to take
the necessary actions to avoid the wasteful expenditure of taxpayer dollars
luring a lapse in appropriations.
Following the November 1995 lapse in appropriations shutdown -- the
longest in the history of this country -- it is, or soon will be, clear
that such shutdowns create significant questions, problems and expense. As
Benjamin Civiletti, and the Comptroller General before him, alluded, it
would take an act of Congress to change the Antidef iciency Act. Though the
problem is rooted in the actions of the executive branch and the shutdowns
this country has experienced are often fueled by Presidential vetoes, the
balance of power at the root of this country's governmental system dictates
that the responsible and right thing to do is for Congress to take action
to clarify the intent behind the Antidef iciency Act and put an end to the
perennial threat of a government shutdown which looms over Washington. If
Congress fails to act on this most important policy issue the balance of
power may tip. The executive branch may trespass upon Congress' control of
the purse strings in an effort, during a lapse in appropriations, to make
the government "workable".
590
Mr. Mica. I thank the gentleman and would now like to recog-
nize for 5 minutes Mr. Browder of Alabama.
Welcome.
Mr. Browder. Thank you, Mr. Chairman.
I let others talk about why we had the shutdown and how to fix
it so we don't have it in the future.
Mr. Mica. Excuse me for a second. I didn't properly recognize
you. You have a bill, and your legislation is to provide that the
President and Members of Congress shall not be paid during the
Federal Government shutdowns; is that correct?
Mr. Browder. Yes, sir.
Mr. Mica. Mr. Gekas is leaving on that note. [Laughter.]
I want to make sure that I cite the intent of each of the bills.
So you are recognized. Go ahead.
Mr. Browder. Mr. Chairman, I have submitted a written state-
ment. My remarks will be brief.
It is very specific problem, and I think I can offer a very specific
correction for that problem. I don't have a heck of a lot of Federal
employees in my district. I imagine I'm average for a Member of
Congress. So whenever this happened, they asked me a very simple
question. They said, "I bet you guys are going to get your paycheck
Friday." And I came back — I didn't know; I asked — I even had trou-
ble getting it out of my own staff — that we're treated differently.
This is a question of fairness that we can easily address. Just as
it is not right for Congress to isolate itself from the impact of its
mandates on business, it should not have immunity from the im-
pact of its decision on people's lives. Yet it does. Unlike other gov-
ernment salaries, a permanent appropriation funds congressional
salaries, while the President's salary is protected by the Constitu-
tion. This situation allows the President and Congress to escape
the pain that they inflict.
Unfortunately, bills that deny pay during a shutdown, for con-
stitutional reasons, will have to wait until after the next election
to be effective. And I don't want to engage in Congress-bashing or
President-bashing. We all believe that people should receive pay for
work, but there is a difference between myself and the staff that
I asked to work, without knowing whether they would be paid or
when they would be paid.
So we have another crisis. Three weeks ago, when I introduced
this bill, I said, in 3 weeks we may be facing this same kind of situ-
ation. We are facing that situation. That's why I'm here testifying,
asking you today to put this minor correction into whatever legisla-
tion you draft. This legislation rejects a strict pay cut mechanism
and opts for placing Congress and the President in the same situa-
tion as Federal employees who stay on the job during a shutdown.
Our goal isn't to coerce an outcome in policy by taking away
earned pay. We simply want to remind Congress and the President
of the real problems regular people face when their paychecks are
tampered with. This will remind us, as we go about trying to find
a solution, of the burden that these people are undergoing. It will
communicate to the Federal workers who are working during this
crisis that we do have sympathy for them. If they are going to have
to work for 6 months during a shutdown, they won't draw their
paycheck till the 6 months are up. We should do the same thing.
591
It will send a message to the American taxpayer, who doesn't
care about either one of us when this happens, the burden that
we're placing on ourselves, but they do need to understand and I
think they would appreciate knowing that we. Congress and the
President, consider that we and the Federal employees who are
working and the taxpayers are all in the same boat.
Mr. Chairman, I appreciate your allowing me to present this
rather minor piece of legislation that I think has importance to the
people that I represent and a lot of people outside of this area.
I would ask if the chairman would mind if I be excused from the
panel to attend a 3:30 appointment. And I've got a feeling that
most of the questions that your Members are going to ask are di-
rected to those who know why this shutdown occurred and how we
can stop it next time.
I yield back the balance of my time.
[The prepared statement of Hon. Glen Browder follows:]
592
Testimony of the Honorable Glen Browder
before the Subcommittee on Civil Service
of the House Committee on Government Reform and Oversight
December 14, 1995
Mr. Chairman and members of the Subcommittee on Civil
Service, thank you for holding this hearing on a subject of great
interest to federal civil servants as we face the prospect of
another government shutdown. That is whether the people who
precipitate the shutdown should be isolated from its effects. I
introduced H.R. 2671 on November 20 to address this issue.
In November, for the first time in 10 years we closed the
doors of government during a workweek. CXir actions left 398,756
federal workers who stayed on the job without a guarantee that
they would be paid on time. Approximately 800,000 furloughed
workers had no idea whether they would receive paychecks at all.
These are people who had mortgages, car payments, children's
dental bills, groceries -- the purchase of all the necessities of
life -- dependent upon that next paycheck. What of the decision
makers who put these people's financial security on the line?
Members of Congress and the President enjoyed immunity from the
consequences of the shutdown. At a time when we have been
dismantling the Congressional system of privileges, we exercised
the privilege of a protected, timely paycheck while people
suffered and the work of the government ground to a stop.
Just as it is not right that Congress isolated itself from
the impact of its mandates on business, it should not have
immunity from the impact of its decisions on people's lives. Yet
it does. Unlike other government salaries, a permanent
appropriation funds Congressional salaries, while the President's
salary is protected by the Constitution. This situation allows
them to escape the pain they inflict. But their actions have
real world consequences. A $18, 000-a-year clerk in my District
has to wonder if she will be able to pay the power bill, while
Congress collects its $130,000 salary on time. These are people
whose lives that are being disrupted. No matter how important
the policy Congress and the President shouldn't forget that.
Unfortunately, bills that deny pay during a shutdown, for
Constitutional reasons, will have to wait until after the next
election to be effective. The crisis is this year. That is why
I wrote H.R. 2671 to apply new budget rules to this year's
Congress. It rejects a strict pay cut mechanism and opts for
placing Congress and the President in the same situation as
federal employees who stay on the job during a shutdown. This is
the most responsible and sensible approach. Our goal isn't to
coerce an outcome in these policy disputes by taking away earned
pay. We simply want to remind Congress and the President of the
real problems regular people face when their paychecks are
Page 1
593
tampered with.
Ideally, this would be a moot issue. If Congress had done
its work on time, I don't think anyone would have dreamed up a
bill like H.R. 2671 just as a good idea. The last weekday
shutdown occurred in October 1985. That is why this hasn't been
an issue deserving committee attention before now. However,
things move in trends, and the trend is toward more
confrontational government. Congress and the President should
not use federal employees for cannon fodder on their policy
battlefield. If they do, then the decision makers should have
some shared experience with those they are sacrificing.
H.R. 2671 would apply the same rules to the President and
Congress that apply to federal workers who stay on the job.
These two are the principals in the appropriation process who
must reach agreement. H.R. 2671 is a non-coercive way of
reminding them of why they need to reach agreement.
Page 2
594
Mr. Mica. I thank the gentleman for his testimony. There may
be some questions about your proposal, and some of the members
of the panel or staff may want to confer with you on some details,
because we may take some action on this. I thank you for your tes-
timony.
I now recognize Mr. Barton from Texas. Mr. Barton has a bill
which would allow employees of the U.S. Government, who are
placed under furlough, to volunteer to continue working.
Mr. Barton, welcome. You are recognized for 5 minutes.
Mr. Barton. I thank the distinguished chairman and members
of the subcommittee. I will submit my written testimony and try
to paraphrase it.
Like Mr. Browder, I don't have many Federal employees. I'm not
near the Nation's capital. So, in one sense, I don't have a dog in
this hunt. But in the sense that I represent 600,000 taxpayers, I
think I do have a reasonable reason to be somewhat concerned
about it.
Prior to being in the Congress, I was a plant manager and then
worked as an assistant to the vice president of a printing company.
One of my plants was a nonunion plant, and another was a union
plant. So I became familiar with labor union law. And in trade un-
ionism there is such a thing as a lockout, where a union threatens
a strike, or maybe actually goes on strike, and in retaliation to that
they lock the workers out.
Federal employees, though to my knowledge, can't go on strike.
We fired the air traffic controllers because they went on strike ille-
gally. So it would seem to me that if a Federal employee can't
strike, then it should be illegal for the government to lock them
out. That's the law of the land.
So I got to thinking, when we had this shutdown, it's not the
Federal workers' fault. Now, it may be bad public policy that we
have an agency that's in existence, but it's not the workers' fault.
The worker has been hired to do a job, reports for work, tries to
do the job that the Federal agency is asking them to do.
So how do we resolve this when there is a political confrontation
or a public policy confrontation that results in part of the Federal
Government shutting down? And the solution that I've come up
with is that we shouldn't allow there to be a Federal lockout. We
need to let those workers who wish to come to work do so volun-
tarily.
You might ask yourself, were there workers that tried to work
voluntarily in the last shutdown? There were literally thousands,
but there is one case that I think deserves special scrutiny. A gen-
tleman who works for the National Park Service, named Bill
Fink — and if ever a person was misnamed, it's Mr. Fink — he's a su-
perintendent of the Keweenaw National Historic Park in Michigan.
His post was deemed to be nonessential, but, as superintendent of
the park, he decided he wanted to stay and work.
So he told his supervisor that he was going to stay and work.
And they notified the General Counsel's Office in the Interior De-
partment, and the Interior Department notified him that they were
preparing to file criminal charges if he, in fact, showed up for work.
He did show up for work; he was cited.
595
You might think that now that the shutdown is over, this case
has been dropped. That is not true. On December 13, Mr. Fink was
visited by an investigator from the Department of Interior, and the
Department is, apparently, filing criminal charges against the su-
perintendent for deciding that, even though he was deemed non-
essential, he was going to go into his park and continue to do his
work. There are other cases of Federal workers that took work
home and tried to sneak into buildings.
To make a long story short, I think there's a way around this.
I have filed two bills, one of a temporary nature, one permanent,
that would amend the Antideficiency Act so that, in the event of
a future government shutdown, those Federal workers that wanted
to volunteer to come and do their job would be allowed to do so.
They could not be locked out.
The bill is silent on whether they would be paid or not. My as-
sumption would be that, if somebody volunteered to come to work,
at the appropriate time they would be paid. The bill doesn't say
they have to, and it doesn't say they cannot be, but it would say
they could not be locked out.
I've got two bills, the most recent filed this week, which would
permanently amend the Antideficiency Act so that these Federal
workers that voluntarily want to come and do their job, in the
event of another shutdown, could do so. I've got a number of co-
sponsors, and I would hope this subcommittee would look at some
version of this bill in a family friendly way in the very near future.
I would yield back the balance of my time.
[The prepared statement of Hon. Joe Barton follows:]
596
Testimony of
Congressman Joe Barton of Texas
before the
Government Reform and Oversight
Subcommittee on Civil Service
December 14, 1995
Dear Mr. Chairman and Members of the Subcommittee:
Thank you for giving me the opportunity to speak before your
subcommittee. I appreciate the opportunity to come before you and I am glad
you are taking up these important issues.
Mr. Chairman, I was amazed to learn during the government shutdown
in November that federal employees who were placed on furlough were not
allowed to come to work, even if they volunteered. I strongly believe this
provision of the law needs to be changed - volunteers should be allowed in the
door.
On the first day of the shutdown, November 21, 1995, Bill Fink,
Superintendent of Keweenaw National Historic Park in Michigan was told to
go home. His post had been determined "non-essential." If he wanted to, he
could have gone home to his family, gone shopping, gone fishing, or done
anything. He did not have to work.
But Mr. Fink had work he wanted to accomplish. He notified his
supervisors in the National Park Service that he planned to stay and complete
597
his work. The very next day, he was notified that the Secretary of the
Interior's Office of Legal Counsel was preparing to file criminal charges
against him. He was in violation of the Antideficiency Act, which governs
shutdowns. That violation could result in prison time. In addition to
prosecution, he was threatened at different times with a fine, a reassignment,
suspension, and a written reprimand.
As you can imagine, Mr. Chairman, members of his community and area
newspapers rallied to the side of this man who just wanted to do his job.
While Mr. Fink's status is uncertain, no one has told him for sure if the
criminal charges will go away. In fact, just yesterday, December 13, 1995,
Mr. Fink was visited by a investigator fi-om the Department of Interior.
By threatening Mr. Fink and prohibiting federal employees from
working, we are ignoring the sense of duty, obligation, and service that he and
others show, and crushing the American spirit of volunteerism.
This is ridiculous. During shutdowns, government agencies are and
should be prevented from expending funds and entering into contractual
obligations. But there is no reason to prevent people like Mr. Fink from
working if he wants to.
I am told that many other fiirloughed federal employees who wanted to
work actually took their work home. In some clandestine fashion, they
apparently had to hide at home from their supervisors, who amazingly did not
want them to do their jobs. This is not what government service is about. We
want more efficiency from the federal government, not less.
598
I have introduced legislation to make this important change. H.R.2667,
which was introduced on November 19, 1995, and referred to this
subcommittee, would have allowed the government to accept volunteer services
during the last shutdown. Yesterday, I introduced H.R.2769, which would
make the same change but do so permanently. Joining me as original
cosponsors were Congressmen Mark Souder, Larry Combest, J.C. Watts, John
Ensign, Duncan Hunter, Greg Laughlin, and Steve Stockman. I expect this
bill to be referred to this subcommittee, if it has not already.
I would like to work with the members of this subcommittee to pass this
legislation before any future shutdown begins. With this new law in place, the
sense of duty and the volunteer spirit of many of our Nation's federal
employees could result in more parks being opened, more important questions
answered, more routine services available, and generally more work
completed.
While the members of this subcommittee may disagree on spending
priorities for this fiscal year and beyond, I would expect you all agree that
office doors should not be slammed shut on volunteering employees who offer
to work. Let's make the needed change. Let's pass H.R.2769.
I thank the subcommittee for its time and would be happy to respond to
any questions.
599
Mr. Mica. I thank the gentleman and recognize Ms. McCarthy
from Missouri.
I don't think you have a bill, but you did want to address these
issues. So, welcome, and you are recognized for 5 minutes.
Ms. McCarthy. Thank you, Mr. Chairman. I would like to thank
you and the members of your subcommittee for having this hear-
ing.
I am not here to speak on behalf of or in opposition to any piece
of legislation today but to put some faces to the numbers as we ad-
dress this important issue of what to do about a shutdown. I would
like to let this subcommittee know that I am a cosponsor and a
whip of the balanced budget amendment that did pass the House,
and also 1 of the 68 who voted for the coalition budget, which does
balance the budget within 7 years.
I represent Region VII, in large part, which is housed in Kansas
City, where 16,000 Federal employees from numerous agencies do
work and do serve and do call it home. Our failure to enact a set
of appropriation bills on time had a wide-ranging effect on their
families and on my community. As a result of the November shut-
down, 10,000 Federal employees in my district were furloughed,
and people who needed help couldn't get it.
It hurt my constituents in many ways and on a personal level,
and that's what I wanted to share with you today. I received, of
course, as all of you did, numerous letters and calls. My written
testimony does highlight some of those, Mr. Chairman. Mary Alice
Kelly of Raytown, with two children and pregnant with a third, her
husband was furloughed. She was frantic about the delay in pay-
checks, and she wrote me to say that it makes her very angry. "I
feel like everyone is playing the political posturing game and we're
toys," she said, "What am I supposed to do to pay our bills?"
Her story is indicative of many others throughout the country, of
course, who were prevented from working for almost 1 week. My
own Kansas City Star editorialized that Federal workers deserved
better, and I quote: "Summarily dismissed as nonessential and sent
home to anxiously await word of funding for their livelihoods, they
endured predictable cheap shots from comedians, radio talk show
hosts, and pandering politicians, while an increasingly hostile pub-
lic attacked them for being on paid vacation."
But the shutdown hurt my district and all of our districts in an-
other important way, and that was a lack of service to the Amer-
ican people. In our region, we were not able to provide many of
these. Our Department of Housing and Urban Development nor-
mally process nearly 100 FHA loans daily from the area. No loan
applications were authorized during the shutdown.
Passports were not available; Medicare and Social Security appli-
cations were not processed. Contractors, small businesses, some
mom and pops, many minority were unable to proceed with projects
that could not be inspected. EPA inspections went undone, which
will have an effect, long-term, on our environment.
OS A suspended clerical and custodial workers, and that had a
ripple effect throughout my community of $41,000 every day that
the government was shut down. But the real tragedy, of course,
was the people who needed these services, and that is what I would
like to prevent in the future.
600
So I'm here today to urge cooperation in passing the remaining
appropriation bills so that government continues without interrup-
tion. That is the solution, for us to get the job done.
I come to you, by the way, with experience, 18 years, in the State
legislature, in the Missouri House of Representatives, and for most
of those 18 years, service on the House Budget Committee, and for
12 of those 18 years, as chair of the Ways and Means Committee.
And every year we balanced our budgets.
It wasn't easy. Choices were many times very difficult, but we
got the job done. And I think that's what the American public and
certainly all the Federal workers are asking of us now.
I thank this committee for this opportunity to provide testimony
and would be happy to answer any questions, Mr. Chairman.
[The prepared statement of Hon. Karen McCarthy follows:]
601
TESTIMONY OF REP. KAREN MCCARTHY
BEFORE THE SUBCOMMITTEE ON CIVIL SERVICE OF THE
HOUSE COMMITTEE ON GOVERNMENT REFORM & OVERSIGHT
THE HONORABLE JOHN L. MICA, CHAIRMAN
THURSDAY, DECEMBER 14, 1995
Mr. Chainnan, members of the committee, thank you for the opportunity to testify on behalf on
the federal employees in the fifth district in Missouri. I want to commend Chairman Mica for
holding these hearings, which focus on a government shutdown contingency plan particularly its
effects on federal employees.
This hearings is timely because, as you know, the Continuing Resolution that Congress passed
and the President signed is due to expire tomorrow.
I am especially grateful for the opportunity to testify today. The fifth district of Missouri, which
I represent, is in the top ten percent of all Congressional districts representing federal
employees.
Kansas City is the Region VII home for a wide collection of federal agencies, including The
Social Security Administration, the Departments of Agriculture, Commerce, Energy, Interior,
Justice, Labor, Transportation, Treasury, and the General Services Administration.
These agencies employ almost 16,000 employees in Kansas City.
In addition, there are also 7,000 civilian retirees, 2,000 military retirees and 432 military
persoimel in the Fifth District.
1
602
This failure to enact a complete set of appropriations bills had wide-ranging effects on American
families, industry and services. As a result of the November shutdown 10,000 federal
employees in my district were furloughed, and people who needed help couldn't get it.
The shutdown hurt my constituents in many ways and in a very personal level:
Mary Alice Kelly of Raytown, Missouri wrote a very thought-provoking letter to me during the
six-day shutdown in November. Her husband works for the Department of Interior and her
family was directly affected by the shutdown. Mrs. Kelly has two young children and was
pregnant with a third when ijer hi^Snd was furloughed. She wrote to me regarding her
frustrations with a delayed paycheck^St makes me very angry. I feel like everyone's playing
the political posturing game and weTFthe toys. What am I supposed to pay our bills with?!"
Mrs. Kelly's story is indicative of thousands of federal employees who were prevented from
working, for almost one week.
I would like to read an excerpt from an editorial that appeared in the November 28th, Kansas
City Star entitled: Federal Workers Deserve Better:
Government workers were,
" sununarily dismissed as non-essential and sent home to anxiously await word of funding of
their livelihoods, they endured predictable cheap shots from comedians, radio talk show hosts,
and pandering politicians, while an increasingly hostile public attacked them for being on paid
vacation. "
603
The shutdown hurt my district in another important way: the lack of service to the American
public. The federal government was not able to provide valuable services to the Kansas City
area residents. Mortgages were not processed, passports were not available. Medicare and
Social Security applications were not processed.
Even our nation's historical parks and monuments were not available to the public, including
closing the Truman Library in Independence, Missouri.
These are real, tangible services that federal employees perform, day in and day out ~ services
the average citizen takes for granted until the services are suspended because of our inability as
elected officials to achieve a consensus and pass spending measures.
I'm here to urge cooperation in passing the remaining appropriations bills so that government
continues without interruption.
It is time to realize that the lack of consensus between this Congress and the President really
hurts those who are only trying to perform their jobs and serve the United States to the best of
their ability. And the taxpayers they are entrusted to serve.
Our inability to cooperate is taking its toll on the American people and its time to stop.
604
Mr. Mica. We thank the gentlelady for her testimony.
Now I would like to recognize the gentleman from California, Mr.
Bono, who I believe has a bill.
It hasn't been referred to us yet, but maybe you could describe
it. You are recognized for 5 minutes.
Mr. Bono. Thank you, Mr. Chairman.
First of all, I do want to address what I hear often about the
shutdown, the so-called "shutdown," of people bickering, politicians
acting like little kids, and why don't they grow up, and all of us.
And that kind of astounds me, because, you know, there's a — from
my standpoint — there's a huge position here. The position is, we
must balance the budget, and we can't get it balanced.
So, at a certain point, you say, "Well, balance the budget or I'm
not going to budge. I am going to stick to a position." Now, if oppo-
sition says, "Well, I'm going to stick to another position," you can't
appropriate blame to me, directly. He may have his position; I have
my position. My position is, if we don't balance the budget, we're
going to hit a wall going 190 miles an hour. So the budget has to
be balanced. So much for that.
As far as politicians bickering or being little boys or girls, or
playing games, this is no game. This is incredibly serious. I don't
enjoy not being home with my wife and my children, but I want
to stick to my guns, and if I have to spend Christmas in this build-
ing, then I'll spend it in this building. But now that I have arrived
at this issue, I'm going to stick to it, and it's not being a little boy
or a little anything. It's my position, and that's why I am a Con-
gressman, certainly not because I'm a politician. So that's my re-
sponse to that.
Second, I just want to say, why punish staff. Let's issue them
lOUs and let them work. We did it at a State level. They got their
lOUs, government stayed open. So they don't have to get in the
fight. Why bring them into the fight? The fight is me and you, and
you and us; it's not the staff. So they shouldn't be punished. If they
want to work, give them an lOU, and let them go cash it and keep
the money and have Christmas and get through this thing. We'll
take the brunt.
So H.R. 2759 allows employees to continue working during any
shutdown but also provides them an lOU. This is a proposal that
has worked well in my home State of California in the past, during
some of its budget problems and shutdowns. In California, people
were able to go to the bank with that lOU, and it was honored. My
bill avoids the problem of forcing us, and so on.
Anyway, some of this was found to be — there were legal prob-
lems. We can overcome these legal problems. I think we should,
and I think that would solve this whole issue. So my proposal is
simply that we issue lOUs, not penalize staff, and we stick to our
position, which I intend to, with every fabric in my body.
So I thank you, Mr. Chairman.
[The prepared statement of Hon. Sonny Bono follows:]
605
Statement of Congressman Sonny Bono
December 14, 1995 - Committee on Government Reform and Oversight
Thank you Mr. Chairman, I am delighted to have the opportunity to testify on this important subject.
My bill makes a very simple proposal. Of course, no one really wants to shut down the government.
Both sides now admit that they want a balanced budget. We are trying to get there. However, during the last
shut down, something terrible happened.
Bureaucrats got a paid vacation.
This costs the government millions of dollars in lost productivity. These people were not even allowed
to volunteer for work. Of course, I do not want innocent people to be the victims of the process. Thus, I am
proposing a way of protecting both the taxpayer and the employee.
My bill, HR 2759, allows employees to continue working during any shut down, but also provides them
with an "lOU." This is a proposal that has worked well in my home state of California in the past during some
of its budget problems and shut downs. In California, people were able to go to a bank and have that lOU
honored. My bill also avoids the problem of forcing people to volunteer without the guarantee of being paid.
Of course, my suggestion is a solution to the shut down — what is a temporary problem.
Hopefully, Congress will review my bill on the merits, and pass it quickly. Ending the practice of a
"paid vacation" is a necessity. It is fair for both taxpayers and federal employees.
Again, I thank you Mr. Chairman, and I yield the balance of my time.
606
Mr. Mica. I thank the gentleman, and all of the panelists for
their testimony. We certainly have a wide variety of opinions on
how some of these matters should be handled, and hopefully it is
reflective of the House, and the committee is designed to sort
through that.
I would like to first recognize Mrs. Morella for questions.
Mrs. Morella. Thank you.
I again want to thank my colleagues on the second panel who are
trying to come up with some solutions to this problem of the shut-
down of government and also indicating that, too bad we are even
looking for solutions, because the solution really lies with us, in
terms of the need for leadership.
First of all, with Mr. Gekas, I thought your story was, unfortu-
nately, so true with regard to the continuing resolution, which I am
cosponsoring with you, which I think makes eminent sense.
Ms. McCarthy, you know, I found it very interesting when you
talked about the problems with the shutdown and the impact, and,
of course, I couldn't agree with you more. You said 10,000 people
out of 16,000? Good heavens, it seems like such an inordinate per-
centage of employees. Maybe you want to comment on that.
Ms. McCarthy. Well, that was actually part of the tragedy of it,
10,000 of the 16,000 were told they were nonessential.
Mrs. Morella. Nonessential.
Ms. McCarthy. Imagine how they feel. And as I mentioned, they
became the ridicule of, you know, the talk show hosts, and so forth,
for even having a Federal job at all, which wasn't the issue, in my
mind. These are people who wanted to work and are necessary for
the running of this government, and were denied that opportunity.
Mrs. Morella. But what Federal agencies do you have there?
Ms. McCarthy. Social Security Administration, Departments of
Agriculture, Commerce, Energy, Interior, Justice, Labor, Transpor-
tation, Treasury, and GSA.
Mrs. Morella. That just seemed like such a high number, but
I couldn't agree with you more, in terms of the personal situations
and putting a face on all of that.
Ms. McCarthy. Thank you.
Mr. HoYER. Mrs. Morella.
Mrs. Morella. Mr. Hoyer.
Mr. Hoyer. If I might just comment on Ms. McCarthy's answer,
the reason her percentage was so high, of course, was because,
other than ATF, the agencies that are represented there are essen-
tially non-law-enforcement, nonemergency services agencies. And
in those agencies you had a much higher percentage.
There are approximately, as you know, 1.95 million Federal em-
ployees, 800,000 of whom were laid off, so that's about 50 percent.
But in some agencies — the Treasury Department, for instance —
there are and Justice, large numbers of law enforcement officials.
So that is why the percentage seems to be higher.
Mrs. Morella. We also have had another hearing on this, and,
of course, we have all felt that it is so wrong to say someone is es-
sential, someone is not essential. I guess the term we are trying
to use, if we have to use a term, is "emergency" and "non-
emergency," as such, because it is so demoralizing to use that ex-
pression.
607
Mr. Barton, I am familiar with your bill.
Mr. Barton. You were a cosponsor.
Mrs. MORELLA. I know, I was. I was for that moment. It was like
a snapshot of a moment. It sounded so great, because I knew I had
people at NIH, for instance, who found a way through the back to
get in, because they wanted so badly to continue with the kind of
research they were doing. So I recognize that commitment to public
service.
I guess my concern is one that I think I heard Mr. Hoyer talking
about, too, and that is, if you then are going to let people volunteer,
you know, why do you have a shutdown at all. I guess that's the
real problem.
Mr. Barton. There may actually be a public policy dispute that
it's not inappropriate to officially shut down some functions of the
government, but that's a dispute that the Congress, sometimes be-
tween the parties or the Congress and the President, are going to
fight out in the public arena. While they are fighting it out, I don't
think it's appropriate to tell a Federal employee, who has been
openly hired and tasked to do a job, that, while we get our public
policy discussion in order, they can't do their routine work.
By allowing those that wish to come in and volunteer, whether
it's in the Passport Office or the Agriculture Department, or what-
ever, we're not making Federal employees pawns. Now, it could be
that, in the public policy discussion, we decide that you don't need
as many Agriculture employees, but that's a different issue.
So, by allowing people to volunteer, you simply say, if you've
been hired to do a job and want to do the job, we should not lock
you out from doing that job while we have this dispute.
Mrs. MORELLA. I think your intention is a good one, but I would
also be concerned about possible recriminations that would occur to
those people who desire not to volunteer.
Mr. Barton. That's not a Federal issue. If you've got a super-
visor who wants to be retaliatory or a union organizer in those de-
partments that allow Federal employees' unions, then that, in and
of itself, is a local issue that would be subject to due process and
arbitration and all that.
Mrs. MORELLA. Probably years later.
Mr. Barton. We can't micromanage something like that, and you
just have to depend that most people will operate in a good faith
fashion, and let the locals work out the particular problems that
arise.
Mrs. MORELLA. My other problem is, too, they may say, well, if
you can work with volunteers here, 50 percent of the people who
volunteered came back, but the other 50 percent who didn't come
back, maybe we can cut the budget of that department, or maybe
we don't need those others who don't do it.
Mr. Barton. Well, again, if that literally is true. Congress-
woman, then we've got Federal managers that have fallen down on
their jobs, and we have oversight committees of the Congress that
have fallen down on their jobs. I certainly don't sense, to pick an
agency, the Social Security Administration, that you've got 50 per-
cent of those Federal workers that don't have productive work to
do. And I can guarantee you, in Texas, if you go to the Immigration
and Naturalization Service, they are overworked, quite frankly.
608
So there may be some Federal agencies that are overstaffed, but,
at the retail level where our constituents go in and need some-
thing, there are very few of those employees that are underloaded.
Mrs. MORELLA. You would pay them during that period of time?
Mr. Barton. Well, my bill is silent on that. I mean, one would
assume they wouldn't be paid automatically, but Congressman
Bono's idea of an lOU, I think Congressman Burton has got, at
least in a draft stage, a bill, I would assume that people, at some
time, who volunteered to come to work would be paid, perhaps
retroactively. I would also assume that those that didn't volunteer
perhaps not be paid or might not be paid as expeditiously, or might
be paid on a prorated basis. But my bill is silent on that.
Mrs. MoRELLA. I think the answer is that we should do all we
can to avert a shutdown.
Mr. Gekas. May I comment on that, if the lady would yield.
Mrs. MORELLA. Yes, I yield.
Mr. Gekas. We have many different kinds of solutions here. The
gentleman from California has come up with what California expe-
rienced in the lOU thing. I, myself, as the lady from Maryland
knows, the gentleman from Virginia knows, have worked out a sys-
tem where a major bank would be willing to come into play and
give noninterest loans to the employees during the time that the
government is shut down, with the government guaranteeing that
they will pay them back out of the first paychecks, that type of
thing.
But what we're talking about is engaging in knowing there's
going to be a shutdown; we're going to plan for shutdowns. And I
think we ought to get away from that and concentrate on avoiding
a shutdown. These plans are wonderful and they are ingenious,
and I commend the gentleman from California, the gentleman from
Texas for these ideas. I have 100 others like that, but all of them
can be obviated, unnecessary by going into instant replay.
Mrs. MoRELLA. I agree. I agree. I think I said that from the very
beginning, this is what we've got to do is not have to be concerned
that there will be a shutdown.
Mr. Gekas. I know.
Mrs. MoRELLA. I always can tell you're from California, Mr.
Bono, when you have some of these ideas, that lOU.
Mr. Bono. I'm glad you didn't say Hollywood.
Mrs. MORELLA. No, I didn't.
Mr. Bono. It appears to me that this is the most effortless. It's
an lOU. It's like money. It's no burden on staff. And it seems rel-
atively painless. Again, none of us want to say, you know, we are
digging in and we're going to war. But I think the position that I've
arrived and why I'm in this building is that we are here finally
talking about a balanced budget. I missed Thanksgiving. I might
as well miss Christmas, you know. Let's go.
I'm not saying do it, but I just want the other side to know that
if they're going to press it, I'm not going anywhere. So I'm not say-
ing I'm insisting that we continue this battle, but we have taken
our position, and it's a good one, and I'm willing to stand behind
it as long as I have to stand behind it, until the gentleman signs
the balanced budget.
609
Mr. HOYER. Mr. Chairman, I have polled the panelists, we are
not with him on Christmas.
Mrs. MORELLA. Thank you, Mr. Chairman.
Mr. Mica. I thank the gentlelady for your response. Unfortu-
nately, I think he's got 72 others that have taken the blood oath,
the Christmas blood oath.
With that, I will recognize the ranking member.
Mr. MORAN. You're telling me there are 73 Members of the
House that want to work on Christmas Day. Holy smokes.
Mr. HOYER. That's the Christian Coalition group.
Mr. MORAN. Very family friendly.
Mr. Burton. That will be enough out of you, Hoyer. [Laughter.]
Mr. Hoyer. But you liked it, didn't you?
Mr. MORAN. Poor Frank Wolf. Of all times to start a family
friendly caucus. OK.
I agree with Mrs. Morella's observation about the California
plan. But let me address what Mr. Hoyer has suggested, and it's
consistent Mrs. Morella, and Mr. Gekas has made this point very
strongly, as well. We ought not be shutting down the government,
and, to the extent we do, it is going to cause ramifications that will
extend far beyond the point when we put it back together again.
This is not something that we can do in any kind of cavalier way.
Every American citizen is in some way dependent upon Federal
services, and they will find out how dependent they are upon those
checks and upon that assistance and upon those national parks,
and ever5^hing else, if we do this very often or for very long.
So I couldn't agree more that the ultimate objective should be not
to shut down the Federal Government. But given the fact that we
live in a very imperfect world, particularly up here, and that
there's a very real possibility that government employees could be
furloughed again, I think we need to take some measures to see to
it that Federal employees are not made pawns again in this politi-
cal brinkmanship, if you will, that is transpiring. That's why the
legislation that we have suggested, I would hope would be accept-
ed, would get passed this weekend.
In terms of Mr. Gekas' legislation, I think that there is a prob-
lem, George, with the instant replay, and I can understand that
there might have been reasons beyond the political reasons to op-
pose that. Because, if you play it out, if you go with the lower of
the House or Senate, permanently, it seems to me that the House
can get its way if it simply appropriates at a level a couple million
dollars less than the Senate.
In other words, what you've done is to take the President, the ex-
ecutive branch, out of the picture. And I think you could abuse the
process, or gain the process, if you will, if you were able to accom-
plish that, just by getting to a lower dollar level on an individual
program that you chose. So you might address that, because I know
it's a very serious piece of legislation you propose.
The second one that you put in, I think you put it in a couple
days before I put mine in, it must have been back in July, or some-
thing, that's very similar. That is a different piece of legislation,
and I think that would be a simpler one to deal with. But perhaps
you could address the first concern.
610
Mr. Gekas. Yes. The first one, first of all, you know we did have,
perhaps more than one time, a continuing resolution that remained
in place for a full year. So the concept that I am talking about has
actually been a part of the precedent and history of this institution.
So it's not something strange to contemplate that.
What would that mean? That would mean a freeze of last year's
budget, more or less. And many of us have, for many years, the
gentleman from California will be happy to hear, advocated a
freeze as part of the march toward a balanced budget. So the CR
that I contemplate that goes into effect automatically because we
have this train wreck occurring, would, at its very worst, simply
freeze last year's budget or the lowest appropriation.
The question that you asked implicitly is, do we rob the White
House and the majority in the Congress of bargaining, negotiating
necessity? And we do not. For instance, just take this year's plan.
Mr. MORAN. Mr. Gekas, if I could just interrupt for a moment.
I wanted to thank Mr. Hoyer and Ms. McCarthy for coming and
testifying. We appreciate your testimony. I share the chairman's
sentiments that it was very helpful to us.
Mr. HOYER. I thank the ranking member. And, Mr. Chairman,
thank you. This is a serious subject that all of us have grappled
with almost from the time we came here, because none of us think
that this is a rational process, and how to avoid it or how to cope
with it is a serious subject. I thank you for having the hearing.
Mr. Mica. I thank those Members who must leave now, and we
will continue with the hearing.
Mr. Gekas.
Mr. Gekas. Yes*. Let me give you an example of how the negotiat-
ing power of both parties, the Congress and the White House, is
not diminished by my legislation. If the majority on the Republican
side this year wants to continue negotiating power, they feel they
lose it by my type of legislation. They think a shutdown would give
the leverage for this negotiation.
The Republicans want to zero out a couple of programs. In the
current arena in which we work, they want to zero out a couple of
programs. The President is shocked by that, doesn't want to even
hear about zeroing out some of what he might consider his pet pro-
grams.
So now, if my bill goes into effect and last year's budget or the
other numbers are in place, that does not allow for the zeroing out
of a program that the Republicans want to see happen. And the
President, who says to them, "I'll never sign a bill that will zero
out this program, but, I'll tell you what, if you give me increased
appropriations on this education thing which you are reducing and
put that up to a level, I'll sign the zeroing out of that other pro-
gram that you want."
In other words, there are many facets of the budget that are still
negotiable, even when the new CR goes into effect at last year's
levels. We don't lose this imaginary wonderful negotiating power
that the Democrats of the past felt that they were sacrificing by a
CR and would be enhanced by a shutdown, which now the Repub-
licans have adopted as their rationale for negotiating.
So I'm willing to sit down and analyze with the gentleman from
Virginia how the CR, at any level, allows negotiation, does not cut
611
out the President at all, and gives him reason to come to a new
budget.
Mr. MORAN. Thank you, Mr. Gekas. Would you support the legis-
lation that is so similar to yours, that Mr. Burton, Mr. Mica, and
I are proposing, that we tried to bring up on an expeditious basis?
Mr. Gekas. I have an ego, but I don't have any pride of author-
ship on this piece of legislation. I have learned, for instance, that
there is whirling around in the Senate, even as we speak here,
something like my piece of legislation, with whom I've had many
discussions. Senator Mikulski, Senator Warner, Senator Stevens,
others who are interested in implementing this kind of legislation.
However it works, if it works, I will be applauding just like you
will.
Mr. MORAN. Thank you, Mr. Gekas.
Mr. Mica. I thank the gentleman. I yield now to Mr. Burton.
Mr. Burton. Well, I'll just take a minute. First of all, I really
appreciate you guys working so hard and taking the time to stay
here, especially when we're out of session and you might be able
to get home with your wife and kids, and we've been working these
long hours.
I hereby dub Sonny Bono the "Pit Bull of the House." I tell you,
you are true grit. I love you.
One thing about your bill, Joe — Representative Barton.
Mr. Barton. "Joe" is fine.
Mr. Burton. We did some checking, and when you use the term
"volunteer" in conjunction with what we're trying to do, there's a
question of constitutionality. Did you check that out?
Mr. Barton. Congressman, I have not. I did not know that the
word "volunteer" had to be defined.
Mr. Burton. Well, there is a provision which I believe says that
you can't be a volunteer and work for the government. You can't
be a voluntary employee.
Mr. Barton. Well, my intent is that employees that were em-
ployed as of the date of the official shutdown could continue to do
their job if they wished to. That's my intent.
Mr. Burton. I understand.
Mr. Barton. But I'm certainly open to redefining the word "vol-
unteer."
Mr. Burton. Well, we'll work with you on that, and we'll work
on that in our bill, as well.
Representative Gekas, that's a very innovative idea. I'm not sure
I see anjrthing wrong with that. I don't know if we can get it
passed, but it does have a lot of merit.
Regarding Sonny Bono's proposal for the lOU, that might be a
very graphic way to let the American people know that we're
spending way beyond our means, if we start giving out lOUs to em-
ployees. So I'm not so sure that's really all that bad an idea either.
It might put more emphasis on the trend to a balanced budget.
I don't think Mr. Browder's approach, saying no pay, would fly.
I wish he were here. The reason is, I think the President could
wait out the Congress, because there are a lot of Congressmen that
simply could not survive if they started holding their paychecks.
And if we were in a hard negotiating session, the President could
sit down there at the White House and have dinner and lunch, and
612
survive without pay for a much longer time than I think Members
of Congress. He's got his house paid for, and I don't. So I think he
could outlast me.
Mr. Barton. The other difference on that particular issue is that
the Congress and the President are at least in session and, by their
own definition, working. Now, the country may question the work
is productive, but we're not at home.
Mr. Burton. Yes. I don't have anything else other than that,
other than to say that I really appreciate your hard work. I mean,
when we start working around here, and you know how long it
takes to put together the kind of thinking and the kind of legisla-
tion you're talking about, you usually don't get many accolades or
applause. So I, for one, who have been in the trenches with a lot
of you guys, really appreciate it, even though we may not all agree
on the same bill.
Mr. Barton. Thank you. Congressman.
Mr. Mica. I thank the panelists. We appreciate your insight and
your recommendations. We have a wide variety of other proposals,
some of which are similar. Mr. Wynn has a proposal; Mr. Bonilla,
Mr. Wolf, Mr. Ensign. We will attempt to consider all the rec-
ommendations.
Mr. Barton. Mr. Chairman, could I ask a question?
Mr. Mica. Yes. Did you have anything additional?
Mr. Barton. I don't have anything additional to add in an in-
formative way, I just have a question, what is the intent of the
Chair and the committee to proceed? Is it your intent to try to
move some bill this week, next week?
Mr. Mica. Well, I just spoke to the ranking member, and, as you
see, there is a wide diversity of opinion. If the panel can reach
some type of agreement or consensus on something that should be
moved forward, the leadership has indicated a willingness — if we
can reach some consensus — to consider a proposal, possibly even on
an emergency basis.
But, as you see, there is a wide diversity of opinion, and some
members of the panel who have favored certain positions now may
be reluctant to support some compromise. So we're going to work
in the next few hours and see what can be developed. We appre-
ciate the contributions you have made. We have learned from your
various proposals. You know, 218 votes beats the best argumeijt.
Mr. Barton. Well, as of 2 weeks ago — I haven't rechecked with
the Republican leadership — but at the time of the last shutdown,
the Speaker and the majority leader were supportive of the concept
that I have put into legislative form. I'm not saying that they, ver-
batim, continue to support it, and they may have changed their po-
sition, but at least initially, several weeks ago, they were support-
ive of the concept that I have presented.
Mr. Mica. Again, we do have some indication from leadership as
willing to consider something, possibly on an emergency basis.
I appreciate the ranking member's willingness to work with us,
and other Members, in a bipartisan fashion. Again, we appreciate
everyone's testimony today and their suggestions. The record will
be kept open, without objection, and we will add additional testi-
mony to the official record.
613
There being no further formal business before the subcommittee,
this meeting is adjourned. Thank, you.
[Whereupon, at 3:55 p.m., the subcommittee adjourned.]
[Additional information submitted for the hearing record follows:]
614
ORYX
Oryx Energy Company
13155 Noel Road
Dallas TX 75240-5067
PO Box 2880
Dallas TX 75221-2880
214 715 3865
FAX 214 715 3870
512 478 5117
December 20, 1995
Adrian G. Acevedo
Director
Governmenl and
Public Relations
The Honorable Ken Calvert
Chainnan, Energy and Mineral Resources
Resources Committee
U. S. House of Representatives
Washington, D. C. 20515
Dear Mr. Chairman:
In light of the flirloughing of personnel in the Department of Interior Minerals
Management Service's (MMS) Gulf of Mexico Regional OflBce, I would respectfully bring
to your attention the impact that is likely to occur if the partial shutdown of the federal
government is prolonged. Unless the budget impasse is resolved or additional MMS
regional office personnel are deemed "essential" by the Administration, serious economic
and employment consequences will result to Oryx Energy Company and its service
contractors.
As you know, the inability of the MMS regional office to process drilling and well
workover permits in the Gulf of Mexico will force some drilling rigs to shut down. As the
office continues to remain closed, the effect becomes more human as employees are laid
off. Specifically, let me offer the following:
• Within 2 days. Diamond Offshore' s Ocean Endeavor drilling rig, presently working for
Oryx Energy, will be idled. Oryx and Diamond Offshore have been unable to obtain a
permit for well operations on Viosca Knoll 826 #8. The permit application for
deepening the well was submitted on December 8, 1995. The daily rig rate is $75,000
if the rig is operating and $35,000 per day if it is idled. Approximately 60 people
working on the rig will be out of work unless the situation is remedied.
• Next week, Nabors Drilling Company's Drilling Rig #79, presently under contract
with Oryx, will also be idled. Completion permits fi-om the MMS for well operations
on High Island Block 384 have not been issued due to the furlough. The initial permit
application was made on December 4, with a second application submitted on
December 13, 1995. The daily rig rate, if operating, is $50,000 and $25,000 per day if
it is stacked. Another 60 people working here would be out of work if Rig #79 is
idled.
615
As stated in previous correspondence to both the President and Congressional leadership,
over the years Oryx Energy has developed an excellent working relationship with the
MMS stafiFat the regional level. There has not always been complete agreement, but they
have been fair in their management/regulatory role. As an independent producer of oil and
natural gas for this nation, as an employer and contractor for outside services and
personnel, and as a source of federal revenues through royalties on OCS production, we
can be viewed as partners with MMS in the development of our energy resources.
Your attention to this matter is greatly appreciated. Any assistance you can oflfer or
provide in seeing that MMS regional personnel are reclassified as "essential" or that the
fiirlough is ended would be most welcomed. Please let me know if you need any
addiltonal information or any questions need to be addressed.
Veryl
TOurs,
616
9,HEI1CULES
^ij^r OFFSHORE CORPORATION
Strength through experience, equiprhent, know-how
11011 Richmond Ave.. Suite 500 Office: (713) 260-6300
Houston, Texas 77042 Fax: (713) 789-4063
FAX COVER SHEET
ATTN: Hon. Ken Calvert DATE: January 4, 1996
Chairman
COMPANY: House Resources Committee REF: MMS "Shutdown"
Energy and Minerals Subcommittee
FROM: Thomas J. Seward II FAX #: 202/225-5255
President
Number of pages sent ^. If you have difficulty in receiving, please call.
Dear Chairman Calvert:
Hercules Offshore Corporation is a drilling contractor operating jackup and platform rigs
in the U.S. Gulf of Mexico. As you will note from the attached fax of this date to
Congressman Delay, Hercules and its laid off employees are being meaningfully harmed
by the MMS shut down. The longer the closure continues the greater the negative impact
will be to these innocent victims of political gamesmanship.
We are asking for measures to be implemented to immediately allow the issuance of
drilling permits by MMS; please do what you can to restore fairness and equity to
bystanders so adversely affected by the shutdown travesty.
Very truly yours,
S/n^//-^'
TJS/bsr
cc: Congressman Tom DeLay
bcc: Sharla Bickley, Majority Professional Staff
617
ilHEIlGULES
^^^ OFFSHORE CORPORATION
SIrengtri through »xpah»nce, »^ipmeni know-how
11011 Richmond Ave.. Suite 500 Otfic«: (713) 260-6300
Houston. Texas 77042 Pat (71 3) 789-4063
FAX COVER SHEET
ATTN:
Congressman Tom Delay
COMPANY: U.S. Congress -
House of Representatives
DATE:
REF:
January 4, 1996
MMS "Shutdown"
FROM: Thomas J. Seward li FAX#: 202/225-5241
President
Number of pages sent rnvAr .thfiet only . If you have difficxilty in receiving, please call.
Dear Congressman DeLay:
Perhaps you remember that your father and I long worked together when I was on the
Storm Drilling board and its investment banker. How frustrated, to put it mildly, Charlie
would be with today's shut down of the MMS because of irresponsible and ill-advised
politics.
Since MMS drilling permits cannot be issued, offshore rigs are stacking, crews are being
laid off and contractor losses are being incurred. Already two of Hercules' five jackups
are out of service because of the inability of operators to obtain MMS drilling permits.
The longer the MMS is "shut down" the greater the problem will become. We are told that
even when it reopens, the backlog of permits to be processed and issued will continue
the stacking of rigs and lay off of crews well beyond the date of reopening.
I can't raise hell the way Charlie could, but perhaps you can do something to get
Government going.
Very truly yours,
-^AA
TJS/bsr
618
^^^ OFFSHORE CORPORATION
Strength through experianca, aquipmant, knotv-tiow
11011 Richmond Ave.. Suite 500 Office: (713) 260O00
Houston, Texas 77042 Fax: (713) 789-4063
FAX COVER SHEET
ATTN: Brian T. Petty DATE: January 4, 1996
Senior Vice President
Government Affairs
COMPANY: lADC REF: MMS "Shutdown"
FROM: Thomas J. Seward II FAX #: 202/872-0047
President
Number of pages sent _2L.- If you have difficulty in receiving, please call.
Dear Brian:
The closure of MMS is having a devastating effect on Hercules and presumably on many
other offshore contractors as well. The situation will only escalate in a compounding
manner as MMS remains shut down.
Here is the effect on Hercules thus far. Our Rig 1 1 concluded its contract as scheduled
on December 31 with follow-up worl< to commence with another operator on January 1.
Since the latter operator was unable to obtain a permit because of the closure of MMS,
Rig 11 remains idle with the dual negative effect of laying off crew members and
converting from a daily profit on the rig to a daily loss. The rig, on a letter of intent basis,
has follow-up work with another operator scheduled to commence in late January-early
February upon the completion of the work that was to begin January 1 . We were advised
today that notwithstanding the letter of intent it will be necessary for the operator to look
for another rig if we are unable to provide Rig 1 1 by early February.
All of this means that carefully orchestrated marketing and operations efforts by Hercules
management are in turmoil because of the irresponsible shutdown of a government
agency because of a political squabble.
Another jackup, which has worked for the same major operator for over two years,
becomes idle today because of the inability of the operator to obtain a federal permit for
the drilling that was to commence today. In this instance we have unofficially learned
(and have not confirmed) that the operator was willing to pay the $20,000 daily fine that
619
results from drilling without a permit. However, MMS later advised the operator that in
addition to the $20,000 daily fine management personnel could be subject to
imprisonment. This creates the interesting anomaly of the government on the one hand
refusing to issue a permit because it is "shut down" while on the other hand maintaining
the availability of Federal marshals to apprehend operators without permits.
Please give me a ring at your convenience to discuss what is lADC's position on the
matter. We have learned from industry sources that once MMS reopens the backlog of
permit requests now accumulating will result in perhaps significant delays in rigs going
back to work, which in turn will cause longer lay offs of crews and greater losses for
contractors.
Regards,
TJS/bsr
620
Jeffrey A. Fritzlen
Director of Washington Affairs
Resources
Januarys, 1995
The Honorable Ken Calvert
House Resources Committee
Energy and Mineral Resources Subcommiitee
1626 Longworth House Office Building
Washington, D.C. 20515
Subject: Government Shutdown of Offshore Operations
Dear Mr. Chairman:
On behalf of Union Pacific Resources, I am requesting that the enclosed internal correspondence
between Richard Stites of UPR and myself be included in the record regarding impacts of
government shutdowns due to budget negotiations and regulatory personnel availability to
perform ministerial regulatory functions.
Thank you for your consideration.
Sincerely,
>V^-^<^%-
JAFNdps
Enclosures
cc: Bob Stewart, NOIA
Richard Stites, UPR
Union Pacific Company, a subsidiary of Union Pacific Corporation
Suite 450 West, Columbia Square, 555 Thirteentfi Street, N.W. , Washington, DC. 20004 (202) 662-0180
621
INTER-OFFICE CORRESPONDENCE
TO: J9ffreyA.Frltzlen OFFICE: UPC-
Waihingto
nD.C.
FROM: Richard Stitac DATE: 1/3/96
SUBJECT Govemmsnt Furlough
Pursuant to our taiaphcne conversation we provide some examples of how the
governmental furlough impacts UPR.
1. The obtaining of required governmental approvals to operate has been deemed a non-
essential service. We are unable to secure Plans of Exploration (POE's), Applications for
Permit to Drill (APD's), Development Operations Coordination Documents (DOCD's)
among other such required approvals. The result of our inability to obtain such documents
and approvals delays the Implementation of the planned operations and directly causes
increases in the cost of the contemplated operation.
As an example, UPR has contracted for a specific drilling rig to commence operations on
a well in Ship Shoal in mid December 1 995. If the MMS does not issue a drilling pennit,
UPR will have to elect to pay standby rig time to hold the rig, or release the rig and delay
the commencement of the drilling program, potentially for months. The Ship Shoal prospect
Is a farmin from another party. Our contractual obligations under the third party fannin
agreement through which UPR obtained the right to drill this property has a specific
perfbmiance date, if UPR is stopped from obtaining MMS approvals to drill, UPR cannot
meet the contractuai drill date and UPR could lose the right to explore the subject property.
2. UPR Is the operator of another property in the Brazos area. The property recently
started to produce water. The MMS regulations allow UPR 90 days to re-establish
hydrocarbon production, or In the alternative to commence new exploratory or
development operations to establish production on the block. AS we have discussed
before, 90 days is a very tight window to coordinate such operations. We are now faced
with the problem that the sundry notices required to amend the exiting DOCD to provide
for new dperatlons on the lease cannot be approved by the MMS during the furlough. We
are further advised that not withstanding the MMS's inability to approve the necessary
sundry notice, the 90 day dock is still running. We could lose this lease as a direct result
of the furlough.
3. UPR's business plan is based upon UPR's ability to operate efTicientiy In the last
months of the lease terni. UPR identifies leases with opportunity that are currently held
by other operators. We approach those operators vtnth an offer to do exploratory and/or
JftN 3 '95 18:M PAGE. 032
622
dvvtlopmantal work in «xchang« for an equity interest In the property. The sovemmental
furlough handicaps UPR by eliminating the window of opportunity. The furlough also
causes marginal projects to be<»me uneconomic by artirioally creating a tremendous
backlog for the goods and sen/ices needed to perform work timely. The backlog causes
demand based Inflatksn in the prices of the good and services needed and it severely
alters the timeliness of their delivery. All offshore programs require a great deal of
coordination between the support services, supply boats and personnel etc. The furlough
causes serve disruption in tlie demand for these goods services. The supply companies
lose money and may go out of business which causes Inflation in the cost of the remaining
goods and services.
The MMS recognizas that ongoing operations require immediate attention and accordingly
have allowed for the necessary approval processes to be available to service such
operations. If the operation was commenced prior to the fuhough, it can continue without
interruption, but new operations cannot be commenced. This allows the MMS to protect
their income stream from existing production, but nothing else.
We strongly prefer that the MMS in its entirety be treated as a necassary operation. We
also feel that since the government is the Lessor under the leases in the Gulf, that they
should not be allowed to profit or derive any benefit with respect to the leases as a result
of an operator being precluded from performing work in a timely manner. At a minimum
the MMS should extend the term of the leases for a period of time to allow operators to
property, efFicientiy and cost effectively perform the operations they were precluded from
performing during the furlough.
JflN 3 '95 18:14
623
ATWOOO OCEANICB, INC.
1 5H/1S Psrt Trp PUr.e Dnue 177084)
PO 801218350177218)
Hougton. Texas
Telephone (713) 492-2929
FiLiiinilK, 1713)492-0345
Telej 203204
John R. Irwin
The Honorable Ken Calvert, Chairman
Energy and Mineral Resources Subconunittee
House Resources Conunlttee
1626 LHOB
Washington, DC 20515
Dear Mr. Chairman:
January 5, 1996
The purpose of my letter is to convey concern that an extended
shutdown of the Minerals Management Service (MMS) could have a
serious financial impact directly on our Company and the domestic
oil service industry. In that regard, I want to strongly endorse
previous requests concerning the urgent need to reclassify
additional personnel in the MMS Gulf of Mexico office as
"essential". It is my understanding that the current level of
employees, despite their best efforts, are unable to perform
necessary services including the processing of plans and drilling
permits. Our Company has a mobile offshore drilling unit located
and employed in the Gulf of Mexico. If our client(s) cannot obtain
drilling permits on an ongoing basis due to a shutdown or
unreasonable delays, there will be serious financial consequences
for us, our client(s) and our industry.
Forward planning by our client(s) has generally resulted, to-
date, in little or no shutdown of offshore drilling operations in
the Gulf of Mexico. However, if a shutdown and delays continue,
the operation of drilling units will begin to be seriously affected
and rigs will be shut down and become idle. Each idle unit will
suffer substantial revenue losses until the MMS reopens for
business and clients receive approval for their well applications.
An extended shutdown with a larger number of idle rigs could also
potentially result in significant personnel layoffs.
Our Company provides only one of the services necessary for
exploring and developing our nation's offshore energy resources.
There are numerous other oil-field service companies critical to
the process, and they will also lose revenue and, ultimately, may
624
The Honorable Ken Calvert, Chairman
Energy and Mineral Resources Subcommittee
House Resources Committee
January 5, 1996
Page 2
have to lay off personnel until the government can reopen and
operate as usual. The magnitude of this problem could easily mean
losses of many millions of dollars to the offshore service
industry.
We urge your consideration of this matter as you also consider
the larger issue of a resolution on a balanced budget. Further, as
Chairman of the House Energy and Mineral Resources Subcommittee,
you may inquire whether MMS is doing all that it can under the law
to avert a shutdown and loss of Jobs in the Gulf of Mexico.
rwin
t and CEO
JRI/bjr
The Honorable Gene Green, Congressman
House of Representatives
1024 Longworth House Office Building
Washington, DC 20515-4329
The Honorable Ken Bentsen, Congressman
House of Representatives
128 Cannon House Office Building
Washington, DC 20515-4325
625
FAST FACTS: January 8, 1996 CONTACT: Barney Congdon
(504) 736-2595
MMS Recovers from Furlough
Dtiring the Federal Government furlough of December 18 - January 5, the Minerals Managemcm Service,
a bureau of the Department of the Interior, was not able to grant any approvals to drill new oil and gas wells
or for signiflcant changes in wells, facilities, and pipelines. As a result, some 400 approval or modification
actions for wells in the Gulf of Mexico were backJogged when the MMS Gulf of Mexico OCS Region staff
returned to work on January 8.
The MMS moved expeditiously to issue approvals for critical iienu as soon as the President signed the
continuing budget resolution late on January 5. On Saturday and Sunday, January 6-7, MMS staff came imo
the office to issue critical approvals on 26 wells. Of the 26 approvals, 9 were issuances of Applications for
Permits to Drill for Chevron U.S.A. Inc. (2), Petsec Energy Inc., Shell Offshore Inc., Flextrend
Development Company, Murphy Exploration and Produaion Co. , Oryx, Exxon, and Conoco Inc. Seventeen
other approvals for completion, workover, or sidetracks of wells or plugging and abandonment were issued
to Vastar Resources Inc., Meridian Oil Company (2), Coastal Oil and Gas Corp.. Oryx Energy Company
(9), King Ranch Oil and Gas, Apaclie Corporation, Petsec Energy Inc., and Exxon Company U.S.A. (2).
In eight or nine cases, the drilling rigs were idle because of the inability to obtain MMS approval. Costs
for an idle rig are a minimum of $20 - 30,000 per day. Three cases where rigs were idle for at least seven
days are Shell Offshore (High Island Block 136 — drilling); Oryx (High Island Block 319 — completion);
and Petsec (West Cameron Block 544 — workover).
Of the 400 action items pending, 156 of these were requests for permission to start new wells. At the same
time, when MMS remmed to work on Monday, January 8, over 30 new applications for well permits were
filed.
Because of the inability of MMS to issue ^provals for other than emergency flaring (48 hours), several oil
and gas companies had to shut in production wliile waiting on repairs. At one point MMS estimated that
10,000 barrels of oil a day in production were shut in.
bi addition, upon its return, the MMS Gulf Office was deluged with a mountain of null — niucli of it from
Industry constiments wanting approvals of action. Some 32 buckets/boxes of mail were opened the first day
in addition to about 4(X) express mail packages.
The Gulf OCS Region of MMS is a key regulatory Agency in the Nation's energy supply It regulates and
of all OCS production comes from the Gulf of Mexico area. o" aa *
-MMS-
O
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